How Obamacare repeal sets the table for the entire GOP agenda

President-elect Donald Trump and his Republican allies in Congress are ready to press ahead with Obamacare repeal come January.  The effects of repeal will be devastating enough.  But repeal also triggers problems that help the GOP justify the rest of its agenda.  By repealing Obamacare, Paul Ryan and company will try to bootstrap in drastic changes across government in the name of reducing deficits and stabilizing federal programs like Medicare.

Republican plans to repeal Obamacare would exact a massive human toll.  Repeal could throw upwards of 30 million people off of their health insurance, doubling the current uninsured rate.  And if Republicans gut the law’s protections for those with pre-existing conditions, 52 million people would struggle to find affordable insurance.

The human carnage of repeal is meant to coerce Democrats into going along with a right-wing replacement bill.  Republicans will have 52 votes in the Senate in 2017.  They can repeal most of Obamacare with 51 votes for a reconciliation bill.  But to enact new legislation replacing the law, they’ll need eight Democratic votes to overcome a filibuster.  The thinking is that creating an Obamacare cliff with massive human disaster on the other side will compel cooperation from Democrats.

Never mind whether this scheme can actually work without provoking a stampede of insurers out of Obamacare’s marketplaces during the transition period leading up to the cliff.  Like the hostage-taking expeditions during the Obama administration—the debt ceiling fiasco, the fiscal cliff, the government shutdown—this is another instance of the GOP manufacturing a crisis in order to strong-arm its policy priorities through Congress.

Conveniently for Republicans, Obamacare repeal opens the door to far more of the conservative agenda than just upending the individual insurance market.  According to a new report from the Brookings Institute, repeal would also jeopardize the solvency of Medicare.  Obamacare included a 0.9 percent payroll tax on incomes above $200,000 to help shore up Medicare’s finances.  This extended the solvency of the program’s trust fund until at least 2028.  Without this tax, Medicare could go broke in less than eight years.

It’s impossible to imagine conservatives restoring any of Obamacare’s taxes on the wealthy.  (Indeed, cutting these taxes is part of the appeal of Obamacare repeal for Republicans.)  And by repealing the law, Republicans also drag Medicare closer to crisis.  It’s easy to picture Ryan and others seizing the opportunity to warn that Medicare cannot be sustained without drastic changes along conservative lines–the type of reform Ryan has spent years pursuing.  The conservative vision would terminate our commitment to Medicare as a government-run insurance plan, and replace it with a voucher payment to seniors to shop on their own for private insurance plans.

So by repealing Obamacare, Republicans worsen Medicare’s financial position and thereby tee up the case for privatization.  But that’s not all.  The passage of Obamacare has corresponded with a marked slowdown in the growth of healthcare costs over the last several years.  The U.S. is currently on pace to spend $2.6 trillion less on healthcare than we expected before Obamacare was passed.  It’s difficult to assess how much Obamacare contributed to these savings, but it undoubtedly played a part.

If this slowdown is reversed by repeal, and healthcare costs begin to balloon again, the GOP could well use it as an excuse to pass the rest of its radical policy prescription across the entire gamut of American insurance options.  These reforms range from block-granting Medicaid to capping the tax exclusion for employer-provided insurance to promoting higher deductibles for more people.

Repeal could even give Republicans space to shoehorn in their desired policies outside of healthcare.  The Brookings report also found that Obamacare repeal will worsen long-term deficits.  Republicans will also undoubtedly pursue massive tax cuts near simultaneously with Obamacare repeal.  This combination will cause deficits to explode.  And as the Congressional Budget Office begins projecting larger and larger deficits, Republicans will have a ready-made excuse to justify austerity politics and massive cuts to safety net programs and other domestic spending.

We’ve seen this story before: the GOP leverages a crisis of its own making to push through its chosen policy prescriptions.  Even with a congressional majority, Republicans won’t be able to quit governing through crisis mode.  Their policy agenda will be painful for millions of Americans, and deeply unpopular because of it.  Republicans need a pretext to bolster the political necessity for making sweeping changes to our safety net.  Repealing Obamacare unlocks a whole host of rationales to help the GOP do precisely that.

But this also allows Democrats and other Obamacare defenders to lay out the full stakes of repeal.  Obamacare repeal doesn’t just rob insurance from the millions who have gained coverage under the law.  Repeal also jeopardizes the financial sustainability of Medicare for future retirees.  Repeal threatens to ignite higher healthcare inflation, raising premiums and eroding employees’ take-home pay.  Repeal erodes the financial standing of a whole host of programs for low-income Americans that are vulnerable to arbitrary budget cuts.  The implications of repeal are simply massive.

By repealing Obamacare, the GOP is trying to tee up its entire legislative agenda.  Liberals have an obligation to shout from the mountaintops about the full harm of this conservative exercise in bootstrapping.

The team quietly building a child allowance

I have a new post up at Medium based on a conversation with professor Hiro Yoshikawa, and work he and others are doing to build out the theoretical and empirical case for a child allowance in the United States:

It’s a distant thought now, but someday liberals will again get the chance to advance a progressive agenda on the national stage. And in the grim shadow of November’s electoral defeat, the future of progressive thought is already being hatched. Academics and researchers are quietly building the case for a bold new policy to support American families in cities across the United States: a universal child allowance.

Read the rest here.

The incredibly weak case for repealing Obamacare

Unified conservative government in Washington has given Republicans an unobstructed path to repeal Obamacare. As Vice President-elect Mike Pence recently assured a group of Heritage Foundation donors at the Trump International Hotel, “We’re going to repeal Obamacare lock, stock and barrel,” calling repeal the incoming administration’s “number one priority.”

But as clear as the repeal path may be, it’s worth pausing to reflect on the actual merits supporting the unrelenting conservative attack on the law. As it turns out, the case against Obamacare is incredibly weak.

First and foremost, more than 20 million people have gained coverage under the law, driving the uninsured rate to historic lows. These gains would be reversed by repeal. Repeal could cost as many as 30 million people their health insurance, causing the uninsured rate to double. And without Obamacare’s protections, 52 million people with a preexisting condition may struggle to find affordable insurance.

Moreover, many of the controversies that conservatives ginned up while the law was being drafted never came to pass. The public option for health insurance was scrapped before the law was enacted. The Cadillac Tax on high-end health insurance plans has been perpetually delayed. The supposedly job-killing employer mandate took effect this year, yet private sector employment continued to rise, as it has every month since Obamacare became law. The cancellation of low-quality insurance plans, which affected a small fraction of the country in 2013, was a one-time product of the transition to Obamacare. “Death panels” were never a real thing. The real, much more innocuous idea—reimbursing doctors for counseling patients about end-of-life care options—was stripped from Obamacare, and then quietly adopted by regulation last year.

Still, conservatives are nonetheless forging full steam ahead with kneejerk Obamacare repeal. “This law, you have to remember, is hurting families in America,” Speaker Paul Ryan recently said with little regard for the millions of families insured under the law. “So we have to bring Obamacare relief as fast as we possibly can in 2017.”  He and other Republicans now cling to two chief objections to Obamacare: its effect on out-of-pocket payments, and its mandate to carry health insurance. Neither would be improved by repeal.

Republican complaints about premiums under Obamacare are a shameless exercise in bootstrapping. It’s true, premiums on most of Obamacare’s exchanges rose significantly this year. But Republicans themselves triggered part of these premium hikes by repealing Obamacare’s risk protections for insurers last year. Conservatives intentionally wounded the law, and then complained when insurers backed out and premiums rose because of it.

Moreover, premium hikes were surprisingly low over the previous two years, so some of this year’s increase came from insurers returning to expected premium levels. It’s also a product of insufficient competition. More insurers competing for business would produce better bargains for consumers.

There are sensible ways to fix these problems that are far less disruptive to our healthcare system than wholesale repeal. Young, healthy people have sat out of the marketplaces in greater numbers than expected. If more of these customers purchased insurance, more insurers would participate and consumer costs would be lower. To attract more healthy customers, the marketplaces need to offer more appealing coverage options. This could be accomplished by allowing the federal health exchange to actively negotiate better rates with insurers, like California’s exchange already does. The government could also offer more generous cost-sharing subsidies to help with out-of-pocket expenses. And we could allow those nearing retirement age—say, individuals 55 and above—to sign up for Medicare. This would pull some of the oldest and costliest patients out of the individual marketplaces, lowering premiums for everyone else, and making those marketplaces less risky for insurers.

Repeal, on the other hand, would only make matters worse. To the extent Republicans succeed in lowering premiums under an Obamacare replacement, they would likely do so only by weakening the quality of insurance. Young and healthy people may see lower-cost options, but older and sicker people could see substantial premium increases. And costs on the individual market could skyrocket if Republicans try to retain Obamacare’s ban on preexisting condition exclusions without implementing an adequate substitute for the individual mandate.

Which gets to the long-time conservative bogeyman of Obamacare: the individual mandate. The mandate is the lynchpin the holds the law together—you can’t guarantee private coverage to the sick at fair rates without also guaranteeing insurers a broad pool of healthy customers. The mandate offers everyone a choice: you can do your part to secure a more equitable healthcare system by either purchasing insurance or paying a tax.

Even though they invented the individual mandate, conservatives have spent years railing against it as an unconscionable intrusion on individual liberty. But if the mandate impairs freedom at all, it’s the freedom to suffer from health insecurity and vulnerability to illness, tax-free. That’s hardly a freedom worth preserving.

Instead of an individual mandate, most conservative repeal plans adopt a “continuous coverage” requirement. Like the mandate, this would require Americans to continuously carry insurance coverage. But rather than paying a tax to the government, those who go through a spell without insurance would get price-gouged by insurance companies. These individuals would be hit with higher premiums when they reenter the insurance market, and potentially really high premiums if they have a preexisting condition.

It’s hard to say whether this complex penalty will even work, given that the so-called “young invincibles” the individual market desperately needs are prone to lowballing the likelihood of future illness. But the conservative individual mandate replacement is, if anything, a more draconian penalty than Obamacare’s mandate. The conservative plan adds insult to injury for those who fall on hard times: If you lose your insurance, you get penalized with higher future premiums and inadvertently waive your right against discrimination on the basis of illness. What’s worse, the conservative plan makes it harder for those down on their luck to afford coverage in the first place. Because conservatives would abandon income-based subsidies, many people will be caught in an impossible situation: buy insurance you cannot afford now, or get hit with even higher premiums in the future.

Currently, Republicans are trying to devise a “repeal and delay” scheme to avoid upending the individual markets while they work out a replacement bill. But the difficulty of these efforts only underscores the fact that Obamacare is fundamentally a moderate reform. Ironically, repeal would be much easier for Republicans had Obamacare expanded insurance through a single-payer, Medicare-for-All scheme. In that alternative universe, Republicans could simply schedule Medicare-for-All to sunset on, say, December 31, 2018, and the to-be-determined right-wing reform would seamlessly kick in the next day, with minimal turmoil in the interim.

Instead, Obamacare opted for a more cautious approach dependent on the voluntary participation of private insurers. This has made it harder to expand coverage and guarantee insurance offerings across the country. But at the same time, the prospect of a painful zombie transition period on the exchanges also makes the law harder to repeal. Insurers could exit the marketplace in droves after a repeal vote, as if fleeing a sinking ship. This would cause real pain in the lives of the millions of Americans left uninsured, and political pain to the repeal-obsessed GOP.

Conservatives believed their own spin that Obamacare was a big government monstrosity. Now in a role of actual power and responsibility, they are grappling with the inconvenient truth that the law really is a carefully crafted, moderate reform bettering the lives of millions of Americans—all of which makes the unthinking march toward repeal deeply irresponsible.

The path to repeal is wide open for Republicans. And raw power politics means they can pretty much do as they please. But in a democracy, the party in power still owes the country a justification for its policy agenda. And when you really get down into it, the case for Obamacare repeal is spectacularly weak.

Note: This post is cross-posted at Medium.