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.