Trump is trying to repeal Obamacare in court

Last week, the Department of Justice filed a legal brief announcing that it will not defend the Affordable Care Act in court.  That legal maneuver amounts to a transparent attempt by the Trump administration to try to repeal Obamacare yet again.

Conservatives have spent nearly a decade sniping at Obamacare through targeted litigation.  The ink was barely dry on Barack Obama’s signature on the law before fourteen Republican attorneys general sued to invalidate it.  Eventually, a lawsuit brought by a Koch brothers-funded business lobby made its way to the Supreme Court, claiming that the law’s requirement that everyone purchase insurance was unconstitutional.

In that case, Chief Justice John Roberts cast the deciding vote to save Obamacare’s individual mandate.  He thought the mandate went beyond the limits of Congress’s authority to regulate interstate commerce, but was valid as a tax.

Fast forward to 2017.  Congressional Republicans spent the better part of a year trying and failing to repeal Obamacare.  When they gave up and passed a standalone tax cut on the rich instead, Republicans slipped in a repeal of the individual mandate in order to nick Obamacare.

But they didn’t technically strike the individual mandate from the books.  Instead, Republicans simply zeroed out the mandate’s tax penalty.  So as of January 1, 2019, the individual mandate is “enforced” with a $0 penalty for skipping out on health insurance.

A new Obamacare lawsuit brought by Texas and other red states takes yet another swing at the law. And now the Trump administration’s Department of Justice has weighed in to argue that the individual mandate has become unconstitutional.  The argument is that because the individual mandate no longer generates any revenue in the wake of the tax bill, it can no longer be considered a tax.  And if it’s not a tax, then it has no constitutional authority.

But the administration doesn’t stop there.  Even worse, it argues that if the individual mandate falls, then Obamacare’s rules prohibiting discrimination against people with preexisting conditions must fall, too.  These protections that guarantee insurance access and fair prices should be struck down with the ghost of the individual mandate, according to the administration.

As a legal matter, this argument is utterly frivolous.  It’s a perversion of a legal doctrine known as “severability.”  When a court strikes down one provision of a law, it generally tries to leave alone other “severable” parts of a law in order to preserve as much of Congress’s work as possible.

Turning that doctrine on its head, the administration argues that Obamacare’s protections for people with preexisting conditions are not severable from the individual mandate, pointing to congressional findings in the Affordable Care Act that the provisions were closely connected.  But the health care program known as “Obamacare” is no longer derived just from the Affordable Care Act.  Rather, it comes from the Affordable Care Act as amended by the Donor Relief Act of 2017.  Congress itself—however unwisely—opted to defang the individual mandate and leave the rest of Obamacare alone.  The courts have no severability judgment to make, because Congress already made it.

And there’s a reason Congress didn’t touch the rest of Obamacare: it didn’t have the votes.  Senate Republicans pursued Obamacare repeal solely through budget reconciliation because they didn’t have enough votes to defeat a Democratic filibuster.  Reconciliation is limited solely to legislation that has an impact on the budget.  That constraint precluded Republicans from even considering repealing Obamacare’s provisions guaranteeing people with illnesses the right to purchase insurance.

So the administration is trying to do through the courts would it could not get through Congress.  It’s a backdoor attempt to saw off more of Obamacare than Congress could ever bear.

Of course, the Department of Justice’s refusal to defend Obamacare is also a stunning betrayal of the rule of law.  “[T]he Justice Department has a durable, longstanding, bipartisan commitment to defending the law when non-frivolous arguments can be made in its defense,” law professor Nicholas Bagley writes.  “This brief puts that commitment to the torch.”

Bagley also notes that just hours before the Department of Justice submitted its brief, three career attorneys at the Department withdrew from the case.  That’s typically a sign of dissension among the legal professionals within the Department not wanting their names attached to a frivolous brief. That left only Trump political appointees signing the brief—including Acting Assistant Attorney General Chad Readler, who Trump just picked to serve as a federal appellate judge.

Trump and his congressional Republican abettors have been hell-bent on soiling Barack Obama’s program expanding health care to twenty million people.  Through acts of sabotage both big and small, they’ve tried their damnedest to make the law function more poorly, even going so far as to deliberately cultivate massive premium hikes on people’s health insurance plans this year.

The galling brief filed by the administration’s hand-picked lawyers is a reminder that the conservative bloodlust to take away people’s health care has in no way dissipated after last year’s legislative failure of Obamacare repeal.  American health care simply will not be safe until Republicans are stripped from power in Washington.

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Progressive health reform in 2020

Progressives are readying the next era of health reform. Bernie Sanders has introduced a Medicare-for-all bill, with substantial support among prominent Senate Democrats. Other Democratic proposals include letting people buy into Medicare, or letting them buy into Medicaid, or creating a “Medicare X” plan that would let people buy into a new form of Medicare on Obamacare’s marketplaces. The left-of-center terrain is rife with ideas about what comes next in healthcare.

A new symposium hosted by the American Prospect and the Century Foundation adds to this terrain. All six contributions from healthcare experts are worth reading (1, 2, 3, 4, 5, and 6). I’d like to focus on two of these ideas, and what they mean for how health reform thinking is evolving on the left-of-center.

The first comes from Jacob Hacker, a political scientist at Yale. He is also the godfather of the public option—the Affordable Care Act-era proposal to create a government-run insurance plan to compete with private insurers.

In 2007, Hacker proposed a healthcare plan that paired a mandate on employers to provide insurance with a Medicare-like public plan to cover the uninsured. At the time, Hacker’s plan was out of step with mainstream Democratic priorities on healthcare. As I’ve written, Democrats felt burned about being tagged as overreaching statists during Bill Clinton’s 1993 health reform effort. When Barack Obama made another attempt at health reform, Democrats opted for a centrist approach built around government facilitation of competitive private insurance markets.

Within this framework, Hacker’s proposal was whittled down to a public option that would offer plans within Obamacare’s insurance marketplaces. This was the chief liberal imprint on the Affordable Care Act debate. But the public option ultimately proved too much for the Senate Democrats that held the decisive votes on health reform. Hacker’s public option was unceremoniously excised from the bill.

Obamacare went into effect with no alternative to private insurance for most people. The law has made tremendous gains in getting people covered. But most of these gains have come from the law’s expansion of public insurance under Medicaid. Obamacare’s private insurance marketplaces have been wobbly and in flux, constantly under attack by Republican opponents, and prone to price increases and exits by insurers.

Now Hacker is back with a new contribution to the liberal healthcare brainstorm session. He proposes a plan he has called “Medicare Part E”—Medicare for everyone who wants it. “All Americans should be guaranteed good coverage under Medicare if they don’t receive it from their employer or Medicaid,” Hacker writes.

The key features of Hacker’s plan include:

  • Automatic guaranteed coverage for all Americans under a new Medicare Part E.
  • You can opt out of this default Medicare coverage by enrolling in an employer-sponsored plan or other private insurance plan with benefits at least as good as those offered by Medicare.
  • A “pay or play” requirement on employers, who would be responsible for either providing good health insurance to their workers or contributing toward the cost of Medicare Part E.

Hacker’s plan has a lot going for it. It takes the best part of single-payer—guaranteed coverage—while leaving room for consumer choice. Medicare Part E wouldn’t jeopardize the employer-provided coverage that people have and like (as long as those plans meet quality standards). And the experience of Obamacare shows that employers are unlikely to ditch their insurance offerings in droves to dump workers on to a new public plan.

Medicare Part E builds on the public preference for voluntary, rather than coercive, government healthcare programs. The idea for a voluntary public option has been consistently popular, while Obamacare’s now-stricken individual mandate was consistently not. Rather than banning private insurance (as some single-payer plans would), Hacker would supplement private insurance with a Medicare fallback available to all Americans as a right of citizenship. Like the idea of making Medicare the default coverage for kids (which I’ve written about), those who prefer private coverage could still get it.

The second proposal comes from John Holahan and Linda Blumberg of the Urban Institute’s Health Policy Center. They argue that instead of creating a public option, we should cap the payment rates that hospitals and providers can charge to insurers.

The strongest version of a public option would help control healthcare costs by paying providers the same low rates that Medicare pays. But this public option would draw fierce industry opposition from both insurance companies and providers.

Blumberg and Holahan suggest that we can capture the same cost savings of a public option by simply applying the same payment caps to private insurers. Under their proposal, private insurers would pay providers at rates capped at what Medicare pays (or the Medicare rate plus a percentage more). This would achieve cost savings while defusing potential opposition among insurers.

This plan would essentially import the regulatory structure used in Medicare Advantage into the rest of the health insurance system. Medicare Advantage is the program that allows private insurers to compete with traditional single-payer Medicare. It currently enrolls about one-third of all Medicare beneficiaries. Under Medicare Advantage, out-of-network providers cannot charge private insurers more than Medicare rates, which also implicitly caps the rates paid by in-network providers, too.

Blumberg and Holahan would expand these rules beyond the Medicare Advantage market and into the broader health insurance market. In effect, the insurance industry would become more like a public utility—the broader market would functionally be a public option. “This approach would control costs in areas where premiums are high,” Blumberg and Holahan write, “and it would reduce barriers for insurers in markets where monopoly conditions currently exist.”

It’s not clear that this proposal would lure health insurers off the sidelines to sell in the nearly barren areas underserved by Obamacare’s marketplaces, like rural regions. And it wouldn’t provide an alternative to the administrative complexity of the private insurance system.

But Blumberg and Holahan are right that absurd costs are at the root of much of what ails our healthcare system. Rate-setting and price controls should be in the discussion for the next phase of health reform. Healthcare simply isn’t a market where we can let prices fluctuate with supply and demand. “Consumers” aren’t able to easily shop around or walk away from healthcare services that are just too essential to turn down. This removes the downward price pressure that exists in other true markets for goods and services. Government can step in and restore that price pressure by limiting the prices that doctors and hospitals can charge.

“Medicare-for-all” is a good campaign slogan for progressives to run on. But it’s also a bull-in-a-china-shop approach that would upend the existing system. There are other ideas on the table that more gingerly navigate the political headwinds that Health Reform Phase 2 will inevitably face. Coupling national price controls while making Medicare available to everyone may just be the way forward.

The CHIP crisis shows that we must Republican-proof government

The Children’s Health Insurance Program has been running on fumes for more than one hundred days. The program provides health insurance for 9 million children in low-income families. But millions of those children stand on the brink of losing coverage because the Republican-controlled Congress hasn’t bothered to renew long-term funding for the program. It’s a needless crisis—and a stark reminder that when progressives are in power, they must fortify government to withstand neglect and ruin at the hands of the right.

Since its inception twenty years ago, CHIP has been an uncontroversial program with bipartisan support. But funding for the program ran out at the end of September. Two leading senators had struck a bipartisan agreement to extend CHIP’s funding earlier that month, but the GOP’s last-ditch push to repeal Obamacare swallowed up their deal. After Obamacare repeal failed again, Senate Republican leadership leaped straight into tax reform, and the CHIP deal faded away.

Meanwhile, state CHIP programs are quickly running out of money to keep kids insured. Congress kicked the crisis a few months down the road before breaking for the holidays, passing short-term funding meant to keep CHIP afloat until March. But that funding actually may not even be enough to sustain CHIP through the end of January in some states, according to the Centers for Medicare & Medicaid Services. Congressional recklessness has already exacted a psychic toll on families frantic at the prospect of their children losing access to health care, with some states sending letters to families warning that they will be forced to terminate coverage without action by Congress, and others readying emergency plans to wind down their CHIP programs entirely.

In the midst of this crisis, Republicans in the House played politics with the issue. At the end of October, they proposed to fund CHIP in part by shortening the grace period for Obamacare enrollees who miss a premium payment. This would pay for CHIP using money saved on Obamacare subsidies after throwing people off of their insurance faster. It was a poison pill bill—Republicans knew Democrats wouldn’t support any move to weaken Obamacare—but the House passed it along party lines anyway.

Since then, Republicans enacted a tax bill that could leave up to 13 million fewer people with health insurance—meaning there now may be fewer bounced premiums to draw on to fund CHIP. That tax bill sucked up all of the oxygen in Washington, along with most of the revenue. Even Sen. Orrin Hatch—one of CHIP’s original sponsors—bemoaned that renewing CHIP is difficult “because we don’t have money anymore.” Yet he and his GOP colleagues had no trouble finding the money—plus stomaching $1 trillion in new federal debt—for the sake of cutting taxes primarily on the wealthy and corporations.

This isn’t a surprise—conservatives have long pledged fealty to Tax Cut Exceptionalism. Many believe there’s no need to pay for tax cuts at all, while social insurance programs should be paid for by robbing one to pay for another. It’s part of a larger strategy to shrink the size of government by starving it of funds—one that inevitably targets programs that serve the poor and vulnerable.

CHIP serves a relatively narrow subset of American children whose parents earn too much to qualify for Medicaid but too little to afford private coverage. It’s usually temporary coverage that children weave in and out of as their parents’ incomes rise and fall—a safety net that families can fall back on in hard times.

CHIP may have been a bipartisan priority once upon a time. But progressives must reckon with the modern GOP, which is no longer a reliable partner in support of any social welfare program. It is now a nihilistic party that rejects any role of government to do things like expand healthcare coverage. This puts a program like CHIP squarely in the crosshairs when Republicans are in power.

So when the political pendulum swings back to the left, progressives must tailor their agenda with an eye toward Republican-proofing government. That means making important public programs too big to cut. For instance, Democrats could transform children’s health insurance into a commitment to provide automatic Medicare coverage for all American children starting at birth. As progressives from Lyndon Johnson’s administration on through Sen. Bernie Sanders have proposed, American children should receive a Medicare card when they are born, covering their healthcare needs up until early adulthood.

By enlisting all American children into one healthcare program, Medicare-for-Kids would become another third rail too politically painful for conservatives to attack. Moreover, because Medicare is funded through payroll taxes, children’s coverage would no longer be subject to the gamesmanship of congressional deal-making.

Conservatives recognize that expanding social insurance programs makes these programs stronger, and therefore resist expansion attempts accordingly. Over a decade ago, a bipartisan coalition in Congress passed a bill that would have expanded CHIP and covered more children. President George W. Bush vetoed the CHIP expansion twice, saying that it “moves our country’s health care system in the wrong direction” by supposedly threatening private insurance. The CHIP expansion became law shortly after President Barack Obama took office in 2009.

The bill that Obama signed had notably less Republican support than the bills passed out of Congress under Bush—an early sign of the hardening anti-healthcare direction of the GOP. That shift is now complete. Congress may still avert total disaster and pass meaningful CHIP funding. But this calamitous episode should remind progressives of the need to ratchet up the welfare state so that it can survive shifts in the political winds. Health insurance for children and similar programs must be bolstered to weather the cold during periods of conservative rule.

Last night was about healthcare

The country sent Donald Trump and the Republican Party a clear brush back pitch on November 7, 2017.  Democrats enjoyed their best election night in a half decade, winning high-profile governor’s races in New Jersey and Virginia, and making massive statehouse gains in states across the country.  It was a rout — a veritable “ass-kicking,” in the words of Connecticut senator Chris Murphy.

And the common thread of the night was Americans sticking up for their healthcare.

In Maine, nearly 60 percent of voters approved a referendum to adopt Obamacare’s Medicaid expansion, extending health insurance to 89,000 low-income residents.  The state’s intransigent troglodytic governor Paul LePage had ardently opposed expansion, repeatedly slandering Maine’s would-be Medicaid recipients as lazy leeching “able-bodied adults who can work and contribute to their own health insurance costs.”  The people of Maine just put LePage in his place, going around him to overwhelmingly approve healthcare for their neighbors.

Medicaid’s rousing victory in Maine is expected to inspire similar ballot initiatives in more non-expansion states in 2018.  These could include Utah, Idaho, Kansas, and other states that have held out against expanding Medicaid.

In Virginia, a tight governor’s race turned into an easy win for Democrat Ralph Northam.  This has roundly been read through the lens of Northam’s Republican opponent, supper lobbyist Ed Gillespie, who remade himself in the image of Trump be running on racial fear-mongering in an attempt to gin up the conservative base.  Voters in Virginia roundly rejected Trumpism on Tuesday.

But the results were also driven by voters’ concerns about their healthcare.  Nearly 40 percent of Virginia voters surveyed in exit polls reported that healthcare was their most important issue, far outpacing any other concern.

Democrats also made historic gains in Virginia’s House of Delegates.  As of Wednesday morning, Democrats had picked up an incredible 14 seats in the hundred-seat statehouse, pulling to a 48-47 lead with five races still being tallied or too close to call.

Winning a statehouse majority would extend Medicaid to 400,000 low-income Virginians.  Current Democratic governor Terry McAuliffe tried for years to expand the program, but the Republican-controlled House of Delegates blocked him at every turn.  A Democratic-led statehouse would allow Virginia to finally expand the program.  But even a House of Delegates with a slim Republican majority will feel incredible pressure to expand Medicaid in light of Tuesday’s sweeping election results.

These were state elections, but they were driven by national politics.  Donald Trump and Republicans in Congress relentlessly attacked the health security of millions of Americans for the vast majority of 2017.  Their party paid for it up and down the ballot on Tuesday.  Voters fought back to protect their care.

Before Tuesday, Republicans in Congress were toying with using their tax reform bill to take another stab at secretly gutting Obamacare by repealing the law’s individual mandate.  If Congress balks, Trump is poised to continue his administrative campaign to sabotage the law by readying an executive order unraveling enforcement of the mandate.  Either would strike a massive blow against ensuring affordable healthcare access under Obamacare.

Republicans go after healthcare at their own risk.  Tuesday’s electoral sweep follows on the heels of a surge of early sign-ups on Obamacare’s health exchanges despite Trump’s best attempts to thwart them.  The anti-Trump resistance flexed its muscle last night.  If Republicans train their fire on healthcare yet again, they will only fuel the greater storm gathering for November 2018.

The parable of Donald Trump and the imaginary hospitalized senator

Congressional Republicans failed again to repeal Obamacare last week.  To rationalize yet another swing-and-a-miss, President Trump took a novel approach: he invented a hospitalized senator.  “We have the votes,” Trump falsely claimed to Fox and Friends, but “we don’t have enough time, because we have one senator who’s a ‘yes’ vote, he’s a great person, but he’s in the hospital.”

This appeared to be an odd spin on the plight of Sen. Thad Cochran, who was forced to publicly clarify that he was not actually hospitalized, but was home recuperating from a “urological issue.”  And of course, even with a healthy Cochran, the GOP still lacked 50 votes for its bill, with Sens. John McCain, Rand Paul, and Susan Collins all opposed.

Still, Trump’s fabrication of the hospitalized clinching vote is a fitting coda to the latest GOP healthcare failure.  After all, the entire battle against Obamacare has been founded on fantasy.

It was a fantasy that Obamacare was a tyrannical government takeover of the healthcare sector.  In reality, it was a modest step to patch up the holes in our ragtag mix of public and private coverage, meant to scoop up most of the people who fell through the cracks and were victimized by the old status quo.  Obamacare was such a centrist program that it left the GOP no room to maneuver rightward while still maintaining its popular coverage guarantee for people with pre-existing conditions.

It was a self-delusion that Obamacare was failing or caught in the throes of a death spiral, as Republican leaders like Speaker Paul Ryan like to claim.  Every indicator of insurer profitability showed that Obamacare’s marketplaces became a stable, safe place to sell insurance last year.  And every government study found that the marketplaces were on firm ground for the foreseeable future.  Even Trump’s own Health and Human Services department admitted that the marketplaces were in good shape–but that didn’t stop him from spreading the myth that Obamacare remains on the brink of collapse.

It was masochistic wishful thinking to believe that Obamacare was sowing ruin in the lives of American families.  For millions, the law was quite literally a lifesaver.  For the first time, people with preexisting conditions were guaranteed a right to affordable healthcare.  People who already had insurance could rest easy knowing that a costly illness or injury wouldn’t bankrupt them, thanks to the ban on caps on insurance coverage.  The repeal drive in particular revealed the immense popularity of Obamacare’s Medicaid expansion, and how much people had come to depend upon the law’s protections.

Certainly, Obamacare is not a perfect law.  But it was absurd to think that the GOP’s proposals would do anything to fix its flaws.  Mitch McConnell, Ryan, and other Republican leaders spent years ripping Obamacare for its high premiums and deductibles–and then turned around and embraced a series of bills that would make those problems much, much worse.

The conservative movement’s “alternative facts” problem well predates Trump.  But Trump undoubtedly made the problem worse, normalizing the acceptability of outright lies about policy proposals.  Trump’s shameless disregard for the truth made it okay for other Republicans to insist that their healthcare bills would cover everyone and lower premiums–when time after time, the exact opposite was true.  In the latest Republican run at Obamacare, it’s what made it okay for Bill Cassidy to lie that his bill guaranteed coverage for people with pre-existing conditions, even though it was clear that it left room for states to kick those very people off of their coverage.

It was this unbridgeable chasm between fact and fiction that ultimately doomed the repeal effort.  After being fed fantasies for seven years, average Fox News-ingesting conservatives–like Trump himself–came to believe that Obamacare really was a disaster and that their leaders had actual plans to do better.  But as Barack Obama warned Trump after the election, “Reality has a way of asserting itself.”  And the gap between healthcare reality and fantasy was massive, sucking the GOP’s repeal plans into the vortex in between.

It has long been clear that Republicans would be unable to produce effective healthcare legislation.  And it was predictable that this would all end with the GOP scampering away with a contrived excuse to preserve some dignity to fight another day.  That the best apparent excuse involved a non-decisive senator’s urological outlook speaks volumes about the shattered state of that dignity.

Republicans won’t soon give up the ghost of Obamacare repeal.  Fantasy or not, repeal has been the party’s central policy goal for seven years.  It’s much easier to keep taking potshots at universal healthcare and to fire off Hail Mary repeal bills than it is to rethink what it means to be a conservative in a governing party–particularly with a president void of core principles or long-term policy visions.  Right on cue, congressional Republicans are still leaving the door open to take yet another run at Obamacare in 2018, undeterred by their latest face-plant.

For the better part of a decade, Republicans have committed themselves to a policy mission premised on a series of fantasies. It’s no surprise that they’d conjure one more to excuse their failure—a way to cling to the illusion that they’ll grab the brass ring next time.

So they beat on, boats against the current, forever one healthy urinary tract away from the promised land.

Kamala Harris & the progressive healthcare message, take 2

In May, Democratic Senator Kamala Harris sat down with the Pod Save America guys for and laid out a somewhat jumbled four-part message on healthcare, vowing to: (1) protect Obamacare from then-active Republican repeal efforts, (2) empower government to combat prescription price gouging, (3) “look at the Cadillac Tax and deal with that,” and finally, (4) pursue a Medicare-for-All-type system.

observed at the time that Harris’s rough-draft answer showed that there was work to be done on honing the affirmative message communicating the progressive vision for healthcare.  Burying a tepid endorsement of Medicare-for-All behind Cadillac Tax repeal left much to be desired.

Harris has significantly tightened up her healthcare message.  On Wednesday, she announced that she would co-sponsor Sen. Bernie Sanders’s upcoming single-payer bill.  “I intend to cosponsor the Medicare for All bill,” Harris tweeted.  “Health care is a right, not a privilege.”

Harris is a probable 2020 contender for the presidential nomination.  While others have expressed support for single-payer, she is the first establishment Democratic to put her name on actual legislation.

This is yet another indicator that the center of gravity within the Democratic Party is swarming to the left.  Harris took some flack from the left for allegedly lacking progressive bonafides.  I argued that Harris and other prominent center-left Democrats are actually testaments to the left’s success in reshaping the party’s agenda.  Her unequivocal embrace of single-payer now adds to that success.

She endorsed the view that healthcare is a fundamental right.  This is a common rhetorical assertion among progressives.  But it has the benefit of uniting the party’s supposed rift between those prioritizing economic issues and others prioritizing social and identity issues.  “Healthcare is a right” presents universal coverage as an issue of both economic and social justice.

Still, there is reason to slow down the Democratic rush to sign on to single-payer healthcare.  Democrats may quickly find themselves on the wrong side of the public’s deep status quo bias toward healthcare–the same fear of change that stymied Republicans’ Obamacare repeal efforts this year.  The public may express support for a single-payer system as a way of voicing dissatisfaction with our current healthcare system.  But when the rubber hits the road, for many people, there’s just too much at stake in healthcare to venture too far away from the system they already know.

There are always painful tradeoffs in healthcare.  There are transitions that must be navigated, revenues that must be raised, and industries that must be displaced or accommodated.  By putting their names to legislation, Harris and other Democrats will be taking sides in those tradeoffs.  Medicare-for-All will no longer be an abstract wishful preference.  It will be real dollars and cents, legislative carve-outs and burdens.

The progressive healthcare vision is coming together in refreshingly bold terms.  But Harris and other Democrats need to make sure that they are prepared to stand by all that this entails.

How the Obamacare repeal fight could lead to bigger government

The Republican legislative charge against Obamacare appears to be dead for the time being.  But the GOP’s bedeviling ordeal to roll back the healthcare law may have already backfired. Progressives might come away from this fight seeing virtue in reaching for bigger government solutions for America’s social safety net.

Obamacare’s staying power is Exhibit A of how social insurance programs are inherently sticky.  Political scientist Paul Pierson has observed that conservatives perpetually fall well short of reversing the biggest expansions of the welfare state.  Ronald Reagan largely acquiesced to Medicare and Social Security—even though he had long opposed both programs as menaces to American freedom.  In the United Kingdom, Margaret Thatcher was stymied from unwinding Britain’s national healthcare system.

Pierson theorized that welfare state expansions last because they fundamentally reshape politics by creating strong interest groups of beneficiaries to defend these programs.  “[T]he emergence of powerful groups surrounding social programs may make the welfare state less dependent on the political parties, social movements, and labor organizations that expanded social programs in the first place,” Pierson argued.

That’s why the defense of Obamacare this year proved so potent.  The law’s Medicaid expansion created a new class of beneficiaries to advocate for the program, and who stood to become human carnage under any rollback.  And the law created a constituency of people who counted on government help to get affordable decent coverage, and others who depended on the law’s regulations to protect them from pre-existing conditions exclusions or lifetime caps on benefits.  Quite simply, Obamacare helped a lot of people—many of whom became passionate and highly credible advocates for the law in 2017.

So if Democrats can just heave a new social program over the finish line in Congress, that program can then generate its own defenders even if the political climate in Washington swings to the right.  In 2010, Democrats squeaked Obamacare into law, and then proceeded to lose both houses of Congress and the White House over the ensuing six years.  But by cultivating a new class of Obamacare beneficiaries, the law became remarkably resilient even as Democrats’ hold on power collapsed.

So what type of program should Democrats be trying to muster into law?  One that can withstand permanent conservative opposition.  One thing is clear from the Obamacare experience: Democrats will get no credit or Republican buy-in for adopting a moderate, market-centered approach for social insurance programs.  Obamacare’s health insurance marketplaces were designed as public-private partnerships, where the government relies on private insurers to help expand healthcare access.  Democrats famously poached this idea from former Republican presidential nominee Mitt Romney’s tenure as governor of Massachusetts.  Still, Republicans vehemently turned on their own idea simply because a Democratic president had embraced it.

But a moderate policy design without bipartisan support has turned out to be extremely vulnerable.  While Obamacare stands mostly intact in spite of fervent conservative opposition, the prospect of full or partial repeal of the law perpetually spooks insurance companies.  Insurers hike premiums or leave markets altogether, jeopardizing the ability of whole swaths of the country to meaningfully benefit from national health reform.  And of course, when a hostile administration is charged with running the program, there are countless levers it can pull to deliberately trigger an insurer stampede and to cause the program to fail.  Obamacare’s design leaves it at enormous risk under a saboteur-in-chief.

The solution is to bolster social programs with more robust government-run options.  Skittish Democrats built Obamacare around private insurers in order to avoid being tagged as executing a big government takeover of healthcare—but conservatives called it one anyway.  If Democrats are going to be branded as overreaching socialists either way, then they may as well come away with something stronger to show for it, rather than settling for a rickety structure dependent on the voluntary participation of bottom-line-driven private companies.

To be effective in the long run, most social insurance programs need public options.  For Obamacare, this might mean opening up Medicare, Medicaid, or other public insurance programs to scoop up those who are being underserved by the law’s private insurance expansion.  Or maybe it means transcending Obamacare altogether with a single-payer system.  Either way, buttressing Obamacare requires tilting the law’s center of gravity away from private insurance options and toward public ones.

After all, while the GOP may be licking its wounds for now, don’t count on its anti-Obamacare fever to ever truly break.  A few congressional Republicans may be ready to finally pursue pragmatic tweaks to make Obamacare work better.  But opposition to universal healthcare has been the central tenet of the Republican Party for nearly a decade.  It’s far more convenient for the GOP to continue launching salvo after salvo at the law than it is to rethink what it means to be a conservative.

Republicans were still coming after Social Security seventy years after its enactment, trying and failing to partially privatize the program in 2005.  Paul Ryan still dreams of dismantling Medicare fifty years after LBJ signed it into law—a dream built around the same public-private health insurance partnership that he and his party discredited under Obamacare.

If this history is any guide, there’s little use in hoping for a true truce over the pillars of the welfare state.  Instead, progressives must fortify them to withstand an interminable barrage.

The Senate healthcare bill might be unconstitutional

Senate Republicans just won’t let their healthcare bill die. But if the political process doesn’t kill it, the U.S. Constitution might. That’s because the Senate bill now imposes insurance market death spirals on any state that fails to step in to create its own positive health policy. That very well may be unconstitutional under the Tenth Amendment’s prohibition on coercing the states.

On Friday, the Senate’s Better Care Reconciliation Act (“BCRA”) took a Byrd Bath. That’s the process by which the Senate parliamentarian reviews a reconciliation bill to make sure each provision is related to the federal budget. Provisions that aren’t sufficiently related to spending get eliminated from the bill and cannot be passed by a bare majority reconciliation vote.

Unfortunately for the GOP’s already-floundering healthcare effort, the parliamentarian just knocked out some major provisions of BCRA. She ruled that a provision defunding Planned Parenthood requires sixty votes to succeed. And she ruled that a provision prohibiting federal tax credits from paying for abortion services requires sixty votes as well.

These are deep political blows to Republicans, making “passage almost impossible,” according to Rep. Mark Meadows. But perhaps the most devastating decision by the parliamentarian struck down the GOP’s six-month lockout proposal. This policy was meant to be a conservative replacement for Obamacare’s individual mandate. It would make anyone who failed to maintain continuous insurance coverage wait six months before signing up for insurance. This is meant to stabilize insurance markets by nudging healthy people to sign up or face a six-month penalty.

Without the six-month lockup provision, BCRA suddenly has no mechanism to stabilize insurance markets. This leaves Senate Republicans courting insurance market disaster. The GOP would leave in place Obamacare’s politically popular guaranteed issue and community rating requirements. Guaranteed issue means that insurers cannot deny coverage to people with preexisting conditions. Community rating requires insurers to offer coverage to sick people at the same price they offer to healthy people.

For insurance markets to remain stable under these regulations, they must have a broad risk pool with a substantial number of healthy people enrolled in coverage. That’s why the individual mandate to purchase coverage is so crucial, pulling healthy people into the market. Without any type of penalty for forgoing insurance, anyone can buy insurance at any time. This means that more healthy people will decide not to purchase insurance until they need it. With the healthiest people opting out of the market, costs go up for everyone else, leaving a sicker risk pool left over. The next healthiest group then drops coverage, making costs rise and the risk pool sicker still.

This is what’s known as an insurance market death spiral — a process that culminates in a moribund insurance market with few if any insurers willing to sell. And that’s exactly what would happen under either GOP healthcare bill. For Senate Republicans to press ahead with BCRA in its current form would be to deliberately inflict insurance market death spirals.

At the same time, the GOP bill loosens the requirements for states to obtain waivers from federal regulations. As Nicholas Bagley explained at Vox, “Under the Affordable Care Act, a state has to show that its alternative plan would allow it to cover as many people, with coverage as generous, without increasing federal spending. [. . .] [But] [u]nder the Senate bill, to get a waiver, a state doesn’t have to demonstrate anything about coverage. Instead, it just has to show that the plan won’t ‘increase the federal deficit.’”

This makes it significantly easier for states to obtain waivers from national healthcare rules. Indeed, as long as a state’s proposed plan doesn’t increase federal spending, the federal government is required to grant that state’s waiver request under BCRA.

So post-Byrd Bath, the Senate bill pairs disastrous, death-spiral inducing federal insurance market rules with a much more permissive process for states to obtain waivers from those very rules. From one vantage point, it appears that the Republican Congress could even be threatening a booby-trapped insurance market if states don’t take action to seek waivers to implement their own regulatory policies. That is, the GOP healthcare bill is so bad, it could only reasonably be meant to provoke state-based reform.

That’s where the Senate bill gets into constitutional trouble. The Supreme Court has read the Tenth Amendment to prohibit Congress from enacting legislation that coerces the states. The states are sovereign entities, and Congress cannot try to compel desired action from them through overly strong-arm tactics. For instance, when Obamacare threatened to cut off all pre-existing Medicaid funding from any state that declined to expand its program to cover the near poor, the Supreme Court held that this threat amounted to undue coercion. As Chief Justice John Roberts put it in NFIB v. Sebelius, this threat amounted to Congress pointing a “gun to the head” of the states. No reasonable state would have had any meaningful choice.

One could read BCRA as posing a similar threat to the states: adopt state-based health reform, or have your insurance markets destroyed by malicious federal regulation. Indeed, this promotes the conservative preference for federalism and state-level policymaking. Under BCRA, if state lawmakers want healthy insurance markets, they will need to take affirmative legislative action to enact market-stabilizing policies and to seek federal waivers to take steps to save their insurance markets.

This looks awfully coercive. If states don’t act, BCRA’s perverse regulatory regime destroys their insurance markets. BCRA thus becomes a way to compel state action.

But don’t take my word for it. There’s some indication that the Supreme Court considers the threat of insurance death spirals to be constitutionally problematic. In King v. Burwell, opponents of Obamacare argued that Congress had conditioned subsidies for individual insurance enrollees on each state’s decision to run an insurance marketplace. If so, that meant that Congress had threatened states with insurance market death spirals if they didn’t run their own exchanges: without subsidies, the individual mandate would be inoperative while guaranteed issue and community rating remain in effect (the same dynamic as under BCRA). Such a federal regulatory environment would have plunged insurance markets into death spirals in states that refused to comply with the wishes of Congress.

A coalition of law professors and non-profit organizations presented this problem to the Supreme Court in an amicus brief (on which I advised). And at oral arguments, multiple justices worried about the coercive effects of Congress imposing death spirals on the states. Justice Anthony Kennedy called it “a serious constitutional problem.” “The states are being told: Either create your own exchange, or we’ll send your insurance market into a death spiral,” he said.

Justice Sonia Sotomayor was similarly troubled by the coercive implications of the plaintiffs’ reading of the ACA. “If we read it the way you’re saying,” she said, “then we’re going to read the statute as intruding on the federal-state relationship, because then the states are going to be coerced into establishing their own exchanges.” (In its opinion, the court ultimately steered clear of any constitutional issues by locating an anti-death spiral constraint in the statute itself.)

Granted, these are the oral argument musings of just two of the Court’s nine justices. But one could imagine a state opposed to Obamacare repeal seizing on these hints from King v. Burwell to attack BCRA in court, pressing the Supreme Court to deal with the “serious constitutional problem.” For BCRA presents a unique perversion of the federal-state relationship: federal legislation so awful that it coerces any reasonable state into action.

The Senate’s healthcare bill was bad when it was introduced, and it got made worse after undergoing its Byrd Bath. The GOP’s healthcare effort is no longer just politically dire. It has now ventured into potentially unconstitutional territory. The same is true of the Senate’s alternative “repeal only” bill, which too would eliminate the individual mandate without bothering to supply any replacement.

The Senate is due to vote to begin debate on Obamacare repeal in a matter of hours. After the parliamentarian’s decision, the Senate’s bill currently lacks any meaningful way to protect insurance markets. If Senate Republicans press on with the bill in its current form, they will be assenting to inflicting grave harm on health insurance markets across the country. And they may be casting a bad vote for a bill that’s on the wrong side of the Constitution.

 

Note: This post is cross-posted at Medium.

Medicaid is once again a conservative piñata

Margot Sanger-Katz writes at the New York Times that the Republican healthcare bill is increasingly becoming a rollback of Medicaid:

“[T]he Medicaid caps have not drawn the same public outcry as other provisions of the law that would cut back on coverage more directly. Several Republican senators have expressed concerns about changes to Obamacare’s Medicaid expansion, which broadened the program to include more low-income adults in 31 states. [ ] Others worry about changes to private insurance subsidies that would make insurance less affordable to older, middle-class Americans. Fewer have spoken out about the cuts to Medicaid’s legacy beneficiaries. That means that, as the Senate works out final details, the forced diet for Medicaid is likely to stay in the bill.”

The GOP bill plans draconian cuts to the Medicaid program, both by unwinding Obamacare’s expansion of Medicaid coverage to people earning up to 138 percent of the poverty line, and by capping the amount that the federal government will chip in to cover people on “traditional” Medicaid.  These cuts jeopardize healthcare for people from all walks of life, including middle-class families with children with disabilities, or elderly people in nursing homes.  Nearly one hundred million Americans rely on Medicaid—our country’s largest health insurer.

But in the conservative war against Obamacare, Medicaid has always been a convenient target.  In the first hotly politicized court challenge to Obamacare in 2012, the Supreme Court upheld the law’s individual mandate, but weakened its Medicaid expansion by making it voluntary for the states.  Even liberal justices Stephen Breyer and Elena Kagan joined the Court’s conservatives in striking down the mandatory Medicaid expansion.  This preserved the individual insurance markets for the middle-class, while leaving public insurance coverage for the near-poor at the whims of state governments.

Conservative lawmakers seized on the “Red State Option” opened up by the Court to make their stand against Obamacare.  Nineteen states held out and refused free federal money to cover nearly all of the expansion.  Instead, conservative state leaders denied healthcare coverage to some 2.5 million people in order to claim a scalp from Obamacare.

Conservatives at the time trotted out half-hearted pretextual reasons for spurning the Medicaid expansion.  Some argued that they didn’t believe the federal government would maintain funding for Medicaid.  Others second-guessed Congress for running deficits and taking on new debts to extend healthcare to more people.

The irony, of course, is that until now, the federal government has never permanently reduced state funding for Medicaid—and has twice increased funding in the last twenty years.  (A small exception was in 1981, when President Reagan and Congress enacted a temporary Medicaid funding cut.)  It required a conservative takeover of Washington to bootstrap in the spurious fear of Medicaid cuts that their ideological brethren supposedly fretted over in the states.

What’s more, the concern-trolling of state conservatives over the federal debt is proving just as hollow.  Congressional Republicans are poised to slash Medicaid funding for the poor with one hand while doling out gargantuan tax cuts for the wealthy donor class with the other.  The net impact of squeezing Medicaid on the federal debt will be negligible at best.  Yet the silence from conservative fiscal hawks is deafening.

A second irony (really more of a tragedy) in the Republican healthcare ransacking is that Medicaid had been the most successful vehicle for Obamacare’s coverage expansion, helping cut the uninsured rate in the United States to never-before-seen lows.  The subsidized private insurance marketplaces have only reached half the size that the Congressional Budget Office expected when the law was enacted.  But Medicaid has outpaced expectations, signing up 40 percent more people than CBO expected—even though a couple million people have been blocked from signing up by conservative state governments.

Medicaid is an inherently institutionally vulnerable program because its traditionally thought of as a program principally for the poor.  Liberals like Bill Clinton have tried to refashion our perception of Medicaid over the years, pointing out (correctly) that it provides life-saving and valuable services for the middle-class, too.

Up until now, Medicaid’s protectors have been able to stave off the full conservative assault on the program.  But it’s not without its scars from the persistent attacks.  Seven years after Obamacare became law, conservatives are still hunting for enough scalps to claim a victorious repeal.  And now that they’re in power, Medicaid is their juiciest target.  Perhaps they really will live out the fantasies of Paul Ryan’s keg parties past.

Kamala Harris & the progressive healthcare message

Sen. Kamala Harris is the newly-elected junior senator from California, and one of the Democratic Party’s rising stars.  She recently sat down for a live taping of the popular podcast Pod Save America in San Francisco.  Jon Favreau asked Harris about what the Democrats’ positive message on healthcare should be.  Her answer is worth exploring, for it gets at substantive decisions that Democrats must reckon with as they chart a path forward in both immediate resistance and future governance.

First, Harris said that “step number one is not to eliminate” Obamacare, reciting the Congressional Budget Office’s projection that the Republicans’ repeal bill will throw 24 million people off of their coverage.  So far, so good—but that’s not a positive message, it’s a defensive one.

Next, she pivoted to talking about ways to improve Obamacare.  But she only mentioned allowing the government to negotiate prescription drug costs “so these prescription drug companies aren’t just taking such advantage of us,” and pointed to the Epi-Pen price-gouging scandal.

Sensing that this was a pretty thin positive message, Jon Lovett pushed her to name more things that Democrats should do to improve healthcare.  And Harris responded by pointing to…the Cadillac Tax.  “I think we need to look at the Cadillac Tax and deal with that,” Harris said.

Harris continued, offering some prolonged word salad of stammering qualifiers before endorsing a Medicare for All single-payer system as the vision of progressive healthcare.  “And then there is what we need to do around really at some point figuring out how at some level we are going to have a policy that is Medicare for All.  That would be the ultimate and great place to be, Medicare for All.”  Her pitch for Medicare for All won much applause from the crowd.

Harris declined to formally endorse the single-payer bill winding its way through the California legislature, saying, “I like the concept but we need to work out the details.”  She concluded that as a country, “We need to get to a place where it is not a function of your income that you have access to healthcare.”

It’s worth unpacking that answer.  Leading off her “positive message” on healthcare by talking about the Cadillac Tax is baffling to say the least.   The Cadillac Tax is an Obamacare provision that imposes an excise tax on the most expensive — and generous — health insurance plans offered by employers.  This is meant to both generate revenue for Obamacare’s coverage expansion, and to steer employers away from uber-comprehensive insurance plans that help drive up healthcare costs.  The tax is unpopular—liberals like Bernie Sanders and Hillary Clinton have joined conservatives and labor groups in pushing for its repeal—and has been routinely delayed by Congress.  It isn’t scheduled to take effect until next year.

Presumably, when Harris says that we need to “deal with” the Cadillac Tax, she means we need to repeal it.  But endorsing a rollback of a subsidiary part of Obamacare that will help pay for its coverage expansions won’t exactly stir progressive ambitions.

Harris ultimately got around to re-iterating that guaranteed healthcare for all is the long-term progressive vision, backing a government-run system.  She stood up for the principle that healthcare is a right that should not be dependent on one’s income.  And letting Medicare negotiate drug prices is a fine idea—one that Trump himself might be amenable to working with Democrats on.

But there’s a lot to work through in Harris’s support for Medicare for All as the party’s positive vision.  As I have written, there is both significant apprehension and large institutional hurdles surrounding single-payer healthcare that won’t be easily overcome.  There are other progressive policies—like a Medicare buy-in, a public option, and expanded Medicaid eligibility—that would make progress toward government-provided healthcare for all, without crumbling under the weight of intense public and stakeholder opposition.

So is Harris endorsing Medicare for All as an imminent solution?  If so, is she throwing out Obamacare and starting from scratch, or building on it with incremental reforms?  What do those reforms look like?  Does that make Medicare for All in fact just a long-term aspiration that maybe just might eventually obtain “at some level”?

In Harris’s defense, a podcast interview probably isn’t the venue to suss out these nuances.  But without these details, “Medicare for All” becomes little more than a slogan—an applause line for liberal crowds.  Maybe that’s the future of progressive health policy: campaign on “Medicare for All”, but enact “Medicare for More.”

Harris is also far from the only prominent Democrat to fumble a progressive healthcare message.  Sen. Cory Booker (another potential 2020 contender) recently gave a similarly mealy-mouthed answer on Medicare for All, which his office cleaned up as “one of those ideas that must be considered.”

Like Booker, Harris is a compelling and engaging politician, and has an exciting future as a Democratic leader.  Like many other prominent procedural or “rights-oriented” liberals, she seems much more at ease standing up for social justice than for economic justice.  And she’s hardly the first upcoming Democratic politician to give a jumbled answer on healthcare—Barack Obama famously fell flat at a healthcare forum early in his 2008 campaign for president.

But Harris’s answer is illustrative of a bigger problem for the Democratic Party.  Maybe Democrats have been too consumed with the fate to save what they’ve already accomplish to flesh out just exactly what comes next.  But in resisting Republican efforts to tear down Obamacare, it’s essential to explain just what exactly the Democratic alternative looks like.  If Harris’s positive message on healthcare is any indication, there’s more work to be done on figuring out just what the alternative will be.