Republicans Wave the White Flag on Obamacare - The American Spectator | USA News and Politics
Republicans Wave the White Flag on Obamacare

Ulysses S. Grant, victor of countless fights with Democrats both on and off the battlefield, defined the difference between winners and losers thus: “In every battle there comes a time when both sides consider themselves beaten, then he who continues the attack wins.” This is precisely where the long twilight struggle over the “Affordable Care Act” now stands. Obamacare is clearly collapsing, the Democrats are fighting a desperate rearguard action to save it, yet some key Republicans want to capitulate. Simply because their latest repeal effort failed by a few votes, Senators like Tennessee’s Lamar Alexander are waving the white flag.

Alexander is Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, which will this week begin hearings whose ostensible purpose will be to explore ideas on how to “stabilize” the individual insurance market. Their real purpose, of course, will be to negotiate the terms of surrender. The committee will hear testimony from insurance executives, state insurance commissioners, and alleged policy experts. But the real action will be on Thursday when testimony will be provided by selected state governors, more than one of whom recently joined Ohio RINO John Kasich in calling for Congress to bail out Obamacare.

The bailout plan offered by Kasich, et al., was provided in a letter to the Senate leadership and it recites all the usual talking points. It points out that “Proposed premiums for the most popular exchange plans are expected to increase 18 percent in 2018 and 2.5 million residents in 1,400 counties will have only one carrier available to them on the exchange.” Predictably, it blames this not on Obamacare’s hopelessly perverse incentives, the attempt to force healthy young people to subsidize coverage for older and sicker enrollees, but on “uncertainty.” And its recommendations consist of the usual tired pleas for taxpayer-funded subsidies:

Fund cost sharing reduction payments. The Trump Administration should commit to making cost sharing reduction (CSR) payments. The National Association of Insurance Commissioners (NAIC), National Governors Association, and United States Chamber of Commerce have identified this as an urgent necessity. The Congressional Budget Office (CBO) estimates not making these payments would drive up premiums 20-25 percent and increase the federal deficit $194 billion over ten years.

These CSR payments, you will recall, were never authorized by Congress. When the Obama administration began distributing this money without a congressional appropriation, it resulted in a lawsuit: House of Representatives v. Burwell. A ruling from U.S. District Judge Rosemary Collyer held that the payments flouted the Appropriations Clause of the Constitution. She pointed out that only Congress has the power to spend taxpayer funds. Nonetheless, the governors want the Trump administration to fight Collyer’s ruling and continue making the unconstitutional CSR payments. Even worse they want to exhume the “risk corridor” program:

Stabilize risk pools. The ACA created several risk sharing programs to help effectively manage the risk of the individual insurance market. However, the federal government has gone back on its commitment to these programs, in some cases refusing to fully fund risk sharing programs. Congress should modify and strengthen federal risk sharing mechanisms, including risk adjustments and reinsurance. This commitment to federal risk sharing will augment the state efforts that are supported by the stability fund.

Governor Kasich has been in Congress and knows full well that the government hasn’t “gone back on its commitment.” The brainstorm behind the “risk sharing” program was that insurers enjoying big margins would pay into a pool from which less profitable plans would be subsidized. But Congress stipulated that the program had to be budget neutral. Predictably, the profitable plans pay far less into the pool than the unprofitable plans lose. Yet Kasich, et al., want Congress to ignore the neutrality rule and cover insurer losses anyway. If that seems less than insightful, it is positively brilliant compared to their recommendation on the individual mandate:

Keep the individual mandate for now. Finally, to prevent a rapid exit of additional carriers from the marketplace, Congress should leave the individual mandate in place until it can devise a credible replacement. The current mandate is unpopular, but for the time being it is perhaps the most important incentive for healthy people to enroll in coverage. Until Congress comes up with a better solution — or states request waivers to implement a workable alternative — the individual mandate is necessary to keep markets stable in the short term.

The governors are evidently the last people in the galaxy who believe the individual mandate works. As they themselves point out, “Approximately 22 million people now purchase coverage through the individual market, but another 27 million remain uninsured.” They go on to claim that the mandate is the “most important incentive for healthy people to enroll in coverage.” Evidently, 27 million people failed to get that memo. The cost of a plan purchased through an Obamacare exchange is far more than the maximum penalty for failing to purchase coverage. For young, healthy individuals it makes more sense to pay the fine and bank the difference.

But Kasich & Co. don’t seem to get this, and the rest of their recommendations indicate there is much else they don’t understand about how the U.S. health care system works. They certainly have no idea what drives health care inflation, and offer no suggestion for controlling it that passes the laugh test. Yet it is very likely that Lamar Alexander and his HELP committee will use the recommendations of these governors as the basis for the inevitable proposal to bail out Obamacare. They are obviously determined to surrender to the Democrats on this issue, regardless of their promises to the voters during the last four election cycles.

Which brings us back to Ulysses S. Grant, whose opinion of people like Lamar Alexander, John Kasich, and other such trimmers he summed up as follows: “Cheap cigars come in handy. They stifle the odor of cheap politicians.”

David Catron
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David Catron is a recovering health care consultant and frequent contributor to The American Spectator. You can follow him on Twitter at @Catronicus.
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