Why the Republicans Cannot “Replace” Obamacare

By William K. Black
January 27, 2017     Bloomington, MN

I have just listened to Lawrence O’Donnell’s program on Friday, January 27, 2017.  It was a strong program, but I offer these friendly amendments on his discussion of the Washington Post story titled “Behind closed doors, Republican lawmakers fret about how to repeal Obamacare.”  O’Donnell and his guests spoke exclusively of how difficult it was for the Republicans to come up with a plan to replace Obamacare and making the point that the leaked transcript of the closed Republican meeting proved that the Republicans had no plan.  The thrust of the comments was that the explanation for the difficulty was the technical complexity of the issues and differences of policy views among congressional Republicans.  Neither explanation is accurate.  The problem is much more basic, and explains why Republicans did not use their exceptional leverage to amend the draft Affordable Care Act that would have improved it, why they have not come up with a replacement plan in seven years,  and why they will not be able to come up with a replacement plan in the future.

People have forgotten that President Obama and Democratic Senators made extraordinary efforts to get Republican support for the bill in the Senate.  The “gang of six” (three Democratic and three Republican Senators) deliberations stalled the bill for months.  Had even a single Republican Senator been willing to support a superior health insurance plan, Obama would have leaped at the opportunity to support his or her amendment improving the bill.  Senators knew that Obama was desperate to attract even a token Republican Senator to support an Affordable Care Act bill.  Senators knew that this meant that every Republican Senator had unprecedented political power to amend the bill by adding superior provisions – in return for supporting the amended bill.  No Republican Senator took advantage of that power because any change to the health insurance bill that would have improved it was anathema to Republicans.

The problem is not that Obamacare is such an excellent program that it has no superior replacement.  The problem is that the superior programs are unacceptable to the Republicans on ideological grounds.  Indeed, the Congressional Republicans detest the superior alternatives because they are superior.  The superior programs would have a far broader governmental role than does Obamacare.  The Republicans do not want effective domestic governmental programs because it would discredit their claims that the government programs invariably fail.

Obamacare’s model is a far-right Heritage Foundation plan that Mitt Romney convinced Massachusetts to adopt when he was governor.  Heritage’s design deliberately, for ideological reasons, minimized the governmental role and cost containment.  The price of President Obama’s deal with the health insurance companies not to use their lobbying power to kill his Obamacare proposal was his willingness to minimize the role of the government and not include effective cost controls in the bill.  The Republicans will not increase the role of government for political and ideological reasons.  The Republicans will not impose effective cost controls on insurers and medical providers for the same reasons that Obama refused to do so.  They fear the insurers and medical providers’ lobbying power and fear the loss of campaign contributions.

Experts anticipated the problems Obamacare is experiencing.  The weak cost controls, limited competition, and the small numbers of participating insurers will continue to lead to premium increases and high deductibles that will make coverage illusory for many working class Americans.  Cost increases under Obamacare are smaller than anticipated.  The Great Recession’s severity led to many years of minimal inflation.

The Republicans could create a superior system by offering a public option that would create competitive pressures to contain cost, extending Medicare to all citizens to reduce the cost of providing care through private insurance, or providing a national health system.  Each of those options, however, is unacceptable to them on ideological grounds.  That self-inflicted restraint means that there is no superior alternative to Obamacare.  That is why the Republicans have not developed, much less proposed, much less enacted a “substitute” plan for Obamacare over the last seven years.  That is why the Republicans cannot develop a superior plan even though they control totally the federal government.  It has nothing to do with the fact that medicine and private insurance are “complicated” or that Republican legislators differ in the degree to which they are willing to return millions of Americans to uninsured status.  There are, of course, limitless ways to replace Obamacare with inferior plans.  The leaks of the closed-door Republican meeting prove what we knew – the Republicans fear the political cost of replacing Obamacare with an inferior private insurance plan.

My prediction is that the Trump administration and the congressional Republicans will continue to take steps to exacerbate Obamacare’s difficulties in order to produce the breakdown of the existing system in several states.  Then they will repeal it as a failure and blame it on Obama.  They will add a fig leaf that purports to forbid insurers from denying “access” due to the applicant’s preexisting medical condition, but that access will be illusory due to the combination of cost and very high deductibles.  Trump’s representative at the Republican meeting indicated this strategy (in the administration’s characteristic dishonest manner).

Even as Bremberg [who heads Trump’s domestic policy office] offered few details about what the president plans to do, he emphasized that last week’s executive order “repeatedly” used phrases “such as ‘to the maximum extent permitted by law’ ” to enable his political appointees to start dismantling the ACA [the Affordable Care Act, a/k/a Obamacare] by executive authority.

“The president has now officially given direction [not only] to HHS, but to all of these agencies that have responsibility . . . to exercise all available discretion to begin helping the American people and to begin fixing our health-care system.”

The dishonesty, of course, is characterizing “dismantling” Obamacare as “helping the American people” by “fixing our health-care system.”  The strategy is to “dismantle” key provisions of Obamacare without replacement.  The administration designed the dismantling to degrade Obamacare to the point that it breaks down in multiple states and provides a pretext for its repeal.

When Trump and Republicans state that they “have” a “superior” plan to replace Obamacare they are lying.  They are lying because they refuse for ideological reasons to replace Obamacare with a superior plan.  There is too much emphasis on Trump’s daily lies as if they were an unprecedented departure from the consistent practice of the Republican Party for over a decade.  Congressional Republicans have been lying constantly for over seven years about their claim that they have a “plan” to enact a superior replacement for Obamacare.

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