I wouldn’t say the mood among Republicans is exactly giddy. Even Fox News seemed a little stunned that Donald Trump has been elected president of the United States. But one priority has joined #NeverTrumpers and those who want to Make America Great Again: Repeal Obamacare.
I’ll believe it when I see it.
Republicans would like to vote for something they can call “repealing Obamacare.” The problem is that will involve getting rid of two provisions that are really popular: “guaranteed issue” (insurers can’t refuse to sell insurance to someone because of their health status) and “community rating” (insurers can’t agree to sell a policy to some undesirable customer for a million dollars a year; the company has to sell to everyone in a given age group at the same price).
These provisions are popular with voters across the spectrum. Unfortunately, they tend to send health insurance markets into a “death spiral”: People know they can always buy insurance if they get sick, so a lot don’t buy insurance until they get sick. Because sick people are expensive to cover, insurers have to raise the price of insurance, which means the healthiest people left in the pool drop their insurance, so the price goes up.
Obamacare is built to counter this problem — with subsidies to bring down the price for many Americans, a mandate for individuals to buy insurance or face tax penalties, and rules on enrollment timing to complicate “gaming the system.” These are the unpopular parts of Obamacare.
Repeal will involve getting rid of the unpopular bits and the popular bits. Republicans will be under enormous pressure to repeal just the unpopular parts, which would make the individual market even more dysfunctional than it is now. I wish good luck to any member of Congress who explains to voters that if they want the popular parts, they need the unpopular parts, too.
So I suspect that “Repeal Obamacare” will meet the same fate as Social Security reform. Legislators were gung ho. Even the base was sort of theoretically in favor of it. President George W. Bush made it his signature initiative for his second term. But the more he talked about what reform would actually involve, the more he spooked voters. Even though his party had control of both the House and the Senate, Bush eventually had to admit he couldn’t get it done.
Repealing Obamacare is not Trump’s signature initiative; I suspect he doesn’t much care. He won’t be pushing as hard for it as the Bush administration was for Social Security reform. A lot of people in Congress want it — but until now, that’s been a free desire; they could pass doomed bills to repeal Obamacare without having to face voter wrath when folks discovered they’d gotten rid of guaranteed issue and community rating. So I am skeptical that Obamacare will be repealed immediately. What might Republicans do instead?
The most obvious answer is: Wait for it to die a natural death. While Trump will not push hard for repeal, he will probably not push to save Obamacare, either. There will be no special deals for insurers who stick with the exchanges. His Department of Health and Human Services is not going to have a crack team devoted to coming up with ingenious regulatory tricks and dodgy funding mechanisms to make the exchanges work. Obamacare’s market structure is so deeply flawed that even benign neglect will probably prove fatal in fairly short order.
Repealing guaranteed issue and community rating is hard as long as people can still buy insurance. But if we end up in a situation where, say, half the counties in the U.S. have no policies available on Obamacare exchanges, Americans are not going to care so much about a theoretical right to buy insurance. This could be paired with things like capping and block-granting Medicaid benefits into what you might call a “non-repeal repeal.”
The problem is that for this to become possible, things have to get much worse before they get better. Moreover, the disaster of Obama’s experiment will have tainted health care reform. No politician will want to touch it for a long while. So, at best, we’ll manage to return to what we had before Obamacare — a situation that no one was satisfied with. That’s nothing to celebrate on either side of the aisle.
