Published February 20, 2013
Last year, the two best opportunities to stop Obamacare before it got implemented were missed. First, Chief Justice John Roberts bent over backwards to find the law’s individual mandate to be a constitutional tax on the uninsured. Then, the voters decided they preferred another term for President Obama over a Romney administration.
As a consequence, Obamacare isn’t going to be wiped off the federal books in the next few years.
This reality has important implications for congressional tactics. In the previous two years, everything that was done in the Republican-controlled House of Representatives was aimed at building momentum for full repeal in the event Romney won the White House. Since that didn’t happen, other tactics are necessary.
Congressional opponents of Obamacare need to do two things in the months ahead. First, they need to pursue legislation that can contain and minimize Obamacare so that a future president and Congress can still change direction if they choose to do so. Second, Congress needs to continue to cultivate public opposition to Obamacare by highlighting strong bipartisan opposition to its worst features. Bipartisan bills to repeal or substantially amend the law are especially important because they will sow disunity among Democrats and create openings for future revision.
The following is a top-ten list of health-care bills that could help Congress pursue these goals (although there are, of course, many other good ideas that would also help the cause). Each of these items could be pursued as stand-alone bills on the House floor.
The Obama administration chose to delay many of the most controversial implementing rules of Obamacare during 2012 to avoid stirring up opposition to the president during the election year. That decision has now put everything behind schedule. Moreover, a majority of states have decided (as was their right) not to build the state exchanges envisioned in the law, leaving the task to the federal government. And there’s no direct appropriation available to the federal government for this task. So it’s quite clear that implementing the law by January 2014 will create significant and unnecessary chaos in the insurance marketplace. Republicans should seize the opportunity this state of affairs provides and push for a delay of the law’s implementation. The administration will of course vigorously oppose any suggestion of delay, but many employers, states, and health-sector participants would welcome it.
2. IPAB REPEAL
The Independent Payment Advisory Board (IPAB) is the poster child of the Obama vision for cost control. The new agency, composed of 15 unelected “experts,” is supposed to enforce a new cap on Medicare spending growth, without any political accountability to the program’s beneficiaries. Moreover, the only tools IPAB can use are further reductions in what Medicare pays for the provision of services to patients. But these kinds of price controls drive suppliers out of the program and leave beneficiaries on waiting lists for services. A clean IPAB-repeal bill–with no other poison pills attached to it–is sure to draw significant Democratic support. The GOP should ensure such a vote occurs soon.
3. SCALE BACK PREMIUM-CREDIT SUBSIDIES
Obamacare has set in motion the largest entitlement expansion in a generation. In theory, the new law entitles all Americans with incomes between 133 percent and 400 percent of the poverty line to new subsidies for health insurance. According to the Census Bureau, there are 110 million Americans under age 65 in that income range. Once the subsidies are in place, the pressure in Congress will be to expand benefits for this large new cohort of entitled voters. President Obama has often said that Massachusetts was the model for the national law. Well, Massachusetts cut off its new entitlement at 300 percent of the poverty line. The House should advance a bill to do the same with Obamacare before the entitlement goes into effect.
4. REPEAL THE UNINSURED TAX (THE INDIVIDUAL MANDATE)
The chief justice ruled that the individual mandate could survive as a constitutional tax on those who fail to buy government-approved insurance. But that didn’t make it any more popular. Indeed, now that it is clearly just a tax on the uninsured, it will be more unpopular than ever. Ironically, according to the Congressional Budget Office, a repeal of this tax would reduce the deficit by nearly $300 billion over a decade as it would lead to fewer participants in the Obamacare entitlement expansion.
5. DEFUND THE CMS INNOVATION CENTER
Among many other things, Obamacare created a permanent recurring “mandatory appropriation” of $10 billion annually for what is called the Innovation Center in the Centers for Medicare and Medicaid Services (CMS). This funding pays for the agency’s federal staff as well as the costs of running tests of new ideas in the Medicare and Medicaid program. The agency’s mandate is so broad and ill-defined that just about anything could be justified. Moreover, giving the agency permanent funding like this runs against experience of what constitutes good budgeting practices. The House should terminate the funding and save what’s left of the original $10 billion appropriation.
6. BREAK THE EXCHANGE MONOPOLY
Obamacare shifts immense power to the federal government by moving millions of Americans into a federally sponsored system of insurance–the exchanges. Once citizens purchase insurance through the exchanges, the government can steadily exert more and more control over the plans and options available to them. The law’s power stems from the requirement that the new entitlement to subsidies for health insurance–called “premium credits”–can be used only in the Obamacare exchanges. The House GOP should challenge this requirement and propose giving Americans the right to use the premium credits outside the confines of Obamacare. For instance, citizens should be allowed to deposit the credits in existing health savings accounts without any requirements for changes.
7. SUSPEND INSURANCE RULES WHEN PREMIUM INCREASES EXCEED X PERCENT
Obamacare’s new insurance rules are expected to force large premium spikes on many millions of existing insurance enrollees. This will be especially true for younger consumers who could see premium increases of 30, 40, or 50 percent in some cases. The prospect of some groups paying such high premiums will create an opportunity for the House GOP to highlight the unfairness and irrationality of Obamacare. One way to bring attention to the matter would be to suspend the Obamacare insurance rules in circumstances in which they cause such a premium spike. Consumers would be allowed to stay with their current insurance under the old rules until the premium increase is no more than an acceptable percentage (such as 8 percent).
8. STATUTORY OPTION FOR STATE MEDICAID FLEXIBILITY
The Obama administration is desperate to get states to agree to expand their Medicaid programs as envisioned in the Patient Protection and Affordable Care Act. (The Supreme Court struck down the law’s requirement that states implement the expansion or face penalties; the expansion is now a state option.) Without state cooperation in this regard, the law will never come close to its coverage goals. But many governors are rightly reluctant to expand a program badly in need of fundamental reform. Republican governors should use their leverage and work with the House GOP to pass a statutory reform of Medicaid. In short, states should be given sweeping flexibility to manage Medicaid within a fixed and predictable budget.
9. ACO/MEDICARE SUPPLEMENTARY INSURANCE REFORM
Obamacare seeks to herd seniors into government-sanctioned HMOs–called Accountable Care Organizations (ACOs). Amazingly, the administration wants to do this without even advising most seniors that they have been placed into a managed-care plan, or without allowing them to share in the cost-savings that is supposedly the point of the effort. The House GOP should highlight the hypocrisy of such paternalism and give seniors genuine choices. They could choose to enroll in an ACO if they wish, and if they do enroll, they would get to share in any savings. This change could be coupled with a change to the secondary insurance rules allowing full coverage of all Medicare cost-sharing only for beneficiaries enrolled in cost-reducing ACOs.
10. REPEAL THE MEDICAL-DEVICE TAX
Obamacare is full of taxes–$1 trillion of them over a decade–and it’s important for the House to continue to highlight the damaging effects they will have on middle-class families. A very good example is the new tax on the medical-device industry that is already slowing research and innovation and forcing companies to cut back the size of their workforces. This is truly a “job killing” tax–and a straight repeal vote is sure to draw many Democrats who agree.
Full repeal of Obamacare is not going to happen in the near term, but that does not mean that the struggle over the future of American health care is over. It is not. This issue is far too important to the nation’s health and future prosperity to walk away from. There are still many things the House GOP can do to push health-care policy in a new direction short of full repeal. A good place to start would be to put the ten ideas described here into bill form, and then pass them.
James C. Capretta is a visiting fellow at the American Enterprise Institute and a senior fellow at the Ethics and Public Policy Center.