Published May 3, 2013
It’s been a bad couple of months for Obamacare. News stories have finally started focusing on the reality of what the law will mean, not on the president’s unsubstantiated happy talk. Notwithstanding assertions to the contrary, millions of currently insured Americans will be forced to pay substantially higher premiums in 2014 because of the law’s regulations.
One analysis estimates that costs in the individual market will jump about 32 percent on average. Employers have strong incentives to slow down hiring to avoid Obamacare’s fines and penalties, and to move as many workers as possible out of full-time status and into part-time roles. This is already having an effect on the national work force.
Meanwhile, with deadlines looming, it is becoming increasingly apparent to everyone involved — including Democrats in Congress — that the Obama administration is badly mismanaging the law’s implementation. It’s widely expected that processes needed for a smooth rollout will not be in place by 2014 and that, as a consequence, participation in the program is likely to fall far short of what was predicted, at least in Year One. Younger and healthier Americans may refrain from signing up for coverage, pushing average premiums up in the Obamacare exchanges.
With so much chaos on the horizon, it is not surprising that congressional Democrats are attempting to distance themselves from the law’s implementation by pointing fingers at the Obama administration. Their clear intent is to avoid blame in the event that voters view the law as a bust and vote accordingly in the 2014 elections.
All of this creates a huge opening for Republicans. At the time of enactment, GOP opponents warned the public that the law was handing over far too much power to a distant and clumsy federal bureaucracy that would make no apologies for upending existing arrangements and imposing great economic harm on millions of workers and businesses as well as state governments. And that’s exactly what is happening. It should not be surprising that Obamacare’s poll numbers are now falling.
But for Obamacare opponents to take full advantage of the law’s vulnerabilities, they need to be united around a sound strategy for winning this fight. Recent events indicate that no such consensus exists.
Last week, House Republican leaders wanted to pass the Helping Sick Americans Now Act. Supporting this bill should have been an easy call for conservative members. The bill would eliminate the Prevention and Public Health Fund created by Obamacare and use some of the savings to reopen a high-risk pool to insure Americans with pre-existing conditions, a pool that the Obama administration had recently closed to new enrollment. The prevention fund isn’t really a public-health program at all. It is a permanent tap on the treasury (eventually rising to $2 billion per year) that the executive branch is using for just about any purpose it wants. Right now, that purpose is to fund Obamacare implementation because legitimate funding for the law’s implementation was rightly denied by the House GOP in the normal appropriations process. It is hard to imagine a funding stream that’s more of an affront to sound budgeting and accountability than the “prevention fund.”
The high-risk pool, too, was created in Obamacare, and was also poorly conceived. It imposed new rules on eligibility instead of allowing states to manage the funding. Incredibly, the administration found a way to waste taxpayer funds even as enrollment was anemic. The $5 billion set aside for the pool was spent on just 135,000 enrollees — far short of the 300,000 that the administration said at the time of enactment would be served. But instead of fixing the program, the administration chose to close off further enrollment when the funds ran out — leaving about 40,000 people out in the cold for the remainder of 2013.
This was a telling moment in the health-care fight. The president never tires of declaring how much he cares about people, the downtrodden, the struggling middle class, the sick, etc., etc. And yet, instead of actually doing something to help people with real illnesses get insurance coverage, the administration walked away from them, choosing to focus its resources on the Obamacare leviathan.
The political opening could not be wider, and House GOP leaders correctly decided to try and take advantage of it. Overall, the bill would cut $10.8 billion over a decade from the prevention fund (and much more over the longer term) and spend $2.8 billion to re-open the high-risk pool. The balance — $8 billion over ten years — would go toward reducing future federal borrowing. As the bill moved toward full consideration by the House, the administration announced that the president would veto it, presumably to keep wavering House Democrats from jumping ship.
The political talking points for this bill write themselves, starting with: “In order to protect funding for his political activist allies, the president is threatening to veto legislation that would provide 40,000 sick Americans with health insurance.”
Unfortunately, some House GOP members objected to the bill, apparently because they perceived that it would put new resources into an Obamacare-created program. The opponents were relatively few but enough to force a postponement of the bill’s consideration by the House. Their criticism is far off the mark. High-risk pools, even a poorly constructed one, are essentially a conservative reform, not a liberal one. The Obama administration never really liked the idea of the risk pool and therefore neglected the program it created, which is one reason it foundered. Done right, high-risk pools can be a key component of eliminating the problem of pre-existing conditions within a market-driven health system.
The back-and-forth over the merits of the House bill has also brought to the surface a long-simmering disagreement about the state of the overall health-care debate and how to move forward in the aftermath of the 2012 election.
There is within the anti-Obamacare coalition a vocal contingent that believes that creating a confrontation over full repeal or full defunding is the best, and really only, course to advance the overall cause. They are crafting measures to that effect and pushing to attach them to “must pass” bills, such as the debt-limit extension or appropriations bills. They are also against advancing bills that would highlight for repeal the most unpopular aspects of the law, fearing that those bills would get enacted and then make full repeal less likely.
The problem with this kind of approach is that it ignores entirely the most important consideration in this ongoing debate, which is how to win the public argument over the future of American health care. For the moment, the future of Obamacare isn’t a question of legislative tactics. It’s a question of political strategy — how to build a wave of public support behind a credible program to repeal Obamacare and replace it with something far better, and how to get that sentiment to prevail at the polls in 2014 and 2016. The excesses and deficiencies of Obamacare will go a long way toward convincing the public that there must be a better way. But the congressional GOP can and should also take steps to build its case and gain the upper hand in the argument. The bill to close down the prevention fund and apply some of the savings to a high-risk pool is one small step in that direction.
But it shouldn’t be the only step. The House should also consider a clean bill to repeal the Independent Payment Advisory Board — and force Democrats to defend the concept of delegating massive regulatory power in Medicare to an unelected board of 15 “experts.” And it should take up a clean repeal of the individual-mandate tax, too, and force its defenders to make the case for taxing the uninsured. These kinds of votes will be winning battles for the coalition opposed to Obamacare. But they are not the end game and should not be viewed as such.
The end game remains repeal and replace. It should be obvious to everyone that the current political context is not one in which conservatives can win that fight. But it is the right moment for slowing implementation as much as possible and, with a series of tactical successes, setting the stage for ultimate victory. Passing the House bill to defund the prevention “kitty” and provide insurance to the uninsurable is a great place to start.
— James C. Capretta is a senior fellow at the Ethics and Public Policy Center and a visiting fellow at the American Enterprise Institute.