How the 2016 Republicans Will Fight Over the Future of Obamacare

Repeal, yes. But then what? Setting the stage for the presidential primary.

From left to right: Chris Christie, Jeb Bush, Marco Rubio, Rand Paul and Rick Perry
National Journal
Dylan Scott
Add to Briefcase
See more stories about...
Dylan Scott
March 30, 2015, 4 p.m.
  1. Re­peal Obama­care.
  2. ?????
  3. Con­ser­vat­ive health care re­form!

Every Re­pub­lic­an 2016 pres­id­en­tial hope­ful is go­ing to start their health care policy plat­form with re­peal­ing the Af­ford­able Care Act. It is a cent­ral ten­et of the faith.

But what then? Con­ser­vat­ive re­peal-and-re­place plans have popped up from time to time over the last five years, but rarely garnered more than token press cov­er­age and have nev­er re­ceived a full vote in front of Con­gress. In oth­er words: There has been no vig­or­ous de­bate that shapes a white pa­per in­to real policy.

Some con­tenders, like Louisi­ana Gov. Bobby Jin­dal, have pro­act­ively re­leased painstak­ingly de­tailed and com­pre­hens­ive plans. Oth­ers, like phys­i­cian Ben Car­son, have nev­er held pub­lic of­fice and nev­er needed to ex­plain their po­s­i­tions in much de­tail. Some pro­pos­als — like health sav­ings ac­counts, block-grant­ing Medi­caid, or al­low­ing in­sur­ance to be sold across state lines — are uni­ver­sally pop­u­lar on the right. But the pro­ver­bi­al dev­il is al­ways in the de­tails.

(RE­LATED: Obama­care Could Be in Trouble if It Drives Busi­nesses From In­sur­ance Mar­ket)

“I think you have to present something that is so at­tract­ive that people would flock to it,” Car­son told Na­tion­al Journ­al. “We need to bring the health care sys­tem in­to the free mar­ket.”

The pres­id­en­tial cam­paign might be the first op­por­tun­ity for Re­pub­lic­ans to really have the tough talk about how they would ac­tu­ally go about dis­mant­ling and re­pla­cing the law they’ve spent the last half dec­ade cam­paign­ing against.

There are ar­gu­ably three schools of thoughts with­in the GOP on health care, said Avik Roy, a seni­or fel­low at the Man­hat­tan In­sti­tute.

One wants to ef­fect­ively re­vert to a pre-Obama­care world. An­oth­er ac­know­ledges the new real­ity that Obama­care has cre­ated and en­cour­ages con­ser­vat­ives to con­sider what’s polit­ic­ally vi­able in that world. The third would say that Re­pub­lic­ans should yield the cov­er­age side of health care re­form to lib­er­als and work on the best free-mar­ket al­tern­at­ive they can muster without meas­ur­ing it against the ACA.

With that in mind, and some guid­ance from Roy and Douglas Holtz-Eakin, an­oth­er lead­ing con­ser­vat­ive policy wonk, former dir­ect­or of the Con­gres­sion­al Budget Of­fice, and John Mc­Cain 2008 cam­paign ad­viser who now heads the Amer­ic­an Ac­tion For­um, here are three big areas for de­bate in 2016.

Tax treat­ment of health in­sur­ance.

This is a big one, be­cause em­ploy­er-based health in­sur­ance cov­ers al­most half of the U.S. pop­u­la­tion, and a big reas­on for that is em­ploy­er con­tri­bu­tions are ex­cluded from taxes. You start mess­ing with that, and you risk a lot of people get­ting wor­ried that they’re go­ing to lose a plan they like. (Sound fa­mil­i­ar?)

But, Holtz-Eakin said, it is a big is­sue for con­ser­vat­ive wonks. They see the status quo, which ex­empts health-in­sur­ance con­tri­bu­tions from be­ing treated as tax­able in­come, as a huge sub­sidy that “feeds the ap­pet­ite for in­ap­pro­pri­ately large plans” and drive up costs. Obama­care could ac­tu­ally give Re­pub­lic­ans more free­dom on this is­sue, Roy poin­ted out, be­cause its “Ca­dillac Tax” has already in­sti­tuted a tax on em­ploy­er-based health in­sur­ance.

(RE­LATED: Obama­care Prom­ises Tax-Sea­son Sur­prises)

There are still likely to be some risks, though, de­pend­ing on what you pro­pose. The usu­al op­tions are elim­in­at­ing it, cap­ping, it or re­pla­cing it with some kind of tax cred­it that any in­di­vidu­als who pur­chase their own in­sur­ance can also use.

Here is one in­struct­ive epis­ode. Last year, Re­pub­lic­an Sens. Richard Burr, Or­rin Hatch, and Tom Coburn pro­duced a com­pre­hens­ive health care plan. It would have ini­tially capped the em­ploy­er ex­clu­sion, as it’s called, at 65 per­cent of the “av­er­age (health) plan’s costs.”

That would have meant a huge tax in­crease for a lot of Amer­ic­ans — hun­dreds of bil­lions of dol­lars com­bined, by some es­tim­ates. That at­trac­ted crit­ic­al press cov­er­age, which led to the sen­at­ors quietly re­vis­ing their plan to cap the ex­clu­sion at the av­er­age cost of an “ex­pens­ive high-op­tion plan,” sig­ni­fic­antly re­du­cing the im­pact — and there­fore polit­ic­al risk. But that is in­dic­at­ive of the tricky ter­rain that the 2016 can­did­ates will be nav­ig­at­ing.

What does the safety net look like?

Re­peal­ing Obama­care means scrap­ping its Medi­caid ex­pan­sion and tax sub­sidies, both of which have helped mil­lions of poorer Amer­ic­ans pur­chase private in­sur­ance. Which leaves the ques­tion of how you provide some kind of safety net for that pop­u­la­tion, which has his­tor­ic­ally been less likely to be in­sured and most at risk of med­ic­al bank­ruptcy.

Block-grant­ing Medi­caid — send­ing states a set amount of fed­er­al dol­lars and then giv­ing them sub­stan­tial free­dom in what they do with it — is be­loved by con­ser­vat­ives. Sen. Ted Cruz called it one of the things Re­pub­lic­ans “gen­er­ally agree about when it comes to health care re­form.” But they usu­ally step over the stick­i­er ques­tions of how you hold states ac­count­able for what they do and pre­vent them from throw­ing mil­lions off Medi­caid rolls.

(RE­LATED: Sup­port for the Af­ford­able Care Act Breaks Down Along Ra­cial Lines)

Then there is also the pos­sib­il­ity of con­tinu­ing some kind of tax cred­it to help people buy private in­sur­ance. Rep. Paul Ry­an and oth­er House lead­ers pro­posed do­ing so in their post-King v. Bur­well con­tin­gency plan. The Burr-Hatch-Coburn plan would also have kept a tax cred­it. “That’s where the ac­tion is,” Roy said. Con­ser­vat­ives dis­agree on wheth­er to have a flat-tax cred­it or to means-test it, giv­ing a more gen­er­ous cred­it to lower-in­come people as Obama­care did.

Former Flor­ida Gov. Jeb Bush has hin­ted at a third path re­cently: some kind of gov­ern­ment-sup­por­ted cata­stroph­ic cov­er­age. “The ef­fort by the state, by the gov­ern­ment, ought to be to try to cre­ate cata­stroph­ic cov­er­age,” he said in Iowa, “where there is re­lief for fam­il­ies in our coun­try, where if you have a hard­ship that goes way bey­ond your means of pay­ing for it, the gov­ern­ment is there or an en­tity is there to help you deal with that.

What about small busi­nesses?

The fi­nal piece of the puzzle is how Re­pub­lic­ans would help small busi­nesses and their em­ploy­ees ac­cess health in­sur­ance.

Obama­care is sup­posed to cre­ate spe­cial mar­ket­places for small busi­nesses to, as a group, get a bet­ter deal on health plans. The can­did­ates will have to fig­ure out what they would do in­stead.

There are gen­er­ally two com­pet­ing ideas on the right: One is let­ting small busi­nesses pool to­geth­er and shop for in­sur­ance as a unit, not un­like the Obama­care mar­ket­places. An­oth­er is giv­ing them some kind of spe­cial tax cred­it. Wis­con­sin Gov. Scott Walk­er ar­gued in 2010 that elim­in­at­ing a tax on health sav­ings ac­counts and thereby ex­pand­ing ac­cess to them would en­cour­age small busi­nesses to of­fer health in­sur­ance — though he earned a “Mostly False” from Poli­ti­Fact when the news or­gan­iz­a­tion con­sul­ted policy ex­perts about that claim.

Caitlin Owens contributed to this article.
What We're Following See More »
PENTAGON CONFIRMS WHITE HOUSE STATEMENT
More Chemical Weapons Activity Spotted at Syrian Base
50 minutes ago
THE LATEST

"The Pentagon said Tuesday the United States has seen chemical weapons activity at Syrian air base used in past chemical attack." A Pentagon spokesman confirmed what the White House first said Monday night: that "Bashar Assad appears to be taking some of the same actions he took before a chemical weapons attack on his own people in April."

Source:
TO BE MADE PUBLIC ON AUG. 9
Ethics Committee Looking into Conyers, Lujan
3 hours ago
THE DETAILS

"The House Ethics Committee acknowledged Monday it is investigating Reps. Ben Ray Luján, John Conyers and House staffer Michael Collins. The panel did not disclose details of its inquiry. Since the probe was referred to the House committee by the Office of Congressional Ethics, details of the OCE’s reports are expected to be made public August 9."

Source:
THREE WEEKS AFTER ANNOUNCING ON TWITTER
Wray Formally Nominated to Head FBI
3 hours ago
THE LATEST
MCCONNELL’S BACK AGAINST THE WALL
Heller, Paul Won’t Vote on Motion to Proceed
17 hours ago
THE LATEST
LESS THAN HOUSE BILL
CBO Says 22 Million More Would Be UNinsured
19 hours ago
THE DETAILS

The Senate bill "would increase the number of people without health insurance by 22 million by 2026, a figure that is only slightly lower than the 23 million more uninsured that the House version would create. Next year, 15 million more people would be uninsured compared with current law...The legislation would decrease federal deficits by a total of $321 billion over a decade."

Source:
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login