After Repeal

It’s the opportunity Republicans have been awaiting for six years, which invites the obvious question: Are they going to screw it up? In January, a united Republican Congress and Republican White House will finally have the ability to dispose of Obamacare, the unpopular and destructive health-insurance law. After running four straight national elections against the jammed-through, unconstitutional, failing, expensive, and disastrous Patient Protection and Affordable Care Act, the GOP finally has the power to do something about it.

It didn’t take long for Republican leadership in both houses of Congress to get over the shock of winning the election last month and start gaming out a repeal plan. The details remain under discussion, but House speaker Paul Ryan, Senate majority leader Mitch McConnell, and Vice President-elect Mike Pence (who is working closely with Ryan and McConnell on repeal) are already coalescing around a rough legislative framework. The plan might be summed up as: repeal, delay, replace. More precisely, Republicans plan to repeal most of the law, delay the implementation of most of that repeal for at least two years—and figure out what to replace it with in the interim.

It’s a legislative strategy adopted largely from the Heritage Foundation’s recommendations. The think tank’s health care experts Nina Owcharenko and Edmund F. Haislmaier authored a brief in November that advocated a four-step process that begins: “Maximize the reconciliation process for repeal.” According to Mitch McConnell, this will come in the form of an “Obamacare repeal resolution” on January 3, the first day of the new Congress.

Why start here and not a straightforward repeal bill? While such a repeal could pass the House of Representatives with a party-line vote, the small majority Republicans hold in the Senate (likely 52 to the Democrats’ 48) means there’s no supermajority of 60 to override an almost-certain Democratic filibuster. So the GOP plans to repeal Obamacare the same way Democrats passed it: through budget reconciliation, because Senate rules limit debate (and thereby avoid the filibuster threat) on budget legislation.

This process, however, also limits what Republicans can repeal. Obamacare’s taxes and penalties (which are the muscle behind the individual and employer mandates), Medicaid expansion funds, subsidies for health-insurance exchange customers, and taxes on the health care industry are all on the reconciliation chopping block. Dumping all of this would effectively cripple the law’s enforcement, even if the statute itself remains on the books. It will be up to the administration to undo the regulatory regime of Obamacare in the executive branch.

This is hardly a new plan. Shortly after taking control of the Senate in 2015, Republicans in both houses passed a nearly identical budget reconciliation bill, but President Obama vetoed it. President Trump, almost certainly, would not.

But what comes next is less certain. With 2017 insurance plans kicking in on January 1, immediate implementation of any kind of repeal would be far too disruptive. Republicans on Capitol Hill are debating how long—two years? three?—before the subsidies and mandates are removed. As Heritage Action, the think tank’s political arm, put it in a recent memo: The “preferred process gives Republicans the best chance to repeal Obamacare and honor their commitment to the people who put them in power—while providing plenty of time to enact a replacement plan. Then there will be a time of transition for Congress to pass a replacement bill.”

Senate majority whip John Cornyn sees it this way as well. “It took six years to get into this mess; it’s going to take us a while to get out of it,” he told Politico.

This is exactly what the American Enterprise Institute’s James Capretta, a leading conservative health care policy expert, has feared. Capretta spent years researching and documenting Obamacare’s legion of pitfalls and distortions of the health-insurance marketplace. He’s worked with other experts to develop free-market solutions, not only to the problems that have emerged since Obamacare’s passage and implementation, but also to what he calls the “pre-ACA status quo.” He’s also thought a bit about the politics of repeal.

“I’m all for the notion of strike while you’ve got momentum, and the political momentum is at your back,” Capretta says. That momentum could very well stall over the next two years as Republicans expend political capital and approach the midterm elections in 2018. What GOP leadership views as time to hammer out a replacement proposal Capretta sees as time for Republican divisions over health care policy to grow.

“A better legislative game plan would be to wait until the incoming Trump administration submits its budget framework, probably a month or so after the inauguration, and then to proceed with a budget resolution and reconciliation bill in Congress that carries much of the reform agenda that Congress and the administration would like to enact,” Capretta wrote in a post for Real Clear Health last month. The several competing alternatives to Obamacare—from Orrin Hatch’s proposal in the Senate, to Tom Price’s in the House, to Speaker Ryan’s “Better Way” proposal—all have similar but different approaches to, say, replacing the subsidies for health insurance or covering individuals with preexisting conditions.

“You better work out those fights now,” says Capretta, before getting rid of Obamacare’s funding and spending mechanisms. Otherwise, Republicans could find themselves in 2018 with a major disruption and no consensus for how to address it—ironically giving Democrats the same political bludgeon Republicans used against them during the Obama years.

While Capretta has spoken to Ryan’s staff about strategy, all indications are that repeal-delay-replace is the favored path. The only vocal resistance to it in the Republican conference has come from the House Freedom Caucus, whose newly elected chairman Mark Meadows has expressed opposition to any legislation that doesn’t repeal and replace Obamacare immediately.

Ryan recently told 60 Minutes repeal will be the “first bill we’re going to be working on” but sounded hopeful that the GOP would find its replacement plan eventually. “We want to make sure that we have a good transition period, so that people can get better coverage at a better price,” Ryan said. If for nothing else than his party’s well-being, the speaker better hope so.

Michael Warren is online editor of The Weekly Standard.

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