Reviving Repeal and Replace The GOP is running out of time as insurance markets deteriorate.
https://www.wsj.com/articles/reviving-repeal-and-replace-1491768248
Republicans left Washington on Friday without a health-care deal, despite renewed negotiations after last month’s fiasco and a burst of White House diplomacy. Perhaps the two-week recess will be a cooling-off period and we hope the House’s factions can agree on a deal. If they can’t, then at least we’ll learn who’s responsible for defeat.
After the Freedom Caucus killed the original health bill in March, the talks resumed, not least for practical and political imperatives. President Trump and Republicans campaigned on repeal and replace, and the President at least wants to keep his word. The ObamaCare exchanges are also fragile and precarious, and consumers harmed by rising premiums and declining choices are likely to blame the party in power.
But the divide between conservatives and centrists hasn’t narrowed. Last week, in part to create the appearance of progress, the House added an amendment on “invisible risk sharing” that would help bring down premiums by absorbing high-cost patients. The compromise was worked out by the Freedom Caucus’s David Schweikert of Arizona and Tom MacArthur of New Jersey, who is more moderate.
One reason is that this fight is largely pointless. True, the House bill doesn’t repeal the “community rating” that limits how much premiums can vary among consumers, but it does relax it enough to be effective repeal. Under ObamaCare, the costliest plan can be no more than three times as expensive as the cheapest, known as a 3 to 1 rating band. The House bill moves to a 5 to 1 band, which is above the true cost of care.
Average health spending among 64-year-old people is about 4.8 times as high as spending among 21-year-olds, according to the Society of Actuaries. The highest estimate of how much premiums varied before ObamaCare is 6 to 1, according to a liberal Georgetown outlet. So however you slice it, a 5 to 1 band is an improvement.
Meanwhile, Health and Human Services Secretary Tom Price already possesses the legal waiver authority to return regulatory power to the states whose Governors want to experiment with ObamaCare alternatives. Better to encode these changes in law because there will be another Democratic President, but successful policies are hard to take back.
The fury over such small differences suggests that some Freedom Caucus opposition is more cynical than sincere. Do its members want to appear to negotiate in good faith but insist on changes that centrists can’t accept, so they can then accuse centrists of killing the reform revival? It wouldn’t be the first time.
Republicans don’t have much time left to act and the policy uncertainty will soon influence business decisions and insurance markets. Insurers are designing and pricing their 2018 products for state approval in June and July. ObamaCare is a money pit for most of the industry, and insurers may decide to cut their losses and depart. These decisions tend to happen in a quick cascade.
For a preview, look to Iowa. Wellmark Blue Cross Blue Shield, the state’s largest insurer, recently withdrew from the individual insurance market after losing about $90 million over three years. Aetna followed. These exits mean that only five of Iowa’s 99 counties in 2018 will be served by two insurers, Medica and Gundersen. The other 94 will have the choice of Medica or nothing, and even Medica says it “needs to carefully consider its options” in Iowa and may quit too.
Republicans can blame ObamaCare and Democrats for this debacle, and they’re right on the policy merits. But as a political matter they’re in charge and have the power to do something. The default liberal response to ObamaCare’s implosion will be to open Medicaid to everyone who can’t buy coverage at any price because no one will sell it. Republicans will have no answer except a bill they’ve shown they don’t have the votes to pass.
House leaders say they’ll recall their members from the recess if the votes emerge to pass a bill, and perhaps there’s still hope for health-care reform. But first Republicans have to decide if they can accept progress that is short of perfection. If they can’t, then they’ll blow their best, and maybe only, shot at repealing and replacing a failing entitlement. And maybe lose their majority in 2018.
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