Very soon, the Supreme Court could upend U.S. healthcare. A decision in King v. Burwell is expected by the end of June; five sloppy words in a giant sloppy law could turn Obamacare into Obamabust. What then?
In that event, healthcare will emerge as a defining issue in the 2016 election. Assuming Hillary Clinton is the Democratic candidate, her failure to develop a national insurance program in 1992 and her secretive missteps along the way, will again grab the nation’s spotlight. At the same time, voters will demand that Republicans outline an alternative to the Affordable Care Act. By 2017, for example, Obamacare could be replaced by Rubiocare.
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As unimaginable as it may seem, the Supreme Court could decide that Obamacare’s authors meant what they said – that participants only in those states that set up their own exchanges were entitled to subsidies for health insurance they were required to buy but unable to afford. (The policy trackers at renowned Wall Street research firm Evercore ISI, for instance, says a ruling against the White House is “likelier than not” but also a “very close case.”)
There are 37 states that did not establish such exchanges; in most of those states the federal government provided the insurance marketplaces instead. There are approximately 6.4 million Americans at risk of losing subsidies they receive on those federal exchanges.
Chief Justice John Roberts could again cast the deciding vote in this challenge; the last time round he saved Obamacare by calling the individual mandate a tax, and declaring it legal. This time, Roberts might well calculate that this monstrous law needs an overhaul.
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Republicans have already begun to craft a response to such a decision. Politically, they need to protect the 6.4 million vulnerable to losing their insurance while at the same time destroying the most heinous aspects of Obamacare. Senator Ron Johnson of Wisconsin has made a good start. His Preserving Freedom and Choice in Health Care Act essentially keeps the current system of subsidies in place until August 2017, beyond the election and far enough out to allow for a thoughtful rewrite by Congress.
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It revokes the individual and the employer mandates as well as the one-size-fits-all policies that require 50 year-old men to have pregnancy coverage. Johnson modestly describes the proposal as “transitional,” creating minimal disruption while a new healthcare bill is written. Some 30 Republican senators, including Majority Leader Mitch McConnell favor of the bill.
This seems like an excellent beginning, but does not let GOP candidates off the hook. If they are going to eviscerate the president’s program, they will need an appealing alternative. Little by little, the popularity of Obamacare has grown; in April, for the first time, more people viewed the legislation favorably than unfavorably.
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After all, the rise in healthcare costs has moderated. Some of the slowing has been the result of the recession, to be sure – as much as 77 percent according to some studies. But there have been other cost containment measures that have also borne fruit, such as a move away from “fee-for-service” billing, which rewarded doctors for extra visits and procedures and towards “outcome-related” compensation. For instance, hospitals have been penalized for re-admissions, a sign of poor care; consequently, some 150,000 fewer Medicare patients were readmitted in 2013, according to The Economist.
Also, billing by medical providers has become somewhat more transparent, allowing consumers to compare costs. While these elements are popular, a majority still opposes the individual mandate, and wants to see the bill revised. If proposed huge increases in premiums start sifting through next year, the bill’s popularity will again take a hit.
Republicans need a plan, based on common-sense market-driven guidelines.
What should those principles be? Here are some ideas:
1) All Americans, living in the richest country on earth, should have access to healthcare.
2) Do away with the individual mandate, and the employer mandate. Require that insurance be portable, and give individuals the same tax breaks as companies. A high-risk federally subsidized catastrophe pool should be available for uninsured individuals who face sudden dire illness. High earners would not be eligible, thus undermining the opportunity for young people who can afford insurance to roll the dice.
3) Allow insurers to compete across state lines, something that even Obamacare-loving Democrats back. Competition would drive down prices, making insurance more affordable. Don’t believe it? Tired of the Geico gecko?
4) Make sure that the system is set up so that patients have “skin in the game.” Our medical system is expensive in part because many of us lucky enough to have employer-provided insurance don’t pay much towards our care. As a result, we gladly undergo marginally beneficial tests and procedures – treatments that we might resist if we had to pay for them. Progress is visible in this arena, but we have farther to go.
5) Focus on holding down costs. That was supposed to be the chief objective of the Affordable Care Act. Allow the private sector to play a bigger role. Wal-Mart has driven down the cost of nearly everything Americans consume – let’s see what a roll-out of their walk-in clinics can accomplish for healthcare.
6) Continue reforming Medicare and Medicaid so as to encourage productivity.
7) Get moving on tort reform.
8) Require insurers to allow children to stay on their parents’ insurance until age 26. This has been popular; there is no reason to change it.
9) Get rid of any requirements that stifle job creation. That was, and remains, exactly the wrong direction for this country.
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There are other ideas out there – giving small companies the opportunity to operate as a group, to exact better premium prices, or health savings accounts, that should be explored. Many have been proposed by doctors serving in Congress; they may actually know what they are talking about.
Here is what Republicans must not do: use an overhaul of Obamacare as an opportunity to push a controversial social agenda. For example, women must have access to birth control, period.
There is a great opportunity here – not just for the GOP, but for the nation. For all the upset and economic drag perpetrated by Obamacare, we still have 30 million Americans without insurance. Surely Republicans can do better.
(Updated to identify Ron Johnson as Senator from Wisconsin, not Wyoming.)
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