Feb 3, 2017

The trouble with the piecemeal Obamacare replacement strategy

Caitlin Owens, author of Vitals


If the GOP follows through with its latest Obamacare repeal strategy — chopping up the replacement into a series of mini-bills — we may never know how health care costs and coverage under a new Republican plan compare to current law. That's because a true apples-to-apples comparison won't be possible that way, at least not for a long time.

"I think passing a replacement plan through multiple pieces could make it very hard to evaluate the effect on federal spending and the number of uninsured" compared to the Affordable Care Act, said Larry Levitt, a senior vice president at the Kaiser Family Foundation.

That's not the only issue with divvying the replacement up. The strategy relies on industry groups — particularly insurers — taking Republicans' word that the next pieces will all eventually get done. That's far from a given, especially if they can't get Democrats' help. Read on for more about the strategy and where it could break down.

Why piecemeal: Republicans don't have any better options. They need to move on Obamacare repeal, and fast, but they don't have a replacement plan put together. And even if they did, they don't have a way to pass it.

The problem: they may not be able to pass the whole series of smaller bills, either.

"Health care is interconnected. There's no one part of it that doesn't touch all the other parts. And so if you pass one bill, its success depends on passing the next bill," said Nick Bagley, a law professor at the University of Michigan who supports Obamacare. But there's no guarantee they can do that, Bagley said — and if they can't, it could cause a whole new set of problems in the health care markets.

In other words, if you divvy it up, "that doesn't mean the resulting Frankenstein will actually work."

The upside to all of this? People might actually have a better idea of what's going on with health care. "Smaller, separate bills can be debated focusing on only a couple of issues, instead of hundreds," which could make them easier to explain to the public, Chris Condeluci, a former GOP Finance Committee aide and a member of the Axios board of independent experts, told me. "I think it's a good idea."

The Republican strategy in three buckets: This is how a senior aide explained the current plan to me:

  • Put as much of a replacement as possible in the repeal bill Republicans plan to pass through a process called reconciliation. Right now, they're still figuring out which policies comply with Senate rules. They know some of the replacement can't be included.
  • Do some changes administratively, beginning as soon as Tom Price is confirmed.
  • Pass whatever is left legislatively. Part of this can be done without Democrats through a second reconciliation bill. But there's no way around needing Democrats at some point.

Three big things to think about:

  1. One comprehensive estimate of how the plan impacts costs and coverage may never emerge. While the individual pieces may eventually be added together, the budget baseline will keep changing over time. This could work either for or against Republicans, depending on estimates on individual bills. But some staffers privately acknowledge the GOP goal ultimately isn't to cover as many people as Obamacare, so not having that final number could help.
  2. Doing it this way could really turn off insurers. They've been talking all week about how much they need certainty if they're going to keep participating in exchanges, and how they want to see the GOP replacement. Doing a series of bills over time may not provide this certainty, although some Republicans say it may be enough just to send signals about the direction they're taking.
  3. Politically, this could explode. And not just because of Democrats' reluctance to come to the table. "When you have a big bill, you can get people to hold their nose" on the things they don't like, Bagley said. "With individual chop chop bills, you have to get your entire caucus." But on the other hand, if the process is incomplete, that may force Democrats to eventually come to the negotiating table.

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