Repeal Without Replace Is a Terrible Idea

Repeal Without Replace Is a Terrible Idea
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The GOP Congress and incoming Trump administration will need to make some decisions in the coming weeks on how to proceed with a legislative agenda in 2017. The course they choose to take is likely to define the rest of the Trump presidency, just as decisions President-elect Obama made in late 2008 and early 2009 -- to do a large stimulus bill first, followed by a sweeping health care law, and then Dodd-Frank -- came to define his presidency.

Based on press reports, it seems the GOP is about to choose a path that will haunt them for years to come.

Candidate Trump and many in the GOP campaigned hard against the Affordable Care Act (ACA), and they won. So it is understandable that they now believe they should move quickly to back up what they said on the campaign trail with action in Congress.

But the truth is, they campaigned on “repeal and replace,” not “repeal.” There’s a reason for that. The ACA is full of problems, but the pre-ACA status quo was unsatisfactory too. Costs were high, and millions of people paid exorbitant premiums for coverage through no fault of their own. Moreover, the ACA has unquestionably expanded enrollment in health insurance. That’s a good thing, even if the way the ACA achieved the coverage expansion relied too much on public insurance (Medicaid), coercion, and government micromanagement. Instead of seeing the current moment as an opportunity to enact the right kind of reform to achieve an even better result than the ACA, Republicans in Congress seem determined to pass, as quickly as they can in January, a partial, repeal-only bill that guts the ACA without putting anything else in its place. To protect themselves politically, they would delay the repeal of key spending provisions of the ACA -- particularly the expansion of the Medicaid program and the subsidies for health insurance enrollment for households getting coverage through the law’s exchanges – for perhaps two years and say that they want to work with Democrats in Congress to come up with a bipartisan replacement plan before the money gets turned off.

This is a terrible idea.

For starters, Republicans will not have nearly as much political momentum in two years as they do right now. The voters have given them a once-in-a-generation opportunity to make big changes, but the window of opportunity will rapidly close as 2017 winds down. By the time 2018 rolls around, the mid-term elections will loom, and both House and Senate members will become even more risk averse than they are right now. It defies logic and historical experience to expect the GOP will get a better replacement plan through Congress in 2018 than it could get in 2017 if it tried. 

Moreover, why should Democrats cooperate in replacing the ACA at all if this is how the GOP proceeds? The spending that is associated with expanded enrollment in insurance wouldn’t expire until perhaps 2019. Why wouldn’t Democrats just wait until late 2018 and then demand that Republicans extend the subsidies another year to avoid massive disruption in insurance when the subsidies are cut off? This tactic has worked many times in other contexts and almost certainly would work to force the GOP to capitulate. The fallout would be extensive. Many Republicans would refuse to vote for such an extension, but GOP leaders would be forced to support it and side with Democrats to avoid a political disaster as an election loomed.

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. It could include tax reforms, repeal and replacement of the ACA, changes in spending programs, and a fiscal framework that ensures some level of discipline in the coming years. Putting much of the agenda into this kind of legislation would ensure it would be viewed as “must pass” by all House and Senate Republicans, which would give it substantial momentum.

The GOP would be smart to try and secure some level of bipartisan support for this agenda too. As a reconciliation bill, the legislation could pass in the Senate with a simple majority vote. But Democrats would know it was going to pass too, and some may be inclined to support it under certain conditions. The GOP should do whatever is necessary to bring some willing Senate Democrats on board with the legislation; bipartisan support for the bill would defuse much of the criticism that will come from liberal opponents and increase the chances that whatever is passed will last and not be reversed. 

Republicans are now in the position to govern, which means making tough decisions. There are some House and Senate Republicans who would like to vote to repeal the ACA but who are wary of the political risks associated with supporting any kind of credible replacement plan. They need to be told that it is no longer possible for the GOP to avoid having a replacement plan that will actually work, as assessed by the Congressional Budget Office and other credible observers. They will be governing the country, with control of the House and Senate. If they can’t come up with a sensible plan for health care now, when will they?

Fortunately, the starting point for what the GOP should do in an ACA replacement plan has already been released. Speaker Paul Ryan and some of his colleagues in the House unveiled their blueprint for reform in June. That plan has as a central feature the provision of a tax credit to households without access to employer coverage, and rules to protect people with pre-existing conditions who stay continuously insured. It is a plan that ensures all Americans can get affordable health insurance, protecting them against major medical expenses, if they want it. There is no avoiding all political controversy in health care policy; there will of course be political attacks on House and Senate members who support Ryan’s plan. But the time for excuses is over. The GOP has no choice but to move forward with a serious plan, starting right now. 

If instead, the GOP sticks with a repeal-only bill, there is a high probability that they will never get around to agreeing on a workable replacement plan. At which point the odds would then favor retention of the ACA, or something close to it, as the only viable way forward. That would be an ironic outcome of this election, to say the least. 

James C. Capretta is a resident fellow and holds the Milton Friedman chair at the American Enterprise Institute.

 

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