Plan of attack

The ACA: A conservative plan of attack

Step one, we need to accept it’s here. Here’s what needs to happen next.

By Tom Miller

More than six years of efforts by Republican and other right-of-center opponents to repeal, replace, or substantially reshape Obamacare have fallen short. Despite years of heated political rhetoric, dozens of symbolic votes in Congress, and a few near-misses in the courts, the troubled health care program evokes the old Timex watch slogan: “It takes a licking but keeps on ticking.” The strategic options ahead for Obamacare critics on the right are:

•Rinse and repeat: more of the same
•Gamble on a more ambitious long-shot strategy
•Adapt tactically in the near term, to minimize future damage

Most will bet on “repeat,” mostly out of habit. A few might dream of what they could win with a bold gamble. Realists, however, should hope for “adapt.”

For Republicans, fighting Obamacare worked as a campaign tactic in 2010 and 2014. But other than pushing the Obama administration to make a few tweaks in implementation, it has not changed the law itself.

House Republicans released their latest plan – “A Better Way” – to repeal and replace the Affordable Care Act last month. It blends all three of the strategies above, but its lite brew for reform remarkably manages to be both too cautious and too unrealistic all at once. In the lingo of vintage ad slogans, “It tastes odd, and is less filling.”

A Better Way for health reform is a placeholder; it’s not actual legislation with the discipline of budgetary scoring and administrative feasibility. It straddles the tough health reform conflicts among Hill Republicans, defering and delegating many of them to state officials. It simply assumes away the immense political and administrative hurdles blocking the path toward any new major health policy legislation. Most of all, political climate change is working against their plans.

Health policy, particularly opposition to Obamacare, has lost intensity and salience as a top-tier issue in this year’s election season. One presumptive presidential nominee, Donald Trump, (?-NY), has invested little time and even less thought in the topic. Conservative concerns about the health law’s harm to the federal budget, and health spending levels, resonate far less after several years of lower deficits and relatively modest annual growth of health care costs. Obamacare remains unpopular, but repeal alone has become a less-favored option over time. Today, a good bit of the opposition comes from the single-payer left, not just the small-government right.

Moreover, since coverage expansion got underway in 2014, Obamacare has moved from unimplemented conjecture to operational reality. Its roots go deep into the health care system. Health care businesses remain economically invested and politically co-dependent as the health law staggers ahead. The Obama administration had to pull some regulatory and administrative punches along the way, but the underlying law still offers abundant opportunity to exploit centralized power over health care in the years ahead.

Having failed to dislodge Obamacare legislatively or through the courts, opponents are reduced to pointing to its latest round of problems (e.g., rising premiums, limited enrollment growth, and administrative snafus) and hoping for even more of them. But rooting for failure alone has not caused the law to implode – nor does it offer a more appealing alternative. Handing complex tradeoffs and transitional headaches to friendlier state governments and the hypothetical miracles of the marketplace looks more like a buck-passing gesture than a tangible replacement option. In the meantime, Obamacare stumbles along, hoping that the Nietzschean motto (“that which does not kill me makes me stronger”) holds true. In the political universe, inertia remains the most powerful force.

Those of us who want genuine and substantive change in the ACA need broader constituencies that move beyond criticizing, correcting, and constraining Obamacare’s implementation and expansion. One clear goal should be to connect consumers more directly with the financial assistance they need --and their fellow taxpayers can afford – with the bare minimum of bureaucratic and regulatory filters, even at the state level. Another new objective for Obamacare critics should involve finding less-bureaucratic ways of pushing the health system to deliver better quality care at lower cost, while also facilitating the production and distribution of cost and value information that real patients, practitioners, and payers actually can use. But unless health insurance purchasers can see a reason to engage in such arrangements (hint: more affordable care, better value, improved health, and even the reality of more patient-centered care), they are more likely to fight for crumbs from the table of the ACA devil they know than hunger for less-filling aspirational rhetoric elsewhere. The harder political sell involves redefining both the problems and solutions. It means persuading enough voters that many of them will still have to pay more, or invest in other ways, for better health, but it’s worth the price.

House Speaker Paul Ryan (R-WI) has tried to frame the next set of health policy choices as improved quality (through more patient options) versus increased quantity (larger subsidies only for more of the health care allowed by political intermediaries and bureaucratic administrators). However, the House Republican plan cannot make up its mind whether or when it wants to challenge the underpinnings of employer-based insurance (which is how most Americans under age 65 still get covered), or whether it wants to reassure current seniors on Medicare that nothing will change, even if that means delaying Medicare reforms it insists are urgent. The House also has a faith-based belief in state officials’ policy judgment and ability to execute high levels of innovation. (Actual evidence is spotty.) Mostly the House approach would move somewhat smaller amounts of taxpayer dollars from some ACA-favored beneficiaries to other ones, and hope for better results.

While waiting to develop a more compelling vision of their health-policy future, ACA opponents will have to be savvier in how they cooperate and compete with the law’s proponents. Pointing derisively to periodic train wrecks doesn’t aid the casualties. Nor does it clear the tracks for smoother and safer rides. Opponents have to deal with the practical consequences if they want to change the law.

Many aspects of Obamacare certainly remain problematic and prone to creating new political counter-pressures. The inherent contradictions and complexities within the ACA itself impose a ceiling on its aspirations and achievements. For example, enrollment in the exchanges in the first three years underperformed -- and plateaued. Extremely generous subsidies for coverage can only be stretched so far up the income ladder, to disguise larger hikes in the underlying costs of government-mandated benefits for a high-risk cohort of enrollees. Immediately over the horizon is the end of several ACA mechanisms -- risk corridor and reinsurance payments -- that allowed some insurers to initially offer lower teaser rates to attract market share. Further down the political road is the backlash of resentment from other moderate-income workers who do not benefit as much, if at all, from the ACA's highly redistributive subsidies and would prefer to see them spread more widely. Even the massive expansion of Medicaid faces a negative feedback loop between the low amounts it pays doctors, restricted access for patients, poor quality of care, and fiscal sustainability.

So the nearer-term tactical challenges involve how Obamacare will deal with its inherent limits to growth. Depending on the balance of power after the 2016 elections, various political tradeoffs will appear on the health bargaining table. (Don’t worry, Donald: The art of these deals won’t yet involve any potential relocation of jobs offshore to Mexico and China!)

In a world of greater Democratic dominance post-2016—control of the White House, as well as the Senate—ACA opponents will have to cut less favorable deals, though they will still be positioned to slow any rollout of even more government control over health care. Republicans will offer ways to maintain the appearance of a private-sector face on more highly regulated but, inevitably, less-heavily-subsidized health care arrangements. The political role of the health care industry primarily will be to stay in business despite mounting burdens, so it can take the blame and deflect it from political officeholders. One might expect more red-state adoptions of Medicaid expansion in return for cosmetic conservative bumps like requiring beneficiaries to pay something toward their care, and to face soft work-search incentives. Perhaps some of the out-of-pocket spending in ACA exchange-based coverage and traditional Medicare will be addressed, but fiscal constraints will either limit that exercise or undermine it through lower provider reimbursements and more restricted networks.

Yet regardless of which set of political partisans gains the upper hand, several areas of policy convergence remain likely. Medicare Advantage will grow, not shrink, as these private health insurance plans for the elderly provide a safer harbor for physicians unable to cope with the complexities of MACRA – a new payment and quality system beginning a few years from now in traditional fee-for-service Medicare. . Almost all remaining states struggling with running their own ACA health insurance exchanges will shift to the federal version, HealthCare.gov. Coverage of the upper-income slice of the Medicaid expansion population will begin to merge with the lowest-income people covered in the exchanges (somewhere above the poverty line but well below twice that level); we just don’t y­et know in which direction and form.

Both Republicans and Democrats will agree to delay further the “Cadillac tax” on high-cost employer-sponsored health plans, which Congress already has postponed until at least 2020. Moreover, neither party can afford to regulate and burden employer plans to the point that it accelerates the erosion of most employer-based coverage. Both parties will find it easier to criticize private-sector providers for higher health care costs than to reexamine how government policies drive them up. But they might manage to agree on how to expand the supply of less-costly health care by liberalizing scope of practice rules and other licensing barriers to entry – i.e. making more and better use of providers who are not physicians (such as nurse practitioners) and reducing certificate-of-need regulatory barriers to health care competition.

The more potentially creative area involves how Republicans in control of Congress might reach deals with President Hillary Clinton, or even a far-less-predictable President Trump. Efforts to open more market-oriented escape routes from the ACA would likely focus initially on expansion of Section 1332 waivers (which let states try to create their own limited alternatives to parts of Obamacare), more flexibility in Medicaid for states, fewer restrictions on tax-preferred health savings account contributions, and flattening some of the progressive spikes in the ACA’s income-based subsidies. But the more strategic asks and heavier lifts would push for removing as many regulatory barriers as possible to maximize choice in health care. The best Republican mantra could become: “You’ll still get your subsidies (more or less), but we won’t micromanage how you spend them.”

The Obama administration has a lengthy record of playing fast and loose with the law in how it has interpreted and implemented provisions of the ACA (e.g, delaying or rewriting provisions like the individual and employer mandates; paying for cost sharing, risk corridors, and reinsurance without congressional approval; changing previous interpretations of the law as becomes political necessary). A new administration looking to reform Obamacare could help to establish more regulatory stability and accountability by adhering more to traditional norms of administrative law and practice. But the political temptation remains great to just do the opposite: Instead of asking Congress to change the law, just bypass political gridlock and settle old scores more quickly by administrative means.

In American health care politics, the default option is always to spend more of other people’s money, at least until the cash or credit runs short. Then, the political debate revolves around which set of victims or villains is more at fault – power-hungry bureaucrats, greedy private-sector intermediaries, or hapless consumers. Whichever side can redirect and unite two of those sectors against the remaining one will hold the more dominant high ground.

In short, Obamacare managed to survive its early existential threats in the courts, at the ballot box, and between the grinding gears of administrative implementation. But its future growth remains stunted and misshapen. Lifting it beyond the level of mere existence will require more choices, compromises, and commitments to find a new political road map, leading somewhere other than the dead ends of “no exit” or “only my way.”