Republicans, Here’s Your Way Out Of the Obamacare Vise

Bill Scher

The Republicans are in a jam. For the last six years, they’ve pledged to repeal Obamacare, but haven’t figured out a plan for replacing it. They are ideologically opposed to government involvement, but they know that taking away the health insurance of 20 million people is politically disastrous. They rail against high premiums, but they know taking away the individual mandate — and taking out younger, healthier customers from the risk pool — would only make premiums go even higher.

But there is a way out. It requires Republicans to prioritize maintaining political power over sticking with ideological principles. But after swallowing Trump on trade, Russia and politically pressuring individual corporations, that should not be a problem.

The solution is three-fold. One, encourage holdout Republican governors to expand Medicaid. Two, increase Obamacare subsidies. Three, call it Trumpcare.

Why would Republicans ever swerve left to improve Obamacare? First and foremost, it would directly benefit Trump voters. Second, Obama, once out of office, can no longer politically benefit; there’s no reason to withhold health care out of spite. Three, Trump would accept it — deep down, he’s always been a single-payer guy.

Nineteen states have refused to take the Obamacare deal of expanding Medicaid coverage to the working poor at almost no cost to the states. Nearly all those states have Republican governors (two now have Democratic governors with Republican legislatures.) Because of their resistance, 2.6 million adults still lack insurance, and full expansion would make a total of 4.5 million Medicaid eligible.

But the overall uninsured population is much larger: 28.5 million (roughly 6 million of that are not citizens). And the biggest reason why people don’t have insurance is that they earn too much money to qualify for subsidies yet still can’t afford the cost. Plus, many who do have insurance through Obamacare feel it’s not robust enough. Obvious solution: more subsidies.

Recent focus groups with Trump voters who are covered by Obamacare marketplace insurance or by Medicaid revealed that those dissatisfied want more government help, not less. Drew Altman, of the Kaiser Family Foundation which led the focus groups, explained in a New York Times oped:

They spoke anxiously about rising premiums, deductibles, copays and drug costs … Those with marketplace insurance — for which they were eligible for subsidies — saw Medicaid as a much better deal than their insurance and were resentful that people with incomes lower than theirs could get it … asked about policies found in several Republican plans to replace the Affordable Care Act — including a tax credit to help defray the cost of premiums, a tax-preferred savings account and a large deductible typical of catastrophic coverage — several of these Trump voters recoiled, calling such proposals “not insurance at all.”

If there’s one concept that a populist carnival barker like Trump should understands is “give the people what they want.” What they want is for the government to cover their health care costs.

And they expect Trump to deliver. Altman noted:

They were also worried about what they called “chaos” if there was a gap between repealing and replacing Obamacare. But most did not think that, as one participant put it, “a smart businessman like Trump would let that happen.”

Is Trump smart enough to know that he can just build on what works? Doesn’t appear so. He’s operating on the presumption that Obamacare is a ticking time bomb that needs to be overhauled immediately. He said in his press conference, “’17 is going to be the bad year. It’s going to be catastrophic. Frankly, we could sit back — and it was a thought from a political standpoint — but it wouldn’t be fair to the people.”

Outside of the right-wing bubble, that’s not the case at all. As CNBC reported last month:

…health insurers are expected in 2016 “to start reversing” financial losses on their Obamacare business after “hitting bottom” in 2015.

And 2017 “will likely see continued improvement” for those insurers selling individual health plans, “with more insurers getting close to breakeven or better,” according to the report by Standard & Poor’s Global Ratings.

The report also says big price increases for Obamacare plans in 2017 were likely a “one-time pricing correction.”

And S&P said that while it expects insurers to ask for premium hikes for 2018, it also believes that “the average level of increase requested will be well below the 2017 hike” of 25 percent for a key type of Obamacare plans.

If Trump can escape the ideologically blinkered Republican universe and rediscover his inner single-payer liberalism, the way out of the Obamacare vise is obvious. If he can’t figure that out, and creates a massive unforced error by blowing up a health care reform program that’s working, then you’ll know he’s not a smart businessman after all.

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