October 14, 2015

Negotiating an End to the Obamacare Wars

October 2015 | Noam N. Levey | Online Exclusive

The advent of the 2016 presidential primary season has brought renewed calls from Republicans for complete repeal of the Affordable Care Act (ACA). As has been the case in the last 3 election cycles, full-throated attacks on “Obamacare” are de rigueur with the GOP base.

But the talk of ripping out the law, rolling it back, and rescuing Americans from government mandates has obscured a quiet evolution that has transformed the political landscape around health policy and presented an opportunity to move past the Obamacare wars.

As the law’s program for expanding coverage has taken hold, delivering health protections to millions of Americans, most Republican leaders have tacitly accepted that scrapping the law is unrealistic, even politically reckless. The most serious GOP alternatives—most notably the Patient CARE Act proposed by Senator Richard Burr (R-NC), Senate Finance Committee chairman Orrin Hatch (R-UT), and House Energy and Commerce chairman Fred Upton (R-MI)—now feature many of the same protections as the current law.1

Democratic presidential front-runner Hillary Rodham Clinton, meanwhile, has outlined a set of “fixes” for the ACA that she would make as president. This platform may provide a path for Democrats to reopen the health care debate without undercutting the law’s core architecture.

While these developments are unlikely to end the long political fight over health care between Democrats and Republicans, there may be an opportunity to negotiate a truce when a new president takes office, whatever his or her party.

Negotiators could build on a set of health policy principles that Democrats and Republicans share yet have often overlooked in the din of political battle. Here are just a few:

  1. Guaranteed coverage for all Americans, including those with preexisting medical conditions. This has long been a plank in Democratic platforms, is a core protection in the ACA, and now is a central feature of most of the conservative alternatives currently brewing in Washington and around the nation.
  2. A federal system for providing government aid to consumers who don’t get health benefits at work. The ACA provides tax subsidies that are tied to consumers’ income and the cost of health insurance policies; most Republican alternatives also envision some system of tax credits, though the aid is usually tied to consumers’ age.
  3. A mechanism for prodding all consumers to obtain insurance so that no one can game the system. The ACA has a tax penalty. Leading alternatives include a continuous coverage protection that would guarantee coverage to consumers who maintain coverage.
  4. Preservation of the existing system of employer-provided health coverage. This is embedded in the ACA and has now been embraced by most Republicans. No longer are GOP leaders calling for a full overhaul of the tax treatment of health benefits, which was a major plank in John McCain’s 2008 presidential campaign platform.
  5. Flexibility for states. This has been and remains a core tenet of conservative health policy. But it also has a foothold in the ACA through Section 1332, a provision that, starting in 2017, could give states broad authority to design alternative systems for expanding health coverage. Stuart M. Butler, a senior fellow at the Brookings Institution, has been a leading advocate for using this provision to pursue more right-leaning reforms at the state level.
  6. Delivery system reform. Both parties have embraced efforts to leverage Medicare’s market power to move away from fee-for-service medicine, most recently in the bipartisan Medicare Access and CHIP Reauthorization Act, which will replace the Sustainable Growth Rate formula. (In the spring, the law passed 392 to 37 in the House and 92 to 8 in the Senate.)
  7. Medicare provider cuts. Although these were once a favorite target for political attacks by Republicans, Medicare provider cuts, which are an important source of funding for the ACA, are no longer challenged in most GOP health proposals, such as the Patient CARE Act.
  8. A tax on high-cost health plans. Though highly unpopular with businesses and labor unions, some kind of new tax on health plans with particularly rich benefits has been backed by both parties as a means to control rising health spending. The ACA includes the so-called Cadillac tax, which is slated to go into effect in 2018. GOP alternatives feature slight variations to cap the now limitless deduction on employer-sponsored health coverage.

To be sure, important differences in the details of these shared health policy principles remain. Whether federal insurance subsidies are tied to income or to age, for example, affects not only the cost of the program but also the nature of the safety net. Disagreements over whether the federal government should mandate a basic set of insurance protections (as the ACA does) and over whether states should be able to limit Medicaid assistance (as many Republicans are calling for) will also be difficult to resolve.

Moreover, fundamental philosophical differences regarding the role of government almost certainly will continue to shadow the health care debate. Many opponents of the ACA maintain that any reconciliation with the law is impossible because it is built on the premise that more government regulation can best address the health care system’s problems. Conservatives, by contrast, believe the system’s ills stem from too much government intrusion.

These philosophical disagreements are real and deeply felt. But the notion that opposing worldviews preclude legislative compromise is belied by history. President Ronald Reagan, who took office famously proclaiming that “government is the problem,” and Tip O’Neill, the Democratic House Speaker who carried the torch of New Deal liberalism through the 1970s and 1980s, compromised on a series of tax reforms, even though the two men never agreed on the role that the federal government should play in Americans’ daily lives. More recently, in 1997 Democratic President Bill Clinton hammered out a compromise with congressional Republicans that created the State Children’s Health Insurance Program, a dramatic expansion of the government safety net that also gave states substantial flexibility and provided opportunities for the use of commercial health plans.

These kinds of deals did not require the two sides to come to any deep philosophical agreement, only to recognize that each of their policy agendas could be advanced with compromise.

Negotiators reviewing federal health policy in the future might start with a set of adjustments to the ACA that both parties could agree to relatively easily. For example, few lawmakers or policy experts on either side of the political aisle now see the employer mandate in the law as necessary. There are also few defenders of the current tax on health insurance plans, which was included in the ACA to help offset the cost of expanding health coverage. This tax, not to be confused with the even more unpopular Cadillac tax, clearly inflates premiums. Strategies favored by conservatives, such as expanding the use of tax-free accounts to offset consumers’ out-of-pocket medical costs or reforming medical malpractice, might become part of the negotiation.

Tougher topics such as the individual mandate might be tackled by revisiting alternative methods for encouraging consumers to get coverage, such as Medicare’s system of charging high premiums for late enrollees. The law’s federally mandated Essential Health Benefits, a frequent target of conservative ire, might be examined to see if states could be given more flexibility to set these standards, as they have done historically. Even Medicaid, a program that has deeply divided the parties over the years, may provide opportunities for compromise as Republican-led states pursue alternative coverage models like Arkansas’s “private option.”

Making any changes to the ACA will not be easy. The length and intensity of the fight over “Obamacare” are unprecedented in modern times. Feelings on both sides remain raw, and trust is low.

That said, there is plenty of incentive for both sides to come to the table. Diffusing the health care debate would allow a new Republican president to focus on other priorities and avoid a protracted battle over repeal of the ACA. Such a fight would alienate huge parts of the country and likely sap the new administration of political capital, just as it did the Obama administration.

If a Democrat captures the White House, a negotiated compromise could pave the way to fulfilling the law’s fundamental promise of guaranteed coverage for all Americans. That protection is now denied to millions of low-income residents in those states in which Republican leaders have resisted the expansion of Medicaid benefits.

The public, meanwhile, is clearly ready for another kind of national health care discussion. Polls show that Americans want the next president and Congress to focus most on pocketbook concerns such as rising drug costs, surprise medical bills, and inadequate insurance networks.

These are issues that demand pragmatic, bipartisan leadership—and compromises. Whether Washington’s next crop of elected leaders is up to the task is, of course, an open question.

References

  1. See the 2015 Patient CARE Act, the 2017 project’s “A Winning Alternative to Obamacare,” and Governor Scott Walker’s “Day-One-Patient-Freedom-Plan.

About the Author

Noam N. Levey is national health care reporter for the Los Angeles Times and Tribune Washington Bureau. He covered the debate on Capitol Hill over the crafting of the Affordable Care Act in 2009 and 2010, and he has written extensively about the implementation of the law across the country, reporting from Maine to Hawaii. Noam’s stories about health care policy and politics appear regularly in newspapers nationwide, including the Los Angeles Times and Chicago Tribune. He has also been published in Health Affairs and the Journal of the American Medical Association.