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ObamaCare by Another Name Is Still ObamaCare

Michael F. Cannon

Senate conservatives, and ObamaCare opponents broadly, have
panned the Senate healthcare bill as a charade. If conservatives
help enact this or any other bill that leaves ObamaCare’s central
architecture in place, they will take responsibility for the
ongoing harm it causes, squander their one best shot at repeal and
imperil other conservative priorities.

For seven years, Republicans have pledged to repeal ObamaCare
in full. Donald
Trump
put it
in writing
. The Senate bill would instead
preserve and even expand ObamaCare
. Like the
substantially-similar bill that already passed the House, the
Senate bill is a snub to all who voted Republican because of that
pledge.

Trump and other GOP leaders are intensifying the pressure on
Senate conservatives to vote for the bill precisely because their
hand is weak. Republican leaders need conservatives more than
conservatives need to vote for this bill.

If Republicans fail to
repair the damage ObamaCare is causing, pressure to do so would
only grow

Let’s game out the scenarios.

The Senate bill could exacerbate what are already likely GOP
losses in the 2018 midterm elections. The nonpartisan Congressional
Budget Office
projects
the Senate bill would cause premiums to be 20-percent
higher in 2018 and 10-percent higher in 2019 than under ObamaCare
alone.

Democrats are already united and energized. If the Senate bill
delivers two separate premium hikes leading up to the 2018 midterm
elections, deflated GOP voters would stay home while angry
consumers turn out to vote Democratic. Republicans would lose even
more seats in Congress, jeopardizing the Senate bill’s tax cuts and
spending constraints, not to mention other conservative priorities,
like Supreme Court nominees.

If conservatives refuse, GOP leaders would have to offer them
concessions. The longer they hold out, the larger the concessions.
Why?

If Republicans fail to repair the damage ObamaCare is causing,
pressure to do so would only grow. ObamaCare’s harmful government
regulations would continue to drive premiums skyward,
reduce quality
and
cause insurance to disappear in parts of the country
.

Consumers would keep demanding relief. The GOP base would
continue to demand its leaders follow through on their
most prominent and long-standing
campaign promise. Anti-tax
conservatives would demand Congress take up ObamaCare again to
repeal its tax hikes and facilitate tax reform.

GOP leaders would have little alternative but to work with
conservatives. If they work with Democrats to rescue ObamaCare,
they would face a rebellion that would also depress GOP turnout on
Election Day. If Trump continues to bail out ObamaCare with
payments to private insurance companies that
two of his cabinet officials
– not to mention
a federal court
– have declared unconstitutional, he would
spark a similar revolt.

The conservative House Freedom Caucus won concessions only after
showing they were willing to
let a phony repeal bill fail
. (They quickly decided they
preferred losing to winning, though. The concessions
did not materially improve the House bill
, and most HFC members
voted for it anyway.)

What changes would make the Senate bill worth passing?

Conservatives could demand an expansion of tax-free health
savings accounts (HSAs) along the lines of
legislation
by Sen. Jeff Flake
(R-Ariz.) and Rep. Dave Brat (R-Va.). Unlike ObamaCare and the
Senate bill, which merely subsidize unaffordable care, “Large HSAs”
would drive prices down.

Designed properly, Large HSAs could fit within the Senate bill’s
revenue-loss figure and even have a tax-cut-multiplier effect.
Since they would free workers to control $700 billion dollars of
their earnings that employers currently use to choose and purchase
their health benefits, they could deliver an effective tax cut
larger than all Reagan and Bush tax cuts combined.

Alternatively, conservatives could agree to keep some ObamaCare
Medicaid spending in exchange for structural reform and greater
spending constraints. A system of block grants where federal
outlays would not grow at all would allow Congress to give states
greater federal funds in the initial years than they would get
under ObamaCare.

If Congress included ObamaCare’s exchange subsidies, which would
otherwise go to insurers, states could get far more than under
current law, which would allow states to address preexisting
conditions themselves. That would free Republicans to repeal
ObamaCare’s regulations, as they promised to do, which would
instantly stabilize the individual market and could reduce average
premiums by
an estimated

90 percent
.

These options would materially improve on the status quo, even
if they fall short of full repeal. The Senate and House bills would
do neither. Those bills are not going to get better if Senate
conservatives throw away their one best shot to repeal
ObamaCare.

Michael F. Cannon is
“ObamaCare’s single most relentless antagonist” (The New Republic)
and director of health policy studies at the libertarian Cato
Institute.