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The Alternative to Obamacare Is Obamacare

If history didn’t have a way of repeating itself, the tawdry battle of King vs. Burwell would by now be an obscure footnote. Instead, that defunct legal challenge to the Affordable Care Act is looking more like a template for the future than an ugly but meaningless sideshow.

The challengers in King ultimately failed, but their aim was dastardly. Last year, they asked the Supreme Court to adopt a decontextualized and highly misleading interpretation of the ACA, under which the federal government would be prohibited from subsidizing Obamacare exchange–based insurance plans in the majority of states. The federally run markets in these states would have collapsed, and millions of people would have lost their health insurance.

Such a calamitous ruling would have blown the doors of the health care reform debate wide open once again, except this time Republicans would be in control Congress, and any “fix” to the problem would have to run through them.

These Republicans, as had been their wont for several years by then, didn’t have a plan in place for winning that lawsuit. They talked a big game about creating a “bridge away from Obamacare,” but on Capitol Hill it was a not-so-well-kept secret that many Republicans and their aides were scared to win. They didn’t want to be blamed for the ensuing humanitarian crisis, or bear responsibility for resolving it. Unsurprisingly, the “bridge away from Obamacare” was a patch that would’ve restored subsidies temporarily, so that a negotiated settlement would determine the ultimate fate of the Affordable Care Act after the election. They were the dog chasing the car, in other words, but they didn’t really care to catch it.

They caught it in a big way on November 8 of this year. And suddenly all the sentiments surrounding King vs. Burwell—liberal anguish, conflicted hostility on the right—have become relevant once again.

This would not necessarily be the case had Republicans rethought their Obama-era nihilism at any point, accepted the basic notion of a health care coverage guarantee, and stopped making false but politically potent promises to repeal the law outright. The proposition would, in that case, be Republicans reducing regulations and subsidies in the insurance marketplace, and calling it a day—something they could accomplish easily, were the party at all rational. That’s obviously not what happened.

Republicans can’t abandon their promise to repeal Obamacare, but, just as when they thought they might win the King case, they fear the political consequences of stripping millions of people of their insurance abruptly.

So they’re proposing almost exactly what they proposed a year and a half ago: delay the reckoning—this time by three years—and use a looming health insurance cliff to strong-arm Democrats into cooperating with them on a new, less generous, less expansive health law.

Democrats are about to have very little political power in Washington. Under the circumstances, some Democrats will be tempted by despair, and seek to cut their losses.

These Democrats would be making a catastrophic error. They are confusing the GOP’s rhetorical bravado for the political upper hand, and if they accept that view of things they may conclude that collaborating with Republicans will lead to the least bad political and humanitarian outcome on offer.

But the politics of stripping 10 million to 20 million people of their health insurance are perhaps more terrible than the politics of phasing in privatized replacements for Social Security and Medicare. Republicans are fishing for bipartisan cover for a reason, which is that the promises they’ve made are politically unsustainable. That gives Democrats leverage—and, if they play their cards right, it gives them the power to either save Obamacare or move the country’s health care system in a more progressive direction when they return to power.

The real checkmate scenario for Democrats would have required Republicans to do more than just rail maniacally against the ACA for seven years. If Republicans had coalesced behind a consensus alternative to the ACA, they could now phase that program in on their own, with or without Democratic cover. Any olive branch Republicans offered under those circumstances would be extremely limited. Small swaps that would barely contain the damage to the health care law, in exchange for a bipartisan imprimatur.

But Republicans have no such alternative in hand. And more importantly, their conferences are too divided to reach consensus on an alternative they could pass without Democratic votes.

As of a year ago, they had enough votes to pass symbolic legislation to sunset Obamacare subsidies and taxes, but everyone who voted for the bill knew President Obama would veto it out of hand. So the first question is: Will at least 50 Republicans vote for an Obamacare sunset bill knowing that President Trump will sign it? Nobody can say for sure. But operating under the assumption that they pass such a bill, the Democratic Party’s leverage won’t have been eliminated: It will have been activated.

A law that promises Obamacare will be essentially off the books in three years will be destabilizing to the insurance marketplaces all on its own. Carriers will be disinclined to continue participating in these fledgling markets if they’re likely to be dismantled anyhow. In other words, the political and humanitarian costs of the GOP’s repeal strategy will begin piling up right away.

The only way to hold the marketplaces together would be to essentially throw money at insurance companies. Under Obama, Republicans vilified this kind of subsidization as a “bailout,” but if a new “bailout” is the price they must pay to avoid being blamed for millions of policy cancelations, they might just do it. President-elect Trump is currently barnstorming the country bragging about handing out favors to companies that agreed to make bad business decisions. The same political economy driving Trump’s Carrier public relations coup will apply to the GOP’s desire to avoid a public relations nightmare, if their recklessness threatens to destabilize the individual insurance market.

But that very desire to avoid responsibility for bad outcomes is the source of Democratic leverage. Republicans will have taken millions of insured Americans hostage, hoping Democrats would help them pick off the victims. By doing nothing, Democrats will turn the gun back on Republicans themselves.

During the fight over Social Security privatization in the Bush years, Nancy Pelosi understood the strategic logic behind refusing to collaborate on an unpopular project. According to her biographer Marc Sandalow, she told her members, “Our plan is to save Social Security, stop privatization, and stop raiding the trust fund. It’s going to be his privatization versus Social Security.”

That logic holds just as well for Obamacare repeal. So long as Republicans need Democratic votes to “replace” it, the alternative to Obamacare is Obamacare—or perhaps something so indistinguishable from Obamacare that Democrats pass it as the cost of saving health care reform from partisan brickbats.

If Republicans can’t legislate a replacement bill over the course of three years (and nothing we’ve seen over the past seven suggests they can) they will have to choose between extending the sunset indefinitely or falling off the insurance cliff into the abyss.

That is the central difference: Democrats in 2005 didn’t have an artificial Social Security sunset to worry about. Today, there is a risk that refusing to collaborate with Republicans will prefigure a genuine policy catastrophe. But that would be the GOP’s catastrophe, they would own it politically, and if they couldn’t fix it, they would be punished for it by some of the very voters—beneficiaries of Obamacare—who handed Trump the presidency.

There’s no getting around the risk here: If Republicans, through zealotry and haplessness, destroy Obamacare, and leave millions of uninsured Americans in the lurch, the human toll will be real. But it will reveal the hidden contradictions that allowed Trump to come to power, and create the conditions for a more just and politically stable health insurance system in the future.

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