If the Supreme Court decides against the Obama administration in the case, leaders in Congress are indeed determined to pass legislation to protect coverage for an estimated six million people. ObamaCare has so distorted the market for individually-purchased and small group health insurance that Congress has little choice but to throw them a safety net.
Obamacare has so far functioned as an income transfer program in which middle income people finance Medicaid expansions and health insurance subsidies for the poor and near-poor. Most uninsured middle class people have so far declined to purchase insurance because the coverage isn’t worth the price. Their taxes are subsidizing coverage for others. It seems unfair to hit them with an additional tax for refusing to buy insurance for themselves, especially when that coverage is less valuable than the coverage they are subsidizing for others.
Obamacare’s “pay more, get less” regime has made remaining uninsured an economically rational decision even for millions of people who are eligible for subsidies. Which may explain why the government is underachieving in its efforts to persuade millions of people to buy a product they just don’t think is worth the price.
Section 1332 needs to be amended to narrow the discretion vested in HHS to approve or reject state health-reform plans and grant waivers. It also needs to more explicitly and precisely empower states to enact innovative health reforms, while providing them with the federal funding necessary to implement them.
How? Congress could specify that state waiver applications will be presumptively approved so long as they are deficit-neutral to the federal government. States would then be expected to make adjustments to their plans, as needed, if subsequent experience demonstrates that their coverage or cost goals were not met.
Jeb Bush says that Obamacare is a “monstrosity” and wants the government to focus instead on a catastrophic coverage plan to help people who experience costly medical crises.
The potential Republican 2016 presidential contender said that he doesn’t see Obamacare being repealed before President Barack Obama leaves office. But once it is, he wants to see a different plan.
Having the crisis play out in early 2016 rather than the summer of 2015, could mean that Republican members of Congress would take a harder line position. Voters, after all, would be paying more attention to politics given the presidential race. Any Republican who votes to restore the subsidies could risk a primary challenge from an opponent portraying this as a vote to expand Obamacare.
On the other hand, the later timeframe could make the risk-averse Republican Congressional leadership more eager to cut a deal, rather than have a bruising fight spill into a crucial election year for which they have high hopes.
Whatever the case ends up being, for now all we can say is that Alito introduced another wildcard that will keep us guessing until the Court announces its decision.
Sasse’s proposal is helpful to the cause of repeal in a number of ways:
First, it takes pressure off of Republican governors and state legislators, many of whom, in the absence of a proposal along these lines, could reliably be counted upon to cave and set up state-based Obamacare exchanges. Such state-based exchanges would prevent people from being left high and dry as a result of a Supreme Court ruling that the Obama administration has been lawlessly paying out the subsidies (through federal exchanges) on which these people are counting. But setting up such state-based exchanges would entail a massive Republican expansion of Obamacare that must be avoided. Sasse’s proposal helps to avoid that.
Second, it wouldn’t “fix” Obamacare. It makes no effort to reform it or make it more market-based. It offers tax credits apart from it to help transition people off of it.
Third, it helps remove the temptation for Republican congressional leaders to negotiate “fixes” to Obamacare with Obama. Such “fixes” are the likely price that congressional leadership would demand in exchange for turning Obamacare’s subsidies back on. But Republicans shouldn’t be in the businesses of “fixing” Obamacare; they should be in the business of repealing it and replacing it with a conservative alternative. Negotiating “fixes” is the worst thing they could do — far worse than turning the subsidies back on temporarily in exchange for nothing. Sasse’s bill helps prevent the “fix it” caucus from taking the lead.
Those in Congress who, like me, oppose Obamacare cannot sit by and let the governors twist in the wind. We must help them do the principled thing while helping those most affected by the administration’s illegal actions. We cannot let Obamacare expand geographically by setting up state exchanges, nor can we extend Obamacare’s unlawful subsidies. The former would rubber-stamp Obamacare state-by-state and the latter would baptize the unlawful actions of the Obama administration.
If Congress extends Obamacare by keeping the subsidies, it would be raising taxes by reinstituting the individual mandate for those freed by the Court’s decision and by resurrecting the employer mandate. Governor Bobby Jindal (R., La.) made this point recently on National Review Online when he wrote that “restoring the flow of subsidies means restoring the employer mandate, thus raising taxes.” He is absolutely right that we cannot restore the flow of Obamacare subsidies and the associated taxes and mandates.