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A Blueprint for Repealing and Replacing Obamacare with Bipartisan Support

Monday, November 14, 2016 8:08
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(Before It's News)

Josh Blackman

President-elect Trump has promised to repeal and replace Obamacare in his first 100 days. The House, with a substantial Republican advantage, can easily pass any Obamacare bill Speaker Ryan sees fit. The Senate, however, faces a substantial roadblock. With only 51 Republican votes, Democrats can filibuster the Affordable Care Act’s repeal. Senate Majority Leader McConnell can bypass the filibuster in two ways, but he should resist the temptation. Passing Obamacare on a straight party-line vote was a mistake. Repealing it on a straight party-line vote would be an even bigger mistake. Republicans should not repeat the Democrats’ and arrogant blunder from eight years ago. Swapping Obamacare for Trumpcare would simply flip the politics: Half the country would support it, and the other half would hate it. For health-care reform to be successful beyond 2020, it must be bipartisan.

All of the landmark social-welfare and civil-rights laws enacted in the 20th century were passed with bipartisan support, often through messy political compromises and bargaining. The Social Security Act of 1935 was supported by 77 Republicans in the House, joined by 288 Democrats. In the Senate, 15 Republicans joined 60 Democrats. The Civil Rights Act of 1964 passed the Senate because of a coalition of 27 Republicans and 44 Democrats united to break a segregationist-led filibuster. The Social Security Amendments of 1965, which created Medicaid and Medicare, passed the House by a vote of 307–116, with 70 Republicans voting in favor. This monumental health-care legislation cleared the Senate by a vote of 70–24; 13 Republicans crossed the aisle. The Voting Rights Act of 1965 was passed with broad bipartisan support, as was the Civil Rights Act of 1968. In 1990, the Americans with Disabilities Act passed with 90 percent agreement in the House and Senate. But not Obamacare. It was passed without a single Republican vote in the Senate or House.

It was hubristic of President Obama to think that after enacting a monumental law, without any bipartisan buy-in, opponents would simply fall in line. As history played out, Republicans had no problem undermining a law they had no part in enacting and felt no attachment to. Senator Max Baucus, chairman of the Finance Committee that drafted the health-care bill, “fret[ted]” about the ACA’s origin. “It is my belief,” he said in December 2013, “that for major legislation to be durable, sustainable, it has to be bipartisan. I mean, one party can’t jam legislation down the other party’s throat. It leaves a bitter taste.” Baucus was right.

The Trump administration should force Democrats to negotiate by threatening to throw their staff onto the Obamacare exchanges.

Republicans do have the power to repeal huge chunks of Obamacare with 51 votes because of how it was enacted. In January 2010, after the election of Scott Brown of Massachusetts, the Senate Democrats lost their 60th vote. To avoid a Republican filibuster, Speaker Nancy Pelosi passed the bill through what is known as the budget-reconciliation process. With that approach, the bill could not be filibustered when it returned to the Senate.

Eight years later, 51 Republicans can now use the exact same process to repeal portions of Obamacare, such as the Medicaid expansion and the payment of subsidies on the exchanges. However, as Avik Roy writes at Forbes, it can’t eliminate everything. “The partial repeal bill does not get rid of Obamacare’s tens of thousands of pages of insurance regulations,” Roy explains, as well as “the regulations that are responsible for the law’s drastic premium hikes.” If Republicans choose the reconciliation path, as some members are already considering, we would be stuck with Obamacare’s hollow shell. Gutting the subsidies, without eliminating the regulations that make insurance expensive, would be counterproductive: Premiums would continue to increase, and people would be unable to purchase policies. Even worse, it would permanently poison the well for prospects of future reform. That “bitter taste” Senator Baucus spoke of would linger in perpetuity.

A second approach would allow the GOP to eliminate Obamacare in its entirety with 51 votes by nuking the filibuster. In 2014, Senate Majority Leader Reid invoked the so-called “nuclear option” to remove the 60-vote threshold for confirming judges and other executive-branch appointments, with the exception of Supreme Court nominees. I fully expect Majority Leader McConnell to use the same parliamentary procedure to confirm President Trump’s first nominee to the high court — it is simply the next step in the downward spiral of our confirmation process.

Eliminating the filibuster for all legislation, however, is a much more drastic step. As a general matter, the filibuster favors conservatism, as it requires 60 percent of the Senate to expand the power of the federal government. Republicans may seek to maintain the filibuster as a precedent to prevent a future Democratic Senate from running roughshod over the cause of limited government. McConnell recently acknowledged that Republicans should not “act as if we’re going to be in the majority forever.”

But, with a healthy dose of reality, Republicans likely realize that, in the future, Senate Majority Leader Chuck Schumer would have no objection to eliminating the filibuster to support President Elizabeth Warren’s statist agenda. In this game of mutually assured destruction, Republicans may be tempted to move first. And if there was ever a single goal that would unify Republicans to take this extreme step, it would be the elimination of Obamacare. Fortunately, there is a third path. Republicans can force Democrats to the bargaining table with an offer they can’t refuse: Support reform or we’ll throw your staff onto Obamacare.

In September 2009, when the ACA was being drafted, Senator Chuck Grassley of Iowa proposed an amendment requiring members of Congress and their staff to use the newly created Obamacare exchanges. “The more that Congress experiences the laws we pass,” Grassley said, “the better the laws are likely to be.” The veteran fiscal hawk added, “My interest in having Members of Congress participate in the exchange is consistent with my long-held view that Congress should live under the same laws it passes for the rest of the country.” The amendment, which was merged into the final Senate bill, provided that the federal government could offer members of Congress and their staff only health-insurance plans that were “created under” the ACA, or “through an Exchange established under” the new law.

As a result of Grassley’s amendment, members of Congress and their staffers, unlike all other federal workers, would no longer be eligible for the generous Federal Employees Health Benefits Plan (FEHBP). Under FEHBP, the government pays approximately 75 percent of an employee’s annual premium. This annual tax-free contribution of between $5,000 and $2,000 was far more generous than the income-adjusted subsidies available on HealthCare.gov. Indeed, many well-compensated congressional employees—starting with a family of four that earns more than $100,000 a year — would be ineligible for any subsidies on the exchange. Under Grassley’s plan, they would now be put in the same position as other Americans who had to pay the full cost of their insurance, without any governmental assistance.

The Grassley amendment was extremely unpopular on Capitol Hill. There were rumors that House and Senate staffers would resign if they were forced to pay full fare for their insurance. It is beyond ironic that employees who labored to pass Obamacare threatened to leave government if they had to actually use it. Politico reported that during the summer of 2013, House Speaker John Boehner and Majority Leader Harry Reid quietly collaborated to develop a “legislative fix” that would ensure that congressional benefits would not be disrupted. The duo even personally lobbied President Obama at the White House, while using a cover story so as not to arouse suspicions. However, as the movement to repeal and replace Obamacare grew during July and August, the House GOP leadership abandoned any efforts to modify the ACA, short of total repeal.

Where Congress would not act, President Obama did so unilaterally. The Office of Personnel Management (OPM) announced that members of Congress and their staff would be able to purchase health insurance on the District of Columbia’s Small Business Health Options Program, known as the D.C. SHOP exchange. The ACA authorized these new SHOP exchanges to offer a health-insurance marketplace for workers at small businesses with fewer than 50 employees. At President Obama’s direction, OPM determined that after a congressional employee enrolled on the District of Columbia’s SHOP Exchange, the government could then provide the same 75 percent contribution that was offered under the FEHBP. Thus, there would be no meaningful disruption in benefits for Hill staffers. This is a benefit that no one else on the SHOP exchange would be eligible for. Notwithstanding the Grassley amendment, which expressly sought to put congressional employees on the same footing as all other Americans on the exchanges, now congressional employees would be in the exact same position as they were before the enactment of the ACA. The OPM fix was a blatantly illegal effort to bypass an unpopular law.

Senator Ron Johnson (R., Wis.) challenged the legality of the OPM rule in 2014. “OPM exceeded its statutory jurisdiction and legal authority,” he wrote in the Wall Street Journal. “In directing OPM to do so, President Obama once again chose political expediency instead of faithfully executing the law — even one of his own making.” Article II imposes on the president a duty to “take care that the laws be faithfully executed.” Alas, the federal court dismissed Johnson’s suit, finding that the senator was not injured by the payment of additional subsidies. (Indeed, most of President Obama’s illegal executive actions were shielded in court because parties were not injured and therefore lacked “standing” to challenge them.”)

But now there’s a new sheriff in town. With the stroke of a pen, President Trump can direct his Secretary of the Office of Personnel Management to rescind the old policy: Eliminate all special subsidies for members of Congress and their staff, and force them to buy insurance on HealthCare.gov like all other Americans. But this deal would not be so simple.

The subsidies should not be eliminated right away. Rather, the administration can use the largesse as leverage. Here’s the pitch to Democrats: Negotiate on a bipartisan ACA compromise, or else your staffers will have to go onto the ACA. If a deal is not reached by some specific date, then the subsidies are cut off. This cudgel will hit close to home, and bring Democrats from across the spectrum to the bargaining table, at the risk of a mass exodus of staffers. I seriously doubt the American people would shed tears for the plight of well-compensated government employees who are receiving generous and illegal health-insurance benefits. The optics here inure to President Trump’s benefit.

Once at the table, there would have to be serious discussions of a bipartisan reform. Again, if Republicans unilaterally advance their wish list of repealing Obamacare without any Democrat buy-in, health-care reform will remain mired in partisan politics. Majority Leader McConnell seemed to acknowledge this dynamic after the election. “We have been given a temporary lease on power, if you will,” he said, and the Senate must “use it responsibly.” The Capitol Hill veteran added, “I think what the American people are looking for is results. And to get results in the Senate, as all of you know, it requires some Democratic participation and cooperation.”

If there is any hope to create a sustainable alternative to the ACA, compromises must be made — and it will likely take more than 100 days to unravel a law that has been in effect for nearly 100 months. This blueprint, at a minimum, suggests how to start the art of this deal.

Josh Blackman is a constitutional law professor at the South Texas College of Law, an adjunct scholar at the Cato Institute, and the author of Unraveled: Obamacare, Religious Liberty, and Executive Power.

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