What Republicans in Congress and in the General Assembly need is the audacity to hope.
Perhaps as early as today, the Supreme Court could strike down the entire federal exchange subsidy regime in the Patently Deficient and Unaffordably Careless Act (PDUCA). If they do, conventional wisdom says Republicans in Congress will be forced to scramble to find a way to keep the subsidies going. I say conventional wisdom is out to lunch. In fact, if the Court strikes down the subsidies in King vs Burwell, Republicans in Washington and in Richmond could use the opportunity to completely remake “Obamacare” and put America on the path to real health care reform.
Here’s what Congressional Republicans could propose for a health-care reform do-over.
Replace the subsidies with individual tax credits: The idea behind the subsidies (the economic one, not the Democrats’ usual political addiction to them) was to level the playing field between individual market policies and employer-bought group policies (which have been considered tax-deductible wage benefits since World War II). The PDUCA took the subsidy route on the assumption that people were too stupid to do basic math, and thus wouldn’t understand that the premium figures they saw on the health-care exchange would be reduced by tax credits (this also led to a lot of the code problems that plagued the website in 2013). Republicans should assume Americans are smarter than that (because they are), and put forth tax credits. They could even try putting the credits into the withholding procedure, thus ensuring the credits show up over the course of the year (and can be used to help pay the premiums). They can also set the credits so they don’t create the loss-of-work trap that the PDUCA subsidies have.
Remove the policy restrictions for the federal exchange: There’s nothing particularly galling about an exchange per se; the bigger problem is the restrictions on what policies can be listed (like this). The restrictions are anti-competitive and designed to ensure health insurance companies are profitable. Well, health insurance companies should be allowed to fail. Break the cartel and junk the restrictions.
Privatize the exchange itself: As I said, an exchange is fine, but there’s no reason for it to be run by HHS – and given recent history, plenty of reasons it shouldn’t be.
Finally, Congress can throw in the traditional GOP health care reform ideas, such as ending state-only insurance, tort reform, etc., plus one more: Break the AMA-CMS pricing lock.
Ninety miles southward, the General Assembly can get in the game, too. A special session to propose state versions of all of the above (or, to be more precise, as the Feds for a waiver to do all of the above), would be an excellent health care reform plan to present the voters and show Virginia that a Republican General Assembly is worthy of keeping.
Of course, both legislatures will have to deal with a Democrat as chief executive. At the federal level, Congress will have to choose between holding out until the president caves or working out an agreement to get some of the above. History shows us that one person can hold out more easily than three hundred, so expect the latter – in which case it’s up to us to make sure Congress knows that any deal has to move away from the PDUCA and towards less government, greater competition, and more individual choice.
In Richmond, given what a governor can do, the GA will likely face some kind of amendment package. Again, we need to let our Delegates and Senators know, any deal needs to be about less government, greater competition, and more individual choice. My point is this, we can move in that direction in a post-King decision world, so long as we embrace the opportunity. This is a time for boldness, not cowardice.
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