Reforming Obamacare

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In my last post, I discussed how the check of midterm elections prevented the Obama Administration and the Democrats from effecting fundamental institutional change.  In this post, I want to turn to the most important change that the Obama Administration passed – Obamacare.

While the election of a strong Republican majority in the House was important, by itself it was insufficient to repeal Obamacare.  Had the Republicans won the presidency and the Senate, that probably would have been enough to repeal significant portions of the statute through mechanisms such as reconciliation that could not be filibustered.  Even if the Republicans had simply won the presidency, the executive could have used its regulatory authority to significantly cut back on Obamacare.

But unfortunately the Republicans neither won the presidency nor the Senate.  At this point, the question arises whether Obamacare has passed enough electoral tests that the nation will be stuck with it.

One possible way that the Republicans might make inroads would be if they made significant gains in the 2014 midterm elections, increasing their majority in the House and taking over the Senate.  But that would still not allow them to override a veto by President Obama.

The only way that the Republicans could eliminate Obamacare – or make significant inroads in it – would be if the program continues to be unpopular and they secure the Presidency and both houses of Congress in 2016.  That is both a long way off and a long shot.

Instead, it seems likely that the basic structure of Obamacare will be difficult to eliminate.  If that is true, Republicans need to determine how to make changes in Obamacare that move it closer to a market system without entirely eliminating it.  This may not be easy, but it seems likely to be the only way forward.

I am no expert on Obamacare, but there are a host of changes that might make the policy more “market” oriented.  Let me just mention one.  The insurance policies that are approved by the government for provision by employers and for sale on the exchanges could be adjusted to permit (or even prefer) a low benefit policy.  For example, insurance might be allowed that provides health savings accounts for ordinary expenses and then basic insurance for higher expenses.  Moreover, the law might be modified to preempt state laws that require a host of mandated benefits that drive up the cost of insurance.  Further, the subsidies that are provided to low income people might be adjusted to provide an incentive for  people to choose these policies.  In this way, insurance policies that the law prior to Obamacare unfairly discouraged could be allowed under Obamacare.

Will such changes be politically possible?  It depends, in part on how popular Obamacare is.  But even if Obamacare is reasonably popular in 2016, changes of the above sort might be quite politically feasible.  They do not eliminate the program, they simply adjust it from within.  In the law, it is well known that some politically popular precedents, such as Miranda, are not overturned – since that would be very visibile and unpopular – but are instead cut back on and arguably gutted, which is far less visible.  The same could be done to Obamacare.

Sadly, it is time to start thinking about these strategies rather than simply repealing the law.