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The conservative case for the Affordable Care Act, part III

at 02:34 PM ET, 03/22/2011


House Budget Committee Chairman Rep. Paul Ryan, R-Wis. (Susan Walsh - Associated Press)
Reihan Salam is tired of having to rebut the claim that the consistent thing for conservative supporters of subsidized-insurance exchanges for the over-65 set to do would be to support — or at least admit the potential viability of — subsidized exchanges for the under-65 set, which is a model better known as the Affordable Care Act.

But moving on from it is easier said than done. The policy Reihan is trying to defend — the Ryan-Rivlin bill (pdf) — appears to mimic the Affordable Care Act. One of its two namesakes, Alice Rivlin, believes that it mimics the Affordable Care Act and has said so on-the-record. Its other sponsor, Paul Ryan, says he disagrees, but he can’t explain why. When asked, he said, “how I would do exchanges are very different than how Alice wants to do exchanges.” He didn’t go into further detail. I subsequently asked Ryan’s staff if Ryan would like to do an interview explaining how his exchanges would differ. The request was declined. I then asked his staff if they could explain to me how Ryan’s exchanges differ. They didn’t respond.

So right now, what we know is that Ryan-Rivlin appears to work like the Affordable Care Act. Alice Rivlin believes that. The Tax Policy Center believes that. Tyler Cowen believes that. And they believe that because, given what we’ve seen of the proposal, it’s true. Ryan has had plenty of opportunity to explain in detail why it’s not true, but as of yet, he has not done so. He’s a busy guy, so perhaps he simply hasn’t found the time. It is possible that there is some major policy difference that’s not detailed in the legislation but that is in Ryan’s head. If that’s the case, however, he appears not to have mentioned it to Rivlin. I’d find that surprising, if true.

In the absence of an explanation from Ryan, Reihan is left generating possible explanations on his behalf. Perhaps, he says, the difference is that the Affordable Care Act doesn’t do enough to change the tax treatment of health-care insurance (though, through the excise tax, it does more on this front than has ever been done before). But Ryan-Rivlin has nothing to do with the tax treatment of health-care insurance. Perhaps, he says, it’s that the Affordable Care Act relies on Medicaid for about half its coverage expansion. That’s more plausible, but no conservative legislators have proposed fixing the Affordable Care Act by folding Medicaid into the exchanges. Perhaps it has to do with other differences with universal exchange programs like Emanuel-Fuchs and Wyden-Bennet. But neither Ryan nor the GOP embraced the Wyden-Bennet or the Emanuel-Fuchs models. Conversely, Zeke Emanuel, the principle architect of Emanuel-Fuchs, helped design the Affordable Care Act, and Ron Wyden, the principle author of Wyden-Bennet, voted for it. Perhaps it’s because the Affordable Care Act is different from a previous health-care reform bill Ryan sponsored. It’s true that Ryan-Coburn was different than Ryan-Rivlin and than the Affordable Care Act, but it’s irrelevant to the claims Ryan is making on behalf of Ryan-Rivlin, which is the plan he is sponsoring and pushing now.

And all of these arguments stray from the question at hand. Ryan-Rivlin is only good policy if the competition generated by the subsidized-exchange model radically controls cost growth. If it does, then there is no reason it will not also do so in the Affordable Care Act. If it doesn’t, then the policy will fall apart. That doesn’t mean conservatives who support Ryan-Rivlin need to support the Affordable Care Act. Just as many liberals refused to support the bill unless it included a public option, conservatives could choose to oppose the bill unless it privatizes Medicaid. There’d be nothing inconsistent about that. But it does mean that they need to either upgrade their estimation of its savings or downgrade their estimation of Ryan-Rivlin’s savings. As it happens, I think it makes more sense to do the latter than the former, but I could make the case the other way, too.

I don’t push on this point to frustrate Reihan. I push on this point because it’s important. The intense partisan emotions generated by the Obama administration — not to mention the desire to win in 2012, the long fight over health-care reform, etc. — can obscure good policy analysis. You don’t have to think the Affordable Care Act is a great bill to believe that. What Ryan-Rivlin shows is that conservatives are very optimistic about the basic changes the Affordable Care Act is making to the private-insurance system in other contexts. At its heart, Ryan-Rivlin is a bet that a cost-conscious population, plus the subsidized-exchange model that looks a lot like the exchanges in the Affordable Care Act, can control costs in Medicare. If that’s true, then the Affordable Care Act has a very good chance of working. That doesn’t deny the presence of other policies in the Affordable Care Act, like the Medicaid expansion, that could still lead a conservative to oppose it. But the basic consensus around the law’s most fundamental changes to the health-care market is worth emphasizing.

 
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