There is a simple explanation for why Republicans in Congress can’t agree, even among themselves, how to replace Obamacare, as demonstrated once again this week. On the most fundamental question — whether medical care is a right that should be guaranteed to all citizens, or merely another consumer good — the party’s elected representatives are hopelessly conflicted.
A sizable minority of Republicans, as a matter of free-market principle, believe that nobody has a right to medical care, or anything else for that matter, beyond what they are willing to spend and can afford to pay. When you hear them railing about the “creation of another government entitlement program” or “forcing the healthy to subsidize the sick,” that is what they are really saying — they just don’t have the political courage to come out and say so. Indeed, if members of the so-called “freedom caucus” had their druthers, they wouldn’t stop at repealing Obamacare— they’d repeal Medicare and Medicaid as well.
And then there is the majority of congressional Republicans who believe that, in a country as rich as ours, no citizens should be denied medical care because they are too poor or too sick. They are unwilling to come out and say it, however, because to do so would commit them to raising the taxes and enacting the regulations necessary to make that a reality. If these Republicans had their druthers — and if they thought they could withstand a hard-right challenge in the next Republican primary — they would fix Obamacare, not repeal it.
Because this a dispute about ends, not means, it is not easily amendable to compromise. So Republicans are left to try to paper over their differences by tinkering with “community rating,” “high-risk pools” and other things they barely understand but now have suddenly assigned make-or-break political significance. This bumbling incompetence might be comical if it weren’t so damaging to public confidence in government.
But what if a newly elected Republican president eager for a political victory were to utter the unutterable — to declare that he is willing to acknowledge the right of all Americans to buy all the medical care they need for no more than 15 percent of household income? It would be a stunning political concession from the leader of an increasingly conservative party. What could a self-styled dealmaker demand from Democrats in return?
For starters, he could propose that the third of Medicaid spending that now benefits low-income seniors be transferred, as it should always have been, to Medicare, along with the Obamacare taxes necessary to pay for it. Spending for seniors is the fastest-growing part of a Medicaid program that has become a fiscal time bomb for state governments, which pay anywhere from 20 to 50 percent of the cost of the program. Send it to Medicare as a new Part E and he would instantly win 50 governors and thousands of state legislators as political allies, along with the support of the insurance industry.
With seniors taken care of, this president could delight Republicans everywhere by proposing to “end Medicaid as we know it,” and instead provide its beneficiaries a voucher which would allow them to buy any managed care plans sold on the state’s health insurance exchanges. Such insurance plans, designed for the Medicaid population but open to anyone, would have no deductibles and limited co-payments and give primary physicians the incentive and responsibility to actively coordinate care and keep patients healthy. That would be a big improvement of the current Medicaid fee-for-service program, which delivers lousy health outcomes and pays so little that doctors are fleeing it in droves.
To finance coverage for the non-poor, the president could demand an end to the regressive policy of exempting employer-paid health insurance from being taxed as income — a tax loophole that costs the Treasury more than $250 billion a year.
Instead, that money would be used to provide every household with a tax credit that could be used to pay for insurance, whether or not employers pay any portion of the premium. The credit could be set so that it covers, at a minimum, 80 percent of the age-adjusted cost of a buying a high-deductible catastrophic insurance policy on state exchanges.
This would obviate the need for Obamacare’s controversial insurance mandate, because someone would have to be an idiot not to use the credit to buy, at minimal cost, a policy that protects against huge medical bills in the event he gets hit by a truck or needs treatment for a life-threatening disease.
And because it is age-adjusted, the credit would obviate the need for another controversial Obamacare rule, the one preventing insurance companies from setting premiums for 60- year-olds at no more than three times what they charge 20-somethings. The move from tax exemption to tax credit would also be highly progressive, favoring low-income workers at companies that don’t offer health insurance rather than high-income workers at companies that do.
Finally, this president could demand that Democrats agree to malpractice reform limiting pain and suffering awards for medical mistakes — for decades a big symbolic issue for Republicans and a sure-fire way to win support from physicians. This could be coupled with a requirement that the limits only apply if doctors follow practice guidelines based on extensive new research on medical outcomes financed under Obamacare.
Political hands will have noticed by now that these demands are guaranteed to generate howls of protest from a number of powerful Democratic constituencies: advocates for the poor, who are deeply invested in defending both the structure and funding levels of the current Medicaid program; labor unions, who will fight to the death to protect the tax advantage of the gold-plated health-care benefits they have negotiated for their members; and trial lawyers, huge Democratic party donors, many of whom make their living suing doctors.
But a Republican president who dares to sacrifice sacred cows of his party has the right to demand that Democrats sacrifice sacred cows of their own — all the more so because these are all policy changes that nonpartisan economists and health-policy experts have long advocated.
In the current political climate, the reality is that there is no way to craft a grand compromise on health care without radically altering the political calculus by changing the terms of the policy debate. Having invested so much time, energy and political capital in their current positions, all factions are so dug in that the only way to shake them loose is by putting on the table ideas that are so bold and so tempting that they are willing to consider giving up something to get them.
Who better to kick-start such a process than a president who owes no allegiance to politicians of either party and whose instinct for politically “foolish” ideas won him a four-year lease to 1600 Pennsylvania Ave.
President Trump has already demonstrated that he doesn’t know enough about health care to supervise this process himself, while the people around him have shown themselves to be so wedded to their old partisan or ideological positions that they can’t be much help, either. He needs to turn elsewhere for help.
There are politically savvy governors, respected health-policy experts and independent-minded members of Congress who could come together behind closed doors and easily agree upon a grand bargain that Trump could sell to the voters — and sell to Congress. And if he succeeds, he would have created a working majority in Congress not just for health care, but for infrastructure and tax reform as well.
And what if it doesn’t work? In that case, he would be in no worse position than he is now, which is facing the real prospect of a failed, one-term presidency.