Republicans To Play Blame Game on Obamacare Subsidies?

I’ve been saying for a while now that Republicans could be in a jam if the U.S. Supreme Court announces a decision in June invalidating the insurance premium subsidies for people living in the 36 states utilizing federally establishment exchanges under Obamacare, if only because the immediate impulse of rank-and-file conservatives will be to dance and sing even as millions are in danger of losing affordable health care coverage.

Perhaps behind the scenes conservatives are beginning to plan an education campaign to explain to The Troops via Fox News or other “trusted” sources why they can’t just let the subsidies die. Last week I noted that Ramesh Ponnuru had begun talking about Republicans agreeing to fix the subsidy problem while pivoting (presumably as part of some national “deal”) rapidly to an Obamacare “replacement.” But he didn’t sound terribly confident about selling this strategy to the GOP. Since we’re unlikely to find out where SCOTUS is going until June, there is time for sober reflection on the consequences of taking away the subsidies among a constituency that’s a lot more likely to include a lot of Republican voters than the subjects of a Medicaid expansion. The question is whether it can be effectively and quickly communicated to people who have been told since 2010 that the Affordable Care Act is the work of the devil.

Now one of Ramesh’s reformicon colleagues from National Review, Yuval Levin, has (with his collaborator on one of hte Obamacare “replacement” proposals, James Capretta) written a careful message to conservatives via the Wall Street Journal suggesting they get ahead of the curve:

In essence, if the court rules today’s subsidies illegal, those state officials could face a choice between creating a state exchange (and so reinforcing ObamaCare) or seeing some residents lose coverage they now have. ObamaCare’s opponents in Congress should give them a third option: a viable alternative to the Affordable Care Act.

The first step is to introduce legislation that would allow any state to opt out of all of ObamaCare’s mandates, regulations, taxes and requirements, and instead opt into a far simpler and more flexible alternative system. In that system, state residents not offered health coverage by their employers could receive a federally funded, age-based credit for the purchase of any state-approved health-insurance product—including those bought outside of any exchange and regardless of whether they meet ObamaCare’s coverage requirements.

Anyone who remains continuously insured in this system would be shielded from higher premiums or exclusions from coverage based on an existing condition. This would give consumers a strong incentive to buy coverage without a mandate to do so. All other insurance regulation, however, would happen at the state level.

States that opt for this approach would also be permitted to transform their Medicaid programs into premium-support systems for lower-income households. These would function as add-ons to the credit and allow eligible residents to buy the same kind of coverage everyone else can purchase.

The credit could be large enough to allow anyone to purchase at least catastrophic coverage—enabling the uninsured to be covered and everyone to be protected from the most extreme health expenses. Alternatively, it could be used to supplement the purchase of more comprehensive coverage. In essence, the credit would extend to everyone else the same benefit that many people have long received in the employer system. It would do so without disrupting the employer system, the coverage most Americans have.

What they are describing is pretty much the Burr-Coburn-Hatch “PCARE” proposal offered early this year as a suggested Obamacare “replacement,” with some transitional rules that would let Obamacare subsidies stay in place through the end of 2015. And they think Obama would be forced to accept something like this “solution” since otherwise he, not Republicans, will look like the one standing in the way of restored insurance for the people afflicted by the Court.

It’s all pretty clever, but a comment from Ponnuru shows its central flaw:

My only quibble is with the headline, “Time to Start Prepping ObamaCare Reforms.” What they’re talking about is better described as preparing an exit ramp from Obamacare.

Reforms, “exit ramp,” whatever. Such terms are meant to obscure the fact that such plans would keep Obamacare in place until such time as a new system could be implemented–again, before “the base” can make it all moot by forcing GOP policymakers to celebrate the carnage instead of repairing it. And if I know that and you know that, so too would the president, and I think it’s very predictable that well before congressional Republicans could be united behind such a proposal Obama would let them know the only non-disruptive course of action is to restore the intended subsidy system and then talk about what’s next. Pretending they’ve come to the rescue of people in danger of losing their health insurance by eliminating all the provisions that make it good coverage at an affordable price isn’t likely to work. But nice try.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.