The Rocky Road To Repeal

Republicans have been talking about repealing Obamacare since the day it was signed into law in 2010.

It was a principal reason they gained control of the House and Senate in 2010.

It was a principal reason they dominated Congressional races in 2014.

It was a major reason that Donald Trump won the Presidency.

However, talk is cheap in politics. It is easy to talk about what you are going to do. It is difficult to actually do it.

You begin to understand how rocky the road to repealing and replacing Obamacare is when you consider three facts.

1. Obamacare's dictates touched fully 1/6 of the U.S. economy. Something that touches so much cannot be easily undone without risking turmoil. Can something so intertwined in the American economy be unwound easily?

2. There were 1,380 days between the time Obamacare was signed into law and its effective date of January 1, 2014. To put that in perspective, that is longer than the period from the bombing of Pearl Harbor until the surrender of both Germany and Japan in World War II. Despite this enormous period of time, the implementation of the law was still a disaster. If you recall, many provisions of the law were ignored and extended to later periods. Can something that took that long to implement be repealed and replaced in a few months?

3. In my last post, I quoted Daniel Kahneman on the how the human mind reacts to changes and reforms of the kind involved in repealing and replacing Obamacare. "Reforms always create winners and losers, and the losers will always fight harder than the winners." The losers in a repeal of Obamacare are sure to fight harder and shout louder than the rest of us. That you can count on. Look no further than upcoming GOP town halls if you doubt it.

Does any of this mean that President Trump and the Republican Congress should forget  about repealing and replacing this abominable piece of legislation? Absolutely not. In fact, I would argue that the GOP brand would suffer immense damage if Republicans do not follow through on their promise to repeal and replace Obamacare.

To navigate the rocky road ahead it is important to first set the stage and remind the American people of just how big an abject failure this legislation has been by explaining how far it has fallen far short of the promises that were made when it was passed.

That begins by repeatedly reminding the American people of the promises that were made that were not fulfilled.

• It was not true that family health care costs would be reduced by $2,500 per year.
• It was not true that everyone that liked their doctor could keep their doctor.
• It was projected that over 20 million people would gain coverage through the healthcare exchanges in 2016. The actual number was half of this.
• It was projected that Medicaid expansion under the law would cost $42 billion per year in 2015. The actual cost--$68 billion---over 60% above projections.
• It was stated that insurers would offer multiple plan options because it would provide them with profitable business. A large number of counties across the country have only one health care plan option today. All but five of the large number of non-profits co-ops that were so widely heralded as an alternative to the profit-driven companies have closed and gone out of business. $2.4 billion of taxpayer money was used to fund these start-ups that is now gone. Billions of dollars of losses have piled up for the "for-profit" insurers.  Most are getting out out the Obamacare exchanges leaving no plan options from whihc to choose. United Healthcare exited most of the exchanges this year, Humana stated they will not participate in 2018, Aetna says that Obamacare is in a "death spiral." 

The Republicans should also not get too caught up with establishing an effective date of the repeal that risks creating turmoil. Yes, they should pass the repeal legislation quickly. However, the effective date might be a few years in the future. After all, it took the Democrats almost four years to implement this monstrosity. It may take a few years to totally unwind it. This may not be popular with Obamacare critics but it is the reality of the situation.

The fact that repeal is going to occur does not mean that the replacement plan cannot be implemented earlier. Perhaps the replacement plans compete alongside the Obamacare plans for a couple of years. The reality of the health care plan world is that if you want replacement plans up and running for 2018 the legislation needed to be passed YESTERDAY. I see no way there will be much of a chance to offer anything new for 2018 unless legislation is passed by the end of March. If Congress misses that deadline we are looking at 2019 at the earliest for any replacement plans.

It also has to be taken as a given that anything the GOP does is going to be criticized by the Democrats. They are also going to claim that the fact that the GOP is even talking about repeal is causing the demise of Obamacare. That could not be further from the truth, as the facts above show, but that will be the argument from Democrats.

Undoubtedly, the best strategy for Republicans at this point would be to merely step aside and watch Obamacare implode on its own. Sit on the sidelines until it was clear to everyone that it is irretrievably broken. This is not a viable strategy right now. First, the GOP made repeal the centerpiece of its political strategy the last few years. Second, it would simply be irresponsible from a public policy standpoint to see the havoc and harm that such an implosion would do to our health care system.

It is frustrating that the Republicans are not better organized on a repeal and replace plan. Again, it is much easier to talk than do. However, it is a very rocky road ahead to repeal. On this road it is better to be deliberate than rush down the road where a few bumps along the way could send you over the cliff for good.

The good news is that the Republicans are in the drivers seat on Obamacare. They just have to prove that they know how to drive.