The congressional deal that could save Obamacare
The received wisdom about the fate of the Affordable Care Act is that it’s in the Supreme Court’s hands -- more specifically, in Chief Justice John Roberts’ hands, since he’s thought to be the swing vote in a 5-4 split on the law. This is key because of the Halbig issue, on which the high court will rule early next year: Does a wording glitch in the ACA mean that federal subsidies can’t be offered to residents of the 36 states that didn’t create their own insurance exchanges? A Supreme Court ruling in the affirmative would kill federal subsidies for residents of those states, snatching affordable health coverage out of their hands.
But it’s worth emphasizing a point I raised in a post earlier Monday: A great opportunity exists for a congressional deal to make the court action moot (whichever way it leans). This involves offering the GOP majority in Congress two of its key objectives on the ACA, in return for fixing the drafting glitch the Supreme Court is preparing to scrutinize.
These two objectives are killing the medical device tax and eliminating the employer mandate. As it happens, many Democrats would agree with item No. 1, and even many progressive economists believe item No. 2 is unnecessary. Make this deal, and presto: Both sides can claim victory. Isn’t that what political palavering is all about?
Take them one at a time. The medical device tax, a 3.2% excise levy on most major medical devices sold in the U.S., was designed to generate $30 billion over 10 years to fund the ACA. That money would have to be found elsewhere, but what the hey -- this is government budgeting, so the gap probably could be papered over during the 10-year span.
Political pressure from the device industry has been absolutely relentless. Medical device manufacturers would seem to be like liquor stores -- there’s at least one in every state and congressional district. As a result, broad bipartisan support exists for killing it; even Elizabeth Warren (D-Mass.) is on board. So give it up, if something valuable could be achieved in return.
As for the employer mandate, there’s broad agreement among economists that eliminating it would have little effect on employer-based coverage, would “eliminate labor market distortions in the law” and would be broadly popular in the business community. The quote is from an analysis published in May by the Urban Institute and Robert Wood Johnson Foundation, which are no pushovers when it comes to healthcare reform. The employer mandate starts biting on Jan. 1, 2016, when employers with 50 to 99 employees must offer them health coverage or pay a penalty.
This deal, of course, is a test -- of Republicans’ real capacity and desire to govern, now that they’re about to be in the majority in both houses, not merely obstruct. It’s also a test of the ability of Democrats and President Obama to offer a deal in a way that doesn’t aggravate long-term tensions.
But the onus really is on the GOP. It would have to abandon its rhetorical commitment to killing Obamacare. That requires the grown-ups in the party, if there are any left, to tell the tea party extremists to kiss off. They’d also have to come to grips with the reality that Obamacare is here to stay, and leaving its fate to the Supreme Court’s possibly adverse judgment will hurt many of its own constituents -- middle- and low-income residents of Republican states that failed to create their own insurance exchanges. That’s as many as 7 million people deprived of health coverage they’re now enjoying, some of them for the first time.
The overwhelming question is how far Republicans think a dead-end, ideological opposition to the ACA will take them. It would be a fascinating question, if there weren’t so many lives at state. But for now, the rallying cry of both Republicans and Democrats should be: Make the deal!
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