House Republicans are currently aiming for another shot at Obamacare repeal before a two-week congressional recess starting next week. While the fine details of the proposed new bill are still in negotiations, several sources are suggesting that the bill’s key distinction from last month’s failed attempt will be a clause allowing states to opt out of some of Obamacare’s most costly provisions.
This may seem like good news for fiscal conservatives at first glance, but let the buyer beware: the proposed bill is not a full repeal of Obamacare. Instead, it simply deflects decision-making authority to the states, many of whom accepted Medicaid expansion and are thereby unlikely to repeal Obamacare’s onerous regulations.
According to Politico, the focal point of current negotiations centers around Obamacare’s community rating protection, preventing insurance companies from charging sick people significantly higher premiums than healthy people for the same policy. Unsurprisingly, this provision has been one of the main sources of Obamacare’s premium spikes, as premiums for many healthy people increased, sometimes dramatically, to subsidize the sick.
House Freedom Caucus Chairman Rep. Mark Meadows, R-N.C., told reporters yesterday that the new bill could also allow states to opt out of Obamacare’s “essential health benefits,” requiring all insurance plans offered in state exchanges to cover a laundry list of services including maternity care, substance abuse treatment and mental health services. This provision was another major source of premium hikes, as exchange customers could not choose cheaper plans that left out services they did not need.
Taken together, eliminating Obamacare’s community rating and essential health benefits are great ideas to lowering insurance costs to consumers. However, leaving it to the states to pick and choose which regulations to keep or ditch would lead to widely varying insurance markets across the country.
Some states, for instance, will choose to repeal all of Obamacare’s regulations, leading to cheaper premiums for the healthy and potential insurance losses for the sick. Others will choose to keep all of Obamacare’s provisions in place, maintaining expensive insurance for the healthy and major subsidies for the sick. Either case is not ideal.
GOP leadership should not be so confident that red states will be eager to repeal Obamacare’s regulations, either. Many Republican stronghold states chose to expand Medicaid after the Supreme Court’s landmark 2012 Obamacare decision gave them the option not to — among them, Arizona, Arkansas, Iowa, Indiana, Kentucky, and North Dakota. The fact of the matter is that many so-called conservative state legislators are reluctant to swallow the bitter pill of repealing an entitlement their constituents count on for coverage.
Indeed, one major risk of the current proposal is that most states could choose to keep most of Obamacare in place, oddly enough through a bill that masquerades as a repeal. Meanwhile in Washington, congressional Republicans will have coverage from the political fallout by blaming the states when things go awry.
Instead of risking coverage losses for the most vulnerable populations, congressional Republicans should roll up their sleeves and work on a full repeal-and-replace plan. The current state cop-out being considered is simply a way for congressional Republicans to protect their conservative credentials while the states embrace the Obamacare regulations they claim to hate.
Casey Given (@CaseyJGiven) is a contributor to the Washington Examiner’s Beltway Confidential blog. He is the executive director of Young Voices.
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