The end of Obamacare, or not.

So the 115th Congress was sworn in this week.  And with the new Congress, and in two weeks the new President, brings about a time where Republicans will be finally able to do all the things they have said they want to do.  Building walls, raising tariffs, getting rid of environmental regulations are all high up on their list.    However there is one issue that trumps them all, the Affordable Care Act, or Obamacare.

Republicans have repeatedly stated that their highest priority is to fully repeal Obamacare and then to replace it with something better.   In 3 weeks they will have their first chance to realistically do so as they will have a President that ostensibly wants to see Obamacare repealed, although it is far from certain he will ultimately sign on.   And the Senate took the first step towards that goal by passing a filibuster proof bill that could defund Obamacare.

Now this bill doesn’t actually do anything in itself.  It paves the way to defunding Obamacare but doesn’t actually repeal Obamacare.  It takes away a lot of the major aspects of the law by taking away the funding for them.  But in itself it doesn’t do anything.  It simply ended the opportunity to filibuster a defunding bill.  The bill CAN’T repeal Obamacare because the procedure the Republicans are using to attack Obamacare can only be used for bills related to funding and taxes.

So the Republicans could theoretically end Obamacare in 3 weeks.  However, they are quickly being reminded that being in charge is quite different than being in opposition. While Obamacare, as a label, is generally unpopular, the core aspects to Obamacare are very popular.  Protecting people with pre-existing conditions and being able to provide health care to children up until 26 years of age has proven to be VERY popular.   The protections for pre-existing conditions are particularly difficult to keep though, if you eliminate Obamacare as it creates a free rider problem.

The bigger problem for Republicans is the roughly 20 million people who get subsidized health care via Obamacare.  There has been a lot of talk about the massive increases in Obamacare premiums but those increases will not impact most people using Obamacare plans.  However if you take away those subsidies, those 20 million people will see MASSIVE increases in their health care.   Some people could see their health insurance increase 5 or 6 fold in cost. In most cases they will be unable to pay for health insurance again and will simply drop it.   It will be very hard for Republicans to explain away how they were responsible for 8% of the population losing their health insurance.

Further compounding the problem for Republicans is the regulatory framework and how it impacts health insurers.  As mentioned above, Republicans can’t remove the regulatory framework without risking a filibuster.  And that regulatory framework will be onerous for insurers if the individual mandate is removed.   Keeping the pre-existing condition protection would allow younger people to wait until they got sick before getting health insurance.  For those of us who have pets, we can buy health insurance for our pets but only when they are young. Precisely for the same reason.  Furthermore, there are strict limits on how much money insurers can make on insurance plans and what those plans can do, regardless of whether they are exchange plans or employer provided plans.  Insurers accepted all of this on the basis that there would be fewer free riders.

So repealing Obamacare is far more treacherous for Republicans than their rhetoric would suggest.   And for risk averse Congresscritters, repealing Obamacare simply isn’t worth it much like the attempted reform of Social Security wasn’t back in 2005.  They will see severe backlashes from both voters and powerful lobbies and have nothing to show for it.

So what happens now?   My best guess is a lot of sound and fury signifying nothing.  Republican leadership will slow play the repeal with lots of excuses until a time when their base forgets that they hate Obamacare.  The Republican Party used Obamacare as a political weapon and have put themselves in a difficult position.  So they really have no one to blame but themselves.


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