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Republicans Can Escape Their Obamacare Trap

Jonathan Bernstein is a Bloomberg View columnist. He taught political science at the University of Texas at San Antonio and DePauw University and wrote A Plain Blog About Politics.
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What will happen if Republicans gain the votes -- including the big one in the Oval Office -- to do what they want to do to Obamacare? For a clue, look at what’s happening in Kentucky. 

Recall that the state’s new governor, Matt Bevin, is a Tea Partyer who fulminated against the Affordable Care Act in his campaign last fall and promised to get rid of it. 

In the brief period he has been in office, Bevin has made two decisions on Obamacare. He’s getting rid of Kynect, the Kentucky health-insurance exchange, meaning he's inviting the federal government in to run the state’s marketplace. And he has reversed his pledge to quash Medicaid expansion. Instead of repealing it, he’s now talking about reforming how Kentucky administers the expansion instead.

The question of who runs Kentucky’s exchange doesn’t matter much, so his “bold” action will have little effect. But on Medicaid, his decision to punt will matter a lot. Lots of voters in the state get to keep their insurance.

The lesson, then, is that as much as Republicans hate “Obamacare,” they can live with the basic structure of the Affordable Care Act: Medicaid for the least able to pay, government-run exchanges for buying private insurance, and a gentle nudge away from employment-linked insurance.  

No, a Republican-run Affordable Care Act wouldn’t be identical to what we have now. We’ll always have fights over proper subsidy levels, and whether Medicaid should be run with an emphasis on preventing fraud or on providing access. Democrats are going to want to regulate what doctors, hospitals and insurers do more than Republicans will. Republicans are more comfortable with unfunded programs than Democrats are, so the taxes will be reduced or eliminated.

But the basic structure will remain.

The remaining problem for Republicans is their hatred of Obamacare, and their voters’ professed hatred of it too. I’ve written that the best Republican “replace” plan would be just “repeal” everything and then reintroduce identical programs -- but with nice Republican names.

So instead of the Obamacare marketplaces we could have, say, Ayn Rand Enterprise Zones for health insurance. Instead of the individual mandate, how about Freedom Patriotic Incentives? Everyone who enrolls is promised a tax rebate (which would function exactly the same as requiring a fine on all who don’t enroll).

Replace the Cadillac tax on expensive employer-supplied plans and replace it with … well, most likely Republicans will just eliminate Obamacare taxes and blow up the deficit. But they could repeal subsidies for middle-income policy holders on the exchanges and replace them with, let’s see, Ronald Reagan Means Tested Vouchers. And instead of Medicaid expansion, call it American Exceptionalism Health Care.  

Would that do the trick? Sure, if a new Republican president could keep the backbenchers in Congress on board. Since most of the outrage was phony in the first place, a phony repeal and replace should work well enough. 

  1. Gradually moving away from a system based on employment-linked insurance is both an underlying idea behind several Obamacare provisions and, it happens, the core of many Republican reform ideas. It is true that many Republicans oppose on principle the entire idea of government-backed universal health care, but in practical terms that fight is over. The mechanisms of the Affordable Care Act arent a problem for them. 

  2. I have to admit: In this case, calling it American Exceptionalism would be accurate.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:
Jonathan Bernstein at jbernstein62@bloomberg.net

To contact the editor responsible for this story:
Katy Roberts at kroberts29@bloomberg.net