Obamacare is closer than ever to being repealed. Congressional Republicans recently took one of their most assertive actions against it to date, while the centerpiece of the Obama presidency is playing out even worse than most of its opponents predicted. What’s missing is a presidential contender willing to run on an alternative to Obamacare. Whoever steps up with a replacement plan that is at once conservative and general-election-ready is likely to reap rewards from grateful Republican voters and, soon after, the wider electorate.
That's because Obamacare, always poised to be a disaster, is now becoming one. Obamacare supporter Charles Gaba calculates that premiums in the Obamacare exchanges have risen some 12 percent nationally from last year to this. Last spring, the Congressional Budget Office predicted that 21 million people would buy insurance through the exchanges by the end of 2016. The Obama administration now says it expects that number to be 10 million — less than half the CBO's estimate. Americans aren't exactly lining up for expensive insurance with narrow doctor networks — even when they're mandated to buy it.
Not only are customers shying away from the exchanges, so are insurers. The University of Houston's Seth Chandler reports that, of the 36 PPO or POS plans (plans that grant access to wider doctor and hospital networks) available on the exchanges in Houston in 2015, not one remains available in 2016. UnitedHealthcare, the biggest insurer in the country, announced in November that it may withdraw from the exchanges altogether in 2017 thanks to "higher risks and more difficulties," and other insurers are raising similar flags. Aetna recently wrote to the Obama administration, "Unless some fundamental flaws are corrected, we believe there is a grave risk that the federal exchange will not operate as a viable, competitive market in 2017."
Blue Cross and Blue Shield told regulators that Obamacare markets are being undermined by "special enrollments" that let consumers "purchase coverage only when they need medical care." According to Politico, the Blues calculate that "exchange customers who sign up during special enrollment periods are 55 percent more expensive than their counterparts who enroll during the regular season." Those who sign up as special enrollments — a quarter of Aetna's Obamacare business — often don't pay premiums for long but, while on the plans, have "unusually high claims generation."
Politico put it bluntly: "Obamacare customers are gaming the system, buying coverage only after they find out they're ill and need expensive care."
This isn't a glitch in Obamacare; it's a core feature of the law. As President Obama never tires of saying, Obamacare keeps insurers from denying coverage to those with expensive preexisting conditions. So why buy insurance while you're healthy when you can wait until you're sick or injured?
Isn't that where the mandate to buy insurance is supposed to come in? Yes, but the penalty is generally cheaper than the insurance. Besides, there is a 90-day "grace period" for those who stop paying their premiums, and "many people have figured out they need pay for only nine months to get a full year of coverage," Politico reports. "An enrollee might buy an [Obamacare] policy, get their health needs addressed and then let their coverage lapse — without having to pay the penalty for being uninsured."
As Obamacare continues to spiral downward, congressional Republicans have finally started to pick up their game. They recently sent a bill to Obama's desk, for the first time, that would repeal most of the president's health care law — doing so using the same "reconciliation" process that Democrats used to get Obamacare across the finish line in 2010. That process allows senators to circumvent the filibuster and pass budget-related legislation through the chamber via a simple majority vote.
The president vetoed the bill, of course, but Speaker Paul Ryan struck a refreshingly defiant tone, more reminiscent of his own splendid opposition to Obamacare in 2010 than of anything we've heard from congressional leadership since: "The idea that Obamacare is the law of the land for good is a myth," Ryan said. "We have now shown that there is a clear path to repealing Obamacare without 60 votes in the Senate. So, next year, if we're sending this bill to a Republican president, it will get signed into law."
Then again, even with a Republican president in office there wouldn't be nearly enough Republican senators willing to repeal Obamacare in the absence of presidential leadership and, most importantly, a compelling alternative.
Happily, at this point what a winning conservative alternative would look like is hardly a mystery. It would address the unfairness in the tax code — which has long played favorites by giving a tax break to those with employer-based insurance while denying a tax break to those with individually purchased insurance. It would address this inequity without affecting the typical American's employer-based plan. It would offer a tax break in the individual market that isn't income-tested. It would get the government out of the business of providing direct subsidies to insurance companies. It would provide an answer to preexisting conditions that doesn't undermine the very notion of insurance. It wouldn't neglect the poor. It would result in more people having private health insurance than under Obamacare. And it would cut spending by more than $1 trillion over a decade versus Obamacare.
Ed Gillespie ran on such an alternative in his 2014 Senate race in Virginia and nearly erased his opponent's double-digit lead in the process. Obamacare is a clear winner for the GOP, as the elections of 2010 and 2014 have shown. The question is whether any candidate will realize it's the ticket to the nomination and to the White House in 2016.