A Court Rebuke, Then Effective Repeal and Replacement?

Obamacare by from The Weekly Standard, March 4, 2015

Five years ago this month — on the night the Democrats passed Obamacare through the House without a single Republican vote — Paul Ryan proclaimed on the House floor, “This moment may mark a temporary conclusion of the health-care debate, but its place in history has not yet been decided.  If this passes, the quest to reclaim the American idea is not over.  The fight to reapply our founding principles is not finished.  It is just a steeper hill to climb, and it is a climb that we will make!”

Americans’ opposition to Obamacare cost Democrats 63 House seats that fall (the most they had lost while also losing control of the chamber since the 19th century) and put Ryan’s party in the majority.  Now chairman of Ways and Means, he and his fellow committee chairmen Fred Upton (Energy and Commerce) and John Kline (Workforce) have just penned an op-ed for the Wall Street Journal that will help America continue its climb back from that dark night in March 2010.

The three chairmen write:

“On Wednesday the Supreme Court will take on yet another legal challenge to the president’s health-care law, when the justices hear oral arguments in King v. Burwell.  If the court rules against the administration, as any fair reading of the law would demand, millions of individuals and families will hit a major roadblock:  They’ll be stuck with health insurance designed by Washington, D.C., that they can’t afford.  Americans should have an off-ramp from ObamaCare — a legislative alternative that leads them away from an expensive health-care wreck and toward a patient-centered system.”

At least 36 states stand to be affected if the Court rules that the Obama administration has been lawlessly paying out subsidies.  Ryan, Upton, and Kline propose to allow each of those states, in response to such a ruling, to choose whether to switch to a conservative alternative that would effectively repeal and replace Obamacare in that state.  (Any of the other 14 states could choose to switch as well.)

The chairmen’s proposal would restore liberty and reduce costs by letting states opt out of Obamacare’s costly insurance coverage mandates, its job-thwarting employer mandate, and its unprecedented individual mandate.  And it would address the longstanding inequality in the tax code — whereby those with employer-based insurance get a tax break while millions who buy insurance on their own do not — by offering a tax credit to those who buy insurance through the individual market.

The piece doesn’t specify the value of the tax credits, but it says they would be refundable (available to the poor and near-poor who pay little in taxes and are almost the sole focus of Obamacare) and age-based.  The 2017 Project Alternative proposes flat, refundable, age-based tax credits of $1,200 for those under 35 years of age, $2,100 for those between 35 and 49, and $3,000 for those 50 and over — plus $900 per child.  The nonpartisan Center for Health and Economy scored that alternative and found it would increase the number of people with private health insurance by six million versus Obamacare while saving $1.1 trillion in federal spending over a decade.

Similar flat tax credits that go to every American who buys insurance in the individual market would likely produce similar results, while offering a tax cut to millions of middle-class Americans who get nothing under Obamacare but the tab.  Republicans who have been struggling to discover a Main Street agenda may finally have found the centerpiece of one.

Recent polling by McLaughlin and Associates, commissioned by the 2017 Project, suggests that the House chairmen’s approach is right in line with what Americans want to see Congress do.  The poll, which included 38 percent Democrats and 32 percent Republicans, asked, “If the Supreme Court rules that the Obama administration has been illegally paying out Obamacare subsidies in 36 states, what do you think Congress should do in response?”  It also asked, “What is the worst thing that Congress could do in response to such a ruling by the Supreme Court?”

Subtracting respondents’ least favorite answers from their favorite answers, these were the most popular replies:

  1. “Give the states a choice between Obamacare and switching to a conservative alternative that aims to help people get coverage and reduce costs”: 25 percent favorite choice, 8 percent least favorite choice,+17 point net.
  2. “Propose to effectively repeal and replace Obamacare in those 36 states with a conservative alternative that aims to help people get coverage and reduce costs”: 26 percent favorite choice, 18 percent least favorite choice,+8 point net.
  3. “Negotiate fixes to Obamacare with the Obama White House in exchange for turning the subsidies back on”: 20 percent favorite choice, 18 percent least favorite choice,+2 point net.
  4. “Turn the subsidies back on temporarily but don’t try to fix Obamacare”: 5 percent favorite choice; 8 percent least favorite choice,-3 point net.
  5. “Do nothing and let people in those 36 states lose their subsidies and perhaps their insurance”: 4 percent favorite choice, 39 percent least favorite choice,-35 point net.

Among Republicans and independents, the chairmen’s proposed course is even slightly more popular (+19 point net with each).  Meanwhile, 46 percent of Republicans think the do-nothing approach is the worst possible course of action, while only 7 percent favor it.

It is encouraging to see such leadership from House Republican chairmen on this issue.  With the prospect of a flat tax credit on the table, repeal is starting to appear on the horizon.

Jeffrey H. Anderson is executive director of the 2017 Project, which is working to advance a conservative reform agenda, including a Winning Alternative to Obamacare.

© 2015 Weekly Standard LLC. Reprinted with permission.