Barring sudden change in heart by the GOP, Obamacare is dead and gone in 2017, folks. What will come after it is now the important fight once Republicans decide how to dismantle the Affordable Care Act and move forward with their crusade. And as Jon Chait reminds us, what will come after is most likely "absolutely nothing".
So how will Republicans handle it? One possibility is to compromise with Democrats. Republican staffers speaking to reporter Caitlin Owens said they would not use the repeal bill their party had sent to Obama endlessly for vetoes. (“We’re not going to use that package. We’re not dumb,” said one.) They described their approach as “more massive reform” and “a rewrite of Obamacare.” The plan they loosely describe would keep Obamacare’s structure, and change the law to make it friendlier to Republican priorities. They could strip out some of the essential benefits required by the law. They could allow insurers, who are now allowed to charge older customers no more than three times as much as they charge a young one, something more (like, say, five times as much). And they could change the subsidies in a more Republican-friendly way — which generally means making them more generous to the affluent and stingier for the poor. This kind of compromise would impose a lot of hardship on vulnerable people. (A good summary of the impact of these changes can be found here— it would hurt more people than it would help.) But it might attract some Democrats eager to sustain some kind of safety net for the health-care system. Republicans could satisfy the blood lust of their base by framing this as a “repeal” of the law and a replacement with a somewhat altered version.
After he met with President Obama, Trump seemed to endorse a version of this strategy. “We’re going to do it simultaneously. It’ll be just fine. That’s what I do. I do a good job,” he said. “We’re not going to have like a two-day period and we’re not going to have a two-year period where there’s nothing. It will be repealed and replaced. It’ll be great health care for much less money.” As is often the case, Trump’s verbiage did not convey any clear and definable course of action. But to the extent meaning could be extracted, he was promising not to pass a quick repeal bill or to wreck the law completely.
Yet such a course of action seems likely to enrage conservative activists, who could ignite a firestorm of protest against the sellout leadership capitulating to nefarious congressional Democrats. Indeed, much of the conservative movement has invested itself heavily into the notion that Obamacare is an act of singular evil that must be destroyed — the very impulse that prevented Republicans from negotiating on the law in the first place.
And so a second course of action seems more likely. Republicans would quickly vote, through a reconciliation bill, to dismantle the law’s subsidies. They could do this in a massive reconciliation bill that also advanced other priorities, like a large upper-bracket tax cut, cuts in spending on anti-poverty programs, defunding agencies that regulate Wall Street, polluters, and so on. But the defunding of Obamacare would be delayed for two years, until after the 2018 midterm elections, to shield the GOP from the political impact. In the meantime, Trump could deliberately impair the law’s functioning through administrative action, so that the exchanges lost customers rather than gained them.
This plan would give Republicans two more years to design their alternative. By 2019, they would likely have eliminated the filibuster over some other dispute. If not, eliminating the law might give them leverage to try to force Democrats to participate in some kind of ultra-threadbare replacement plan. The leverage would be that, if they fail to support it, Obamacare would disappear without anything at all taking its place. When thinking through the Republican Party’s incentives, the option that makes the most sense is the immediate repeal vote with a two-year delay before it takes effect.
In other words, defund Obamacare subsidies immediately, blame Democrats when the individual market and state exchanges collapse and red state voters get out the long knives to decapitate the remaining Senate Dems in 2018, and then come up with a "new" plan in 2019.
It's a smart plan. Sure, it'll cost tens of millions of Americans health insurance and affordable care and some of them won't be around in 2019 as a result, but hey, it'll be Obama's fault.
Voters have repeatedly rewarded the GOP for behaving like this. Why would they stop now?