Yes, NPR, Repealing Obamacare is Possible

NPR this morning ran a segment on the supposed difficulties that might be involved in repealing Obamacare. Folks who are interested in this question might want to check out a piece I wrote for NRO back in October 2011 laying out the steps involved in using a reconciliation bill in 2013 to repeal Obamacare (assuming Republicans keep control of the House, pick up a majority in the Senate, and take the White House). As the NPR reporter noted, some parts of Obamacare have already gone into effect, and repealers would have to decide which of those to keep intact. But the most significant and expensive components of the legislation certainly could and should be repealed in 2013.

posted by James C. Capretta | 5:53 pm
Tags: repeal, replace, reconciliation
File As: Health Care

It’s Not Just About the Individual Mandate

I have a new Weekly Standard article on the need not to focus exclusively on the individual mandate in undoing Obamacare:

Obamacare’s individual mandate — requiring that all Americans purchase government-approved health insurance beginning in 2014 — has always been the law’s most vulnerable provision. It is incredibly unpopular, and not just among conservatives. Polls consistently show that a large majority of the electorate opposes it, including a good portion of registered Democrats....

[However], even if the Supreme Court were to strike down the mandate, much of the rest of the law would almost certainly remain in effect. That’s unacceptable. Obamacare without the mandate is nearly as bad as Obamacare with it.

In the end, the fate of Obamacare will almost certainly be decided in the political and legislative arena, not the courts, and the 2012 election is likely to be the decisive battle in that regard. Keeping this in mind, Republicans and conservatives should be doing all they can to make the 2012 election another referendum on the damage Obamacare will do to the American economy and health system....

You can read the whole article here.

posted by James C. Capretta | 2:04 pm
Tags: repeal, individual mandate, Supreme Court
File As: Health Care

Freeze, investigate, then replace Obamacare

I have a new Op-Ed with James Wootton of Partnership for America in the Washington Examiner:

President Obama says he wants a grand bargain on the budget with no ideological "lines in the sand."

Yet he insists that the costliest and most controversial program in decades — the Patient Protection and Affordable Care Act (Obamacare) — be taken off the table. That won't fly. Congress should unwind the health law in three quick steps: freeze, investigate and replace....

Read the whole piece here.

posted by James C. Capretta | 1:27 pm
Tags: repeal
File As: Health Care

The Darkening Skies over Obamacare

In the last several days, every single Republican member of Congress, in both the House and Senate, voted to repeal Obamacare. And a federal judge has ruled that the law is unconstitutional. I have a short piece up on NRO today looking at the new political and legal realities that the legislation's supporters now face. Here's a snippet:

The Senate vote is also an indication of how close Congress is to passing a full repeal bill. Yes, it would have taken 60 votes to repeal it today in the Senate because of the point of order, and a likely Democratic filibuster if no point of order was applicable. But that need not be the case if Republicans regain control of the chamber in 2013. Recall that, in the aftermath of Scott Brown’s election to the Senate, congressional Democrats made an end run around the Senate filibuster by employing the “reconciliation” process to hammer out the final agreement between the House and the Senate. That allowed the Democrats to pass the original Senate version of Obamacare (passed when there were 60 Democratic votes in the Senate) through the House, and to pass changes to that previously approved Senate bill through both the House and the Senate with a simple majority vote. In other words, the only reason Obamacare is law today is that the Democrats used “reconciliation” to pass it through the Senate without the need for 60 votes.

The same could be done for repeal. As Keith Hennessey has pointed out, if Republicans regain control of the Senate in 2012 (which seems plausible, given the number of seats in play that are currently held by Democrats), and the House remains under Republican control, Republicans could dismantle Obamacare on a reconciliation bill, and they could do so without the need for any Democratic votes. Repeal would need only a simple majority to clear the Senate. There are now 47 solid votes for repeal. With a pickup of just four repeal votes, Republicans could send a full repeal bill to the president in 2013. And if the president is someone other than Barack Obama... Live by reconciliation, die by reconciliation.

You can read the entire piece on NRO here.

posted by James C. Capretta | 1:46 pm
Tags: Obamacare, Judge Vinson, repeal
File As: Health Care

Why Health Care Repeal Won’t Add to the Deficit

I have a new article up at the Wall Street Journal today with Doug Holtz-Eakin and Joseph Antos. It refutes the idea that repealing Obamacare will increase the deficit:

The Congressional Budget Office says repealing the Affordable Care Act would increase the deficit by $230 billion over the coming decade and by a modest amount in the decade after that. The CBO estimate has become the central defense by ACA advocates fighting the upcoming repeal vote in the House.

They might want to re-think their strategy. A close examination of CBO's work and other evidence undercuts this budget-busting argument about repeal and leads to the exact opposite conclusion, which is that repeal is the logical first step toward restoring fiscal sanity....

How, then, does the ACA magically convert $1 trillion in new spending into painless deficit reduction? It's all about budget gimmicks, deceptive accounting, and implausible assumptions used to create the false impression of fiscal discipline....

Read the full article here.

posted by James C. Capretta | 1:55 pm
Tags: repeal, federal budget
File As: Health Care

The Implications of Last Night

It’s important to start with the obvious: Yesterday marked the end of the hyper-activist phase of the Obama administration, and that’s no small matter. Republicans picked up an astounding 60+ seats in the House and now enjoy their largest working majority in decades. Moreover, the House will be quite conservative, with scores of new members elected on an explicit promise to limit the size and reach of the federal government. Come January, don’t look for the new House to go along with any of the ambitious and expensive federal programs, tax increases, and burdensome regulatory requirements that have marked the first two years of the Obama era.

Republicans also made impressive gains in the Senate, making it even less likely that any type of legislation will get enacted without at least some Senate Republican support. And with 24 Democratic senators up for reelection in 2012 — many of them in states much less friendly than the ones in which their colleagues competed this year — there will be opportunities for Republican senators to effectively control the fate of legislation if they are smart about building bipartisan coalitions.

Still, Republicans must understand that they are still the opposition party, without the ability to effectively govern the country. That has important implications.

For starters, it means that the health care war is really only just beginning. By all means, the House should press for full repeal. But it has always been the case that the decisive health care election was always going to be in 2012, at the presidential level. The only way the fight for repeal-and-replace can be won decisively is if a Republican presidential candidate runs on an explicit replacement platform, and wins. Then there will be a clear mandate to overturn Obamacare and move the nation’s health-care system toward consumer control and market competition. Republicans in the House and Senate should recognize this, and lay the foundation for the ultimate victory by highlighting the most unpopular and damaging aspects of what was passed.

On budget matters, Republicans in both chambers would be wise to take the long view. The greatest challenge Republicans face is making good on their commitment to actually implement real cuts in government spending. The politics always get much, much tougher when the conversation moves from the abstract of the campaign trail to the specifics of legislative language. Republicans must understand that real progress on fiscal matters in coming years will require building a durable center-right coalition that is strong enough to take the intense heat that always comes whenever real cuts are on the table for consideration. Consequently, House and Senate Republican leaders should resist the temptation to go it alone after last night’s victories. Instead, they should reach out immediately to those remaining conservative Democrats in the House and Senate who have expressed a desire to downsize government too, and work with them to implement serious budget discipline. That was the Reagan model for his 1981 agenda, and it worked. Of course, it will require some compromises, but those compromises (on details, not principles) will be worth it if the result is a bipartisan budget framework that can be contrasted with what will surely be a far more liberal tax-and-spend agenda coming out of the White House.

[Cross-posted at NRO here.]

posted by James C. Capretta | 1:23 pm
Tags: election, repeal, budget
File As: Health Care

There’s No Avoiding ‘Repeal and Replace’

In a new piece for National Review Online, I argue that the new legislators that November's election will bring to Washington must not, amidst all their other priorities, lose sight of the need to repeal and replace Obamacare:

Because the hard truth is that the proponents of a supersized welfare state believe they have already won the fight. Their vision is now the law, with the government on course to control the flow of resources in the entire health sector. Even if every other idea to downsize the government is enacted, Obamacare as passed has us on the road to unlimited government — with America’s middle class increasingly dependent on the benefits they receive from elected political leaders.

The Congressional Budget Office (CBO) estimates that Obamacare will add 35 million new people to the federal health-entitlement rolls by 2019, at a cost of $214 billion in that year alone. And that’s almost certainly a vast underestimate of the true costs. Douglas Holtz-Eakin — a former director of CBO and now president of the American Action Forum — and Cameron Smith have estimated that Obamacare will lead to much more migration out of employer-sponsored plans than assumed by CBO: Tens of millions of workers — and the firms that employ them — will figure out that all involved will be far better off with the workers getting the massive subsidies provided by the federal government in the so-called “insurance exchanges,” rather than with the much smaller tax break they receive for getting job-based insurance. According to Holtz-Eakin and Smith, an additional 35 million people are therefore likely to end up in the government’s new subsidized insurance system, on top of the 35 million already assumed by CBO in its cost estimate, putting the total entitlement expansion at 70 million, or more than Medicare’s total enrollment today. The additional enrollees will drive up the costs of Obamacare’s new premium subsidy program to $1.4 trillion over the first decade, or about $1 trillion more than CBO estimated.

And that would be just the beginning of it.... What’s needed to head off fiscal calamity is a market-based health reform that puts cost-conscious consumers, not the government, in charge. It’s the opposite of the Obamacare prescription....

You can read the entire piece here.

posted by James C. Capretta | 9:53 am
Tags: Repeal
File As: Health Care

The Repeal Windfall

As November approaches, Obamacare’s defenders are quite plainly desperate. They see public opinion solidly against them, and a devastating election fast approaching. Their latest gambit to protect what was jammed through Congress in March is to claim that repeal would be so costly to the federal budget that it would be impossible to pass, even with overwhelming popular support. That’s the spin some on the left put on a recent letter from the Congressional Budget Office (CBO) to Senator Mike Crapo.

But unfortunately for these advocates, that’s not what the CBO letter says. CBO’s message to Senator Crapo actually just states what is already obvious: If an effort were made to repeal just the Medicare cuts in the new law, it would, on paper, increase Medicare spending, and thus the federal budget deficit, by about $450 billion over ten years. Moreover, enacting a real “doc fix” to avoid deep and unrealistic cuts in Medicare physician fees will cost another $300 billion or so over the coming decade.

What this communication from CBO actually confirms, however, is that, contrary to White House assertions, Obamacare is a budget buster of the highest order. The claim that it would reduce the budget deficit over the coming decade has always rested on a series of gimmicks, implausible assumptions, and sleights-of-hand that have been exposed repeatedly over the past year, most especially by Congressman Paul Ryan in the presence of President Obama. Among the most egregious deceptions is the double- counting of cuts in Medicare’s reimbursement rates for hospitals and other providers of care — cuts so deep that they would push Medicare’s rates below those paid by Medicaid by the end of the decade. Even if these cuts were realistic — which they aren’t — they can’t both be used to pay for a new entitlement and to improve Medicare’s solvency, as the White House claims. The same money simply can’t be spent twice. Moreover, this money is almost certainly never going to materialize anyway because, as Medicare’s chief actuary has warned repeatedly, they would seriously reduce access to care for seniors by driving hospitals and physicians out of the program. It is all but inevitable, therefore, that Congress will step in at some point to reverse the “cuts,” and probably sooner rather than later. When that happens, it will only confirm what’s already abundantly clear — that these unsustainable payment reductions should never have been allowed to grease the way for a permanent and massively expensive entitlement program.

Indeed, contrary to latest spin from the left, not only would repeal not bust the budget, it would in fact produce a budgetary windfall of such enormous size that it could pay for a sensible reform of American health care and for deficit reduction too.

The centerpiece of Obamacare is the largest expansion of entitlement spending in a generation. CBO estimates that the new law will add 35 million people to the federal government’s health entitlement rolls by decade’s end — and that’s almost certainly a lowball estimate. Gross federal spending for this added entitlement burden, plus various other spending provisions in the bill, is expected to reach $233 billion in 2019 alone, and then grow at a rate of about 7 percent annually every year thereafter. That means Obamacare’s spending will total at least $3.4 trillion over its second decade, on top of the $1.1 trillion it will cost between now and 2019. And it’s likely to be much more than that when more realistic assumptions about employer dumping of coverage are factored into the estimates.

So that’s at least $4.5 trillion in federal spending that would be avoided over the next twenty years if Congress moved ahead with repeal. Even in Washington that’s a lot of money. So much in fact that it should be more than enough to gut Obamacare’s most egregious tax hikes and spending “offsets” while still paying for a sensible reform of American health care that actually cuts costs and covers more people. And even after enacting this kind of “replacement” program, there should still be something left over to put a real dent in the massive deficits projected to occur under the Obama budget plan.

A couple of weeks ago, the left’s message gurus put out the word to Democratic candidates to abandon talk of the supposed cost-cutting that would occur under Obamacare.

They now understand that the public has not, and will not, buy the argument that a government takeover of American health care will somehow lower costs. Americans have long understood that Obamacare is a massive new spending commitment, piled on top of the unaffordable ones already on the federal books. That’s a recipe for financial disaster, not deficit cutting. The solution is repeal coupled with a reform that puts consumers, not the government, in charge of controlling costs. That’s the way to fix health care—and the budget too. And, yes, it can be done.

posted by James C. Capretta | 6:47 pm
Tags: actuary, budget, doc fix, repeal, deficit
File As: Health Care