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Why Obama thinks the Affordable Care Act can still be saved

He just might be right.

President Obama being interviewed by Vox on January 6, 2017.
President Obama being interviewed by Vox on January 6, 2017.
Kainaz Amaria/Vox

Barack Obama’s preferred candidate lost the 2016 election. But he hasn’t given up on the idea that his signature health care law can be saved.

Speaking to Vox’s Ezra Klein and Sarah Kliff in an exclusive interview conducted at Blair House Friday morning, he explained why.

Opponents of his law, he said, will finally have to “adopt the slogan of the great state of Missouri — show me.”

Time and again he returned to this theme. Now that they are running the show in Washington, Republicans can’t just talk, they need to act. For years they’ve promised that they can provide a better health insurance framework. And he doesn’t think they can. That’s why his advice to President-elect Donald Trump is that before moving forward with the repeal process, he should ask congressional Republicans to “come up with things that they can show that will actually make things better for people.”

If they can, Obama said, he thinks Trump will “find that there are a lot of Democrats out there — including me — who will be able to support it.” But, “so far at least, that’s not happening.”

That’s the key reality that can, perhaps, save the Affordable Care Act. Republicans have the numbers. If they can all hang together and agree on a legislative strategy, Democrats have no way of stopping them. But they do face two formidable obstacles that make the fight worth engaging with: You can’t beat something with nothing, and a party in power is responsible for results.

The GOP could pass a law that achieves key conservative ideological objectives or they could pass a law that addresses the public’s desire for cheaper premiums and more generous insurance programs. But there’s no way they are going to come up with an ACA replacement plan that does both of those things. Which means a critical mass of Republicans may well decide that discretion is the better part of valor and ultimately opt against repeal.

The GOP wants to avoid a substantive disaster

Politics is unpredictable. But the closest we can get to a sure thing is the knowledge that voters will be angry at the governing party if bad things happen on their watch. As a congressional majority party facing an opposition White House, the GOP was in a kind of accountability sweet spot. If they took votes that substantively undermined the Affordable Care Act leading to worse outcomes for the people it insured, they could blame Obama for these failures and reap political benefits.

Life looks different when you control the White House and you know that you are going to be blamed for bad outcomes. That changes thinking.

"Even people who voted for this before are, ‘Wait a minute, wait a minute, we knew that wasn’t going to happen,’" one Republican senator told Bloomberg’s Steven Denis. "There were no consequences." He further explained that now his colleagues are thinking harder about the details of different plans "because we’re going to own this."

That doesn’t mean they can’t repeal the ACA. But it does mean that if they do repeal it, most of them are going to want to do it in a way that doesn’t have an enormous negative impact on the lives of a large number of people. And while it’s relatively easy to think of legislative frameworks that fit that bill, these would overwhelmingly be “tweaks” or “fixes” that are designed to make the basic mechanism of the law work better rather than “replacements” for the framework.

Republicans have two contradictory critiques of Obamacare

There’s a basic problem for non-disastrous replacement: While the GOP has a reasonable political critique of the Affordable Care Act and the GOP also has a reasonable policy critique of the Affordable Care Act, those two critiques are in considerable tension with each other. On a political level, they want to say that the problem with the ACA is that it’s giving people plans that they can’t actually afford.

Jeff Flake (R-AZ), for example, said Wednesday night that when he talks to constituents in Arizona he inevitably ends up with a line of “people who will stand to tell me their Obamacare horror stories.” What kind of stories? Well, they tell him about “how their premiums have gone up, that they no longer have any options, or that they have had to pay the penalty, or that when they go to utilize their care they simply can’t afford the co-pays and deductibles.”

This is a very sharp criticism of the law, and it’s one that carries weight with a lot of people. Surveys of Obamacare enrollees consistently show that high deductibles are the number one complaint that people have with ACA plans.

As long as Republicans are simply messaging from the sidelines, this is great. But as a governing party they have a big problem: All of their policy alternatives offer coverage to fewer people and make the coverage that is offered less generous.

After all, it’s not a mystery why Democrats didn’t give everyone plans with cheaper premiums, lower deductibles, and smaller co-pays. Making the program more generous would have required more spending, and they were eager to keep the headline cost of the law under control. Republicans could easily solve these problems by embracing the idea of spending more, but on a policy level their big criticism of the Affordable Care Act is that it taxes and spends too much.

Delay doesn’t solve the problem

The way around this dilemma that most Republicans seem to have hit upon is what they call “repeal and delay.” This works by passing a law that repeals the ACA, but then delaying implementation by two or three or four years. At the time you pass the law, you say you will come up with a replacement later. And maybe you do or maybe you don’t, but either way the benefits will vanish at some future point after everyone’s already been reelected.

For many kinds of social programs, this sort of long-fuse approach to dismantling may work.

But the Affordable Care Act depends on the participation of private insurance companies in the government-run marketplaces. If Congress signals that the plug will be pulled in 2018 or 2019 or 2020, that will induce at least some private insurers to pull out. And it will ensure that states like Flake’s Arizona that are currently suffering from high premiums and weak competition won’t see any new plans enter.

That’s going to mean less choice, higher costs, and less coverage — right away.

Republicans can go forward with this plan and just try to blame Obama for the problems that arise. But that’s a pretty risky strategy. Voters tend to have short memories (often to a fault), as Democrats learned in 2010 when the electorate punished them badly for a severe recession that clearly started when George W. Bush was president.

Even worse for Republicans, enacting this big disruptive change means they’d be essentially on the hook for anything bad that happens in the health care system. As Obama said, throughout his administration whenever anyone had any dissatisfaction with any aspect of the American health care system, it “could be attributed to Obamacare even if it had nothing to do with Obamacare.”

Democrats have a real shot at saving the law

A small group of Republican senators — Susan Collins, Lamar Alexander, Rand Paul, and Tom Cotton — have already begun to voice doubts about the repeal and delay strategy.

Collins’s appearance on the list is in many ways not surprising. She’s the quintessentially moderate Republican, exactly the person you most expect to have doubts about some Republican plan or other. The other three, however, aren’t exactly squishes. What they have in common, as Josh Marshall notes, is that they represent poor states where Obama is incredibly unpopular but Obamacare is insuring a very large slice of the population.

If millions of low-income people in Arkansas, Tennessee, and Kentucky lose their coverage — which is exactly what will happen in a repeal and delay scenario — that will cause a broader wave of pain. The beneficiaries themselves, of course, will lose out. But so will doctors, hospitals, and other health care providers in the area. So will local retailers, who will suffer when the newly uninsured need to cut back on other expenses after health care costs devastate their pocketbooks. If Shelley Moore Capito, John Boozman, Bill Cassidy, John Kennedy, Mitch McConnell, and others take a close look at their states, they’ll see that they are in the same boat. Add to that Cory Gardner and Dean Heller who represent states that Trump lost, and there are plenty of senators who ought to be a bit nervous about repealing the law without a viable replacement.

Of course, all big legislative initiatives are calculated risks. Democrats took a political gamble — and lost — when they created the Affordable Care Act in the first place. They did it because expanding access to health insurance is a deep passion of a huge share of the people who choose to get involved in Democratic Party politics. For them, the cause was worth the risk. If Republicans are equally committed to taking insurance away, they have the numbers to get it done. But the risk is very real, members of Congress are getting cold feet for a reason, and Obama is right to think that his legacy can yet be saved.