The Fight Over Obamacare Moves to the States
Ever since the Republican-led Congress and Trump administration eliminated Obamacare’s unpopular individual mandate in December, anyone carefully observing the health-care landscape can see both parties are gearing up for an epic battle over Obamacare’s future.
Thankfully for those of us who support individual liberty, advocates of big government in the Democratic Party are now openly touting their left-wing health-care strategies and goals, rather than employing the deceptive tactics they usually take. Whether by accident or purposefully, Democrats are providing the Trump administration and states interested in dismantling Obamacare advanced notice and ample time to prepare suitable responses should liberals once again rise to power in the near future. And this kind of “transparency” is just what the Republicans need to successfully implement solutions to the debacles Obamacare has created.
Since Republicans failed to repeal and replace Obamacare when they had the chance in 2017, many have, rather wisely, decided to shift the battleground to the states. And by doing so, they have vastly increased the number of the arrows available in their quiver. From promoting the adoption of short-term insurance plans that roll over every 12 months (as opposed to the late-term Obama administration rule change that shortened that period to three months) to seeking ways to make 1332 innovation waivers (which allow states to opt out of certain burdensome provisions if they can find new ways to offer insurance) easier to obtain, Obamacare is dying a slow death in many states.
Expanding short-term plans, according to Health and Human Services (HHS) Secretary Alex Azar, will help states keep the currently uninsured from entering into costly Obamacare exchanges. This is necessary, as Azar argued at a budget hearing before Senate Democrats last Thursday, to stave off premium hikes insurers are threatening to impose at the state level to make up for the lost revenue that would come with the now-eliminated individual mandate penalty. If fewer people enter the exchange, premiums won’t rise as much.
Another state-level reform gaining traction is the 1332 innovation waiver, which permits states to opt out of some costly, burdensome Obamacare exchange rules if they provide residents with other innovative health insurance options. The waivers last for a period of five years.
Sens. Lamar Alexander (R-TN) and Susan Collins (R-ME) are reportedly in talks with Centers for Medicare and Medicaid Services (CMS) Administrator Seema Verma to discuss how CMS can work with states to implement other much-needed reforms, possibly using administrative rule changes.
President Donald Trump, via the Food and Drug Administration (FDA), is also set to unveil the Drug Competition Action Plan. This “makes the approval process for generic drugs more efficient, encouraging lower prices through robust competition,” according to Azar, FDA Commissioner Scott Gottlieb, and Verma, who made the announcement in an op-ed for Fox News. The drug pricing plan is four-fold: (1) HHS plans to increase competition in drug markets; (2) HHS will allow enhanced negotiating over Medicare Part D plans on behalf of seniors; (3) HHS will incentivize drug manufacturers to lower list prices; and (4) new options are being formulated to lower out-of-pocket costs for consumers.
While Republicans disassemble Obamacare at the state level — and through some high-level, federal maneuvering within agencies — Democrats are desperately trying to save President Barack Obama’s legacy law. At the moment, they’re dedicated to making sure the Trump administration is blamed for any premium spikes because of the elimination of the individual mandate penalty; liberals are planning on making it a central issue in the 2018 midterm elections.
Although it’s unlikely that Obamacare-related legislation will soon pass Congress, Democrats are nevertheless developing five bills to expand Medicaid and Medicare and further erode the limited number of free-market aspects of the health-care system that remain. Republicans should steer clear of such policies, which have been proven repeatedly to result in disaster. They should instead pass reforms that would increase consumers’ health-care choices and let the results speak for themselves.
Sarah Lee (Slee@heartland.org) is a health care research fellow for The Heartland Institute.