What’s the Next Step for Health Care Reform?

What’s the Next Step for Health Care Reform?

The new, Republican-majority House of Representatives will likely attempt to repeal Obamacare, a move which will undoubtedly be blocked by the Democrat-controlled Senate. Barring that, President Obama will use his veto pen to save the Democrats' crown-jewel policy achievement.

Having health care as a campaign issue may actually be a blessing for the GOP, however. It was the single most important reason for their historic gains in the midterm election. Obamacare has been a gift to the Republican Party.

If appropriately managed, it's a gift that can keep on giving.

Unimplemented Albatross

The really bad features of the law (mandates for individuals, fines for employers, federal regulation of everyone's insurance, government-run health insurance exchanges) don't kick in until 2014. In the meantime, Republicans don't really lose very much if the best argument for voting for them in the 2012 election remains in place.

On the other hand, health care reform is an albatross hanging around Democrats' necks. And as long as it's there (especially if it's never really implemented), it will cost the Democrats many congressional seats. If the start date keeps getting pushed back, Obamacare will be a big issue in every election. This would be a nightmare for the Democratic Party.

There is precedent for this. Under the Balanced Budget Act of 1997, Medicare growth was supposed to be slowed by the gradual ratcheting down of payments made to doctors. Yet Congress has voted to delay the cuts every year except one. The so-called "doc fix" returns for doctors and the American Medical Association (AMA) every time we have an election.

Repealing Unpopular Features

Republicans should begin by voting to repeal the most politically unpopular features of Obama’s health care bill. That means no individual mandates, no individual or employer fines, and no regulations of the type that might cause McDonald's to drop coverage for 30,000 low-wage employees and the 3M Corporation to drop coverage for all its retirees.

If there is a budgetary cost for these measures, the can be paid for by pushing back what I am going to call O-Day. That's the day (Jan. 1, 2014) when all the subsidies and mandates are supposed to kick in.

Then Republicans should come to the rescue of senior citizens. If nothing is done, Medicare will have to reduce its payments to doctors by 29.6 percent on January 1, 2011. According to the Medicare Actuaries, Medicare payments to doctors and hospitals will fall below Medicaid rates by the end of the decade.

Medicaid's low rates make it difficult for low-income families to find any private-practice doctor who will see them. As alternatives, they often turn to community health centers and safety-net hospitals. Now imagine seniors having to do the same thing, but being pushed to the rear of the waiting lines, as even poor people (with their Medicaid cards) pay the doctors more than what Medicare will pay for the elderly.

Postponing O-Day Permanently

The short-term goal should be to push back the dates of these rate cuts by an election cycle or two, pushing back O-Day in order to pay for them. O-Day could be postponed again and again. If the Democrats resist, in each election the central issue will be: Do we want to put seniors on an ice floe in order to provide health insurance for young people?

If the Democrats never yield, Republicans will eventually build up veto-proof majorities, even if Barack Obama is reelected President.

What has created such a rich opportunity for the GOP on health care is the Democrats’ huge miscalculation in putting the Obamacare bill together. Through all the coming debate, the Republicans should never forget their principles. A smart GOP will not merely exploit the weaknesses of Obamacare, it will also get firmly behind a health-care reform approach that its members will seriously be prepared to enact if the Democrats will agree.

Some have suggested using the House's control of the budget to deny funding for the program. If that's all the Republicans do, they risk being seen as obstructionists and labeled "the party of no." Republicans should be committed to making health insurance portable, affordable, and fair and show a willingness to solve our most important health care problems by removing perverse incentives, empowering individuals, and letting competition in a free marketplace control costs and improve the quality of care.

John C. Goodman (john.goodman@ncpa.org) is president and Kellye Wright Fellow of the National Center for Policy Analysis.