What will happen with Obamacare? President Trump’s Address Offers Hope to the GOP

With Republicans’ stunning sweep of the White House, House and Senate on November 8th, conservatives – and just about everyone else – believed that the Affordable Care Act, a.k.a. Obamacare, died along with Hillary Clinton’s presidential hopes. Even former President Obama himself realized that, and reportedly pleaded with his successor in a personal letter to preserve the law.

Fast forward several weeks, and the outlook over what will actually happen to the healthcare law remains murky. As always, it easier to govern in the abstract than on the ground.

On the one hand, there is a clear appetite to significantly change the current Obamacare structure. Prices are spiraling, insurers are dropping out of the health care exchanges like flies, and polls show that only a small minority of Americans believe that the law should remain as is. And, of course, Republicans – not a single one of whom supported the legislation – are all too eager to claim Obamacare’s scalp.

On the other hand, while Republicans have control over the government, they don’t have consensus. “Repeal and Replace” became the common buzzword, but repeal how much, and replace with what, remain open questions.

Republicans are cognizant of the political repercussions of terminating health care coverage for millions of Americans. Polls also show that a solid majority of Americans oppose full repeal, and rowdy protests at town hall events hosted by Republican Senators and House members intensified the pressure. Polls also suggest that Obamacare has ostensibly become more popular in recent months, likely as a result of fears that the law will be completely scrapped.

There is a consensus that any Obamacare reform retain the popular parts, such as access for patients with pre-existing conditions and subsidies to increase affordability for low and middle income Americans. How that can realistically be accomplished, while dramatically altering the law overall, remains a subject of intense debate.

In recent weeks, two camps emerged within the Republican Party on this issue. Exact details remain unclear, but the plan favored by establishment leaders such as Senator Mitch McConnell and House Speaker Paul Ryan relies on tax credits that increase with age to increase affordability; flexibility, but less funding, for states to maintain Medicaid coverage for those eligible through the Obamacare expansion; federal funding to subsidize costs for enrollees with pre-existing conditions; and encouraging free market competition for health insurance. The individual mandate and other key Obamacare regulations would be scrapped.

The more conservative wing of the GOP, led by Senators Rand Paul, Ted Cruz and Mike Lee; and the 40 member House Freedom Caucus; derided the establishment plan as a massive entitlement and “Obamacare Lite.” Details of the conservative plan remain murky as well, but it apparently will include a more limited offering of tax credits and health savings account (HSA) benefits, roll back the Medicaid expansion and encourage the use of high deductible “catastrophic plans” coverage for healthier Americans.

As Democrats are unlikely to cooperate in any GOP Repeal and Replace effort, if the conservative wing remains united, it can prevent passage of the establishment reform plan. Moderate Republicans would not go along with the more hard line version, so we have all the dynamics for quintessential Washington, DC, gridlock.

It is hard to overstate the Catch 22 that Republicans find themselves in. Their voters will be furious if they do not radically alter Obamacare when they finally have full control of the federal government. However, if they alter it in ways unpopular with moderate Republicans and independents, they would pay significant electoral consequences as well.

Ultimately, the ball is in President Trump’s court to bring both wings of his party in support of a common proposal. Both wings gain politically from fighting for their “principles.” It is up to the party leader, in this case the president, to coax them both into the same boat for the benefit of the party as a whole. President Trump of “The Art of the Deal” fame prides himself on being an extraordinary negotiator and dealmaker. He can, and must, prove his chops on this key issue.

Problem is, Trump himself has struggled to present a clear vision. He has sounded relatively liberal notes on the need to ensure affordable health care for everyone, and, during a famous primary debate exchange with Marco Rubio, failed to offer any specific proposal beyond allowing insurers to sell plans across state lines. Just a day prior to his address to a joint session of Congress, Mr. Trump remarked to the nation’s governors that “Nobody knew that healthcare could be so complicated.”

During his much heralded congressional address, however, the president did lay out some more details: Guaranteeing healthcare “access” for people with pre-existing conditions. Offering tax credits and expanded HSAs to increase affordability. Give states “resources and flexibility” in their expanded Medicaid coverage. Tort reform to protect providers from frivolous lawsuits. Reducing drug prices. And creating a marketplace for insurers to sell plans across state lines.

According to Politico, Trump’s principles were vague enough to have both the establishment and conservative wings of the Obamacare debate declare that the president was winking in their direction. Of course, keeping both sides happy when negotiations get more specific and substantive is a whole lot more difficult.

Trump’s performance at the healthcare negotiating table in the months ahead may very well determine the legacy of his first two years in office and the fate of Republican candidates on the 2017 and 2018 ballots.