Last Tuesday the Republican majority in the House or Representatives, with the help of four Democrats, voted to repeal the health care reform package passed last year. However, in their “Pledge to America” in 2010 Republicans promised to “repeal and replace” the health care reform bill. Republicans can now at least say they gave a good faith effort at the repeal part of that promise, but the “replace” portion of the pledge remains unfulfilled.
The Republicans have known that they will take over the House now for over two months, yet still no comprehensive plan has come forth. Speaker Boehner has said that he will assign the job of coming up with a replacement to his committee chairs, but also said there will be no deadlines on the committees. By all appearances the Republicans seem to have no interest in replacing “ObamaCare” with anything, and there are many reasons why.
First, it will be very hard for Republicans to repeal the part of reform that Americans actually want them to repeal. The most unpopular provision of the health care reform package is the individual mandate, under which individuals must purchase insurance or face a tax penalty starting in 2014. Republicans could try and repeal this provision, but in doing so they would be running up against a powerful lobby (the health insurance industry) which just happens to make significant campaign contributions to the Republican Party. The individual mandate is the one provision that the health care industry fought for. Without the individual mandate it would make sense for every individual to not purchase insurance, wait until they get sick, and then buy the best insurance policy they can find. If the rest of the health care reform package stays in place, insurance companies could not use pre-existing conditions to exclude consumers.
Which brings us the second problem Republicans face. The GOP has said they like certain aspects of the health care reform package including:
- The ban on pre-existing condition exclusions
- The closure of the “donut hole” in Medicare Part D
- Tax credits for small businesses to help them buy insurance for their employees
The problem for the GOP is that all three of these provisions cost money. As discussed above, insurance companies are only willing to cover people with pre-existing conditions if all Americans are forced to purchase insurance. Closing the “donut hole” and paying for tax credits is done through new taxes, such as a tax on tanning beds, and cuts to Medicare Advantage. If Republicans extend some parts of ObamaCare without also extending some of these tax cuts or cutting from Medicare Advantage they will end up adding to the deficit.
Such is the difficulty in crafting any health care reform package. Expanding coverage while simultaneously remaining deficit neutral are two contradictory goals. Now that Americans are beginning to experience the increased coverage from “ObamaCare” they are not going to want the GOP to take it away. At the same time, Republicans face a Tea Party base which will not put up with any plan that increased the deficit. What this practically means is that Republicans will likely punt the “replace” part of their pledge as long as possible.