Sep 30, 2013, Vol. 19, No. 04 • By JOHN MCCORMACK
Since January 2011, Republicans have tried to repeal Obamacare, in whole or in part, more than 40 times. That number is recited with a predictable sneer by congressional Democrats and the Washington press corps each time a new vote is held. The mockery is meant to obscure the fact that Obamacare is a dysfunctional and unpopular law. It’s supposed to make you forget that Republican efforts have actually succeeded in repealing parts of the law, such as the boondoggle known as the CLASS Act. The sneers are supposed to convince Republicans and the majority of Americans who oppose Obamacare that their efforts are futile.
Republicans shouldn’t give up the fight. With the weight of Obamacare set to crash down on the country in the coming year, now is a perfect time for members of Congress to try again to protect the American people from all or some the law’s harmful effects. Republicans may lack control of the Senate and the White House, but they should continue to fight for whatever they might be able to achieve, such as attaching anti-fraud measures to Obamacare or delaying the individual mandate so long as the business mandate is delayed.
Some in the GOP have unfortunately embraced a fatalistic view of Obamacare this summer. “The surrender caucus” is what Senator Ted Cruz calls his colleagues who oppose a plan to defund Obamacare by threatening to force a government shutdown. But in reality, skeptics of the defund-or-shutdown plan didn’t spend the past two months raising the white flag in the battle against Obamacare. The freshman senator from Texas did.
“If this goes into effect on January 1, we will never, ever, ever get rid of it,” Cruz told the audience of the Laura Ingraham radio show. “We either do it now or we surrender entirely,” he warned on Sean Hannity’s program.
Why will it become impossible to stop Obamacare after January 1? That’s when Americans will become “hooked on the subsidies, addicted to the sugar,” Cruz told a Tea Party gathering in his home state on August 19, according to the Texas Tribune. “If we get to January 1, this thing is here forever.”
Cruz is mistaken. Obamacare is not guaranteed permanent victory when the subsidies start flowing in 2014. Obamacare is unlike Social Security and Medicare, popular programs passed with broad bipartisan support that provide universal entitlements, primarily for the elderly. Americans who pay Social Security and Medicare taxes all their working lives can easily envision benefiting from the programs one day if they live long enough. Obamacare, by contrast, is an elaborate regulatory scheme likely to hurt far more people than it helps. Few hurt by the law will ever be helped by it.
The Congressional Budget Office estimates that just 2 percent of all Americans will receive Obamacare subsidies in 2014. That number is projected to rise to around 6 percent of the population by 2016 (and level off there-after). But for many recipients, Obamacare subsidies won’t even make up for the insurance rate hikes the program will cause.
For people who currently are buying their own insurance on the individual market, the cost of the average plan will skyrocket in many states, rising a projected 41 percent in Ohio and 35 percent in Florida (to pick just two key swing states). According to a nationwide study by the Kaiser Family Foundation, just over half of people now on the individual market will qualify for no subsidy whatsoever under Obamacare.
What about those who will qualify for subsidies? Some will get tax credits insufficient to cover this year’s rate hike, though we don’t have precise figures. The participation of young Americans is critical to the success of Obamacare, but a study in the magazine of the American Academy of Actuaries found that 80 percent of Americans younger than 30 will face higher premiums even with subsidies.
Of course, some Americans, particularly those earning less than 200 percent of the poverty level, will see significant financial benefits. But insurance will still cost thousands of dollars per year for many beneficiaries who earn slightly more than 250 percent of the poverty rate. And Obamacare’s big-government approach to mandating what insurance must cover will do little to rein in the growth of health costs in the long run. Will Americans really become addicted to subsidies that go to their insurance companies and don’t actually lower costs?
Some of the biggest beneficiaries of Obamacare will be those with preexisting health conditions who have been denied insurance coverage. They will be able to purchase insurance at the same price as healthy Americans because of an Obamacare regulation that, incidentally, would still be on the books even if the law were defunded. But all this means is that any repeal of Obamacare must be tied to a plan to help people with preexisting conditions.
And here is the deeper problem with Cruz’s argument. The notion that people receiving subsidies will become “addicted” to Obamacare rests on the moocher theory of American politics, a simplistic and inaccurate idea that there are conservative “makers” who pay taxes and vote Republican and liberal “takers” who are dependent on government and vote Democratic. Like Mitt Romney’s statement about “the 47 percent,” Cruz’s remarks implicitly assume that conservatives have nothing to offer beneficiaries of government programs.
If Obamacare is as bad as Cruz and other conservatives say—if it’s going to pick the pockets of the young, ration care for the elderly, tax employers, slash wages and benefits of employees, assault religious liberty, subsidize elective abortions with taxpayer money, and bust the budget—shouldn’t Republicans be able to rally the American people behind something better? Shouldn’t Republicans in Congress be able to unite behind a set of conservative reforms that helps Americans with preexisting conditions through subsidized high-risk pools while freeing up the market and fixing the tax code to lower costs?
Top Democrats are far less confident than Senator Cruz about Obamacare’s future. “What we’ve done with Obamacare is have a step in the right direction, but we’re far from having something that’s going to work forever,” Senate majority leader Harry Reid said at a town hall event in August.
So the big question isn’t really whether Obamacare will eventually fail, but what comes after it fails. When Obamacare starts to unravel, will the American people trust the Democrats who designed it to fix it by giving the government more power and more control? Or will Obamacare’s failure provide an opportunity to repeal it and replace it with a conservative free-market reform?
Republicans will have a good shot at passing real reform—so long as they avoid blundering into a government shutdown that will not stop Obamacare but will only lend credence to false Democratic claims that the problem with Obamacare isn’t the law itself but rather GOP obstruction and sabotage.
Republicans should fight this fall for whatever they can realistically achieve (a matter about which there is reasonable disagreement). But conservatives shouldn’t be panicked into thinking that a government shutdown or debt default this fall is their last, best shot at overturning the law. On January 1, Americans won’t become addicted to Obamacare so much as they will be afflicted by it.
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