Yesterday, Steve wrote that the Democrats “are looking for the tall grass” when it comes to Obamacare. But where will they find it?
Sen. Mary Landrieu thinks she sees tall grass in the form of “If You Like Your Plan, You Can Keep Your Plan” legislation. Sen. Dianne Feinstein apparently concurs. And, reportedly, Senate Dems are ready to support such legislation en masse if President Obama doesn’t come up with something better by the end of the week.
But Landrieu’s fix may be a mirage. For one thing, it’s not clear than the cancelled insurance plans can be revived, and it’s doubtful that they can be revived by the January 1 deadline for obtaining a plan. That deadline could be extended, but a very long extension might be needed, and the White House has been dead set against that.
Presumably, “Keep Your Plan” legislation would help those who haven’t yet lost their coverage but will lose it later. Thus, such legislation might control the damage done by Obamacare.
But in doing so, Landrieu’s approach might sink Obamacare itself. Already, Obamacare is in jeopardy because it may well be unable to enroll enough healthy people to keep insurance premiums from sky-rocketing to a point beyond anyone’s definition of “affordable.” If more millions who were counted on to enroll are let off the hook, the possibility that “adverse selection” leads to an insurance “death spiral” increases substantially.
For this reason, President Obama will be loath to sign “Keep Your Plan” legislation. And there may be enough Democrats in “safe seats” to sustain a veto, if it comes to that.
But what “tall grass” can Obama point Democrats towards? So far, he seems to be contemplating legislation that would offer “premium support” — in other words, subsidies — to those who lose their insurance.
There are obvious problems with this approach. It does nothing direct about increased deductibles and co-pays. It may not prevent people from losing their doctor[s].
In addition, it will either force the administration to make a reliable estimate of the number of people who are expected to lose their insurance — which will reveal the scope of his prior deceptions — or risk an extreme case of sticker shock as the magnitude of the subsidies is revealed next year.
Finally, in explaining why premium support legislation is superior to the more straight forward “Keep Your Plan” alternative, Democrats may have to concede that Obamacare — by design — depends on millions of people losing their health insurance plan.
Presumably, there will be a political price to be paid for granting subsidies to help millions of Americans buy a new health insurance plan, where (1) most of them liked the plan they had and (2) Obama, though promising they could their plan if they liked it, knew all along that he had structured Obamacare to force these people to buy a more expensive plan.
Even so, Obama’s subsidy alternative to “Keep Your Plan” has two things to recommend it to congressional Democrats. First, it shifts some responsibility to Republicans. If they vote against monetary relief for those who have lost their plan, Democrats can say that they offered a solution and the Republicans rejected it.
Republicans would, of course, be able to say the same thing about Democrats — the Republican solution being “Keep Your Plan.” But at least the Democrats would have an argument.
Second, Obama’s alternative reduces the prospect that Obamacare will collapse due to the problem of “adverse selection.” This is a big deal for Obama, obviously, and for true-believer liberal Democrats as well.
It may also be a pretty big deal for more pragmatic Dems like Mary Landrieu. Does she really want to face the voters of Louisiana as the Senator whose vote put Obamacare over the threshold for passage, only to see it collapse of its own weight, having created a massive disruption?
The answer is no, but the panic instinct is difficult to resist.
Maybe the best solution for Democrats like Landrieu is to vote for “Keep Your Plan” legislation and rely on Obama to veto it, if it passes. Happily, that isn’t tall grass.
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