Health Care Reform: Death by a Thousand Cuts or Repeal and Replace?

The vote to repeal the health care reform bill in the House scheduled for Wednesday was postponed due to the shooting of Congresswoman Gabrielle Giffords. At some future date, the repeal effort will pass the House and be defeated in the Senate. Republicans are talking about myriad other ways to attack the legislation, including refusing to fund certain expenditures required by the Department of Health and Human Services (DHHS) to keep the program on track for its full implementation in 2014. Here are just a few of the bills that will be introduced:

• Rep. Scott Garrett (R-N.J.) has a bill to repeal the individual mandate, and Rep. Ted Poe (R-Texas) would prohibit federal funds to be used to enforce it.

• Rep. Dan Burton (R-Ind.) would replace the health care reform law with "incentives to encourage health insurance coverage."

• Rep. John Fleming (R-La.) has two bills -- one would amend the law to allow states to elect not to establish a health exchange, while the other would prohibit the hiring of additional employees by the Internal Revenue Service to "implement, administer, or enforce" the law. He also proposes to rescind funds for the law's Health Insurance Reform Implementation Fund.

• Rep. Tom Graves (R-Ga.) would deauthorize appropriation of funds to carry out the law.

• Rep. Dan Lungren (R-Calif.) has a bill to repeal the law's 1099 tax reporting requirement.

• Rep. Marsha Blackburn (R-Tenn.) wants to allow Medicare beneficiaries the option of choosing a voucher for a health savings account or a high-deductible health insurance plan while eliminating the late enrollment penalties for people who wait until they're 70 to enroll in Medicare. And Rep. Ron Paul (R-Texas) has a bill to "provide greater health care freedom for seniors."

There are, I think, several problems with the GOP’s approach. Passing a series of small bore bills in the House that die in the Senate seems like a scattershot plan. The Democrats will also continue to rely on and promote to their media allies CBO estimates of the cost of repeal -- namely that for the next ten years, the health care reform bill  results in overall deficit reduction (new taxes, plus Medicare cuts, exceeding new program expenditures by over $200 billion).

Even though the CBO estimate is nothing more than a product of what the Reid/Pelosi team asked them to score last year, the $200 billion in added deficits that CBO says would result from the repeal effort will be thrown in the face of the Republicans every time they attempt to reduce spending or the deficit in other areas in the coming session. The Democrats will also attempt to focus on all the goodies in the bill -- especially those that are already in effect, such as elimination of lifetime caps in insurance coverage, coverage for children with pre-existing conditions, closing part of the “donut hole” in Medicare drug coverage, and enabling children up to age 26 to remain on their parents’ policies.

Of course, all of the new features will add to the cost of insurance, though DHHS is already signaling it will challenge rate increases of over 10% this year, regardless of the fact that the reform bill may be a major factor in the added cost of existing policies. If one did not know better, one might think that one of the goals of the reform effort is to destroy the private insurance business.

ObamaCare was sold as a three-pronged effort: 1. Change the insurance business to protect individuals from being dropped or denied coverage when they are very sick, 2. Require most of the uninsured to buy coverage or pay a penalty, in order to expand the pool with healthier people so as to cover the very high costs of the individuals now covered by the insurance reforms in #1 above, and 3. Subsidize the cost of the new policies for individuals covered by #1 or #2. Of course, the bill, in its 2,000 pages, did far more than that. It limits the profit margins for insurance companies, and limits the kinds of policies they can sell (rich with mandates, but restrictions on HSA type high-deductible plans). It cuts Medicare Advantage, creating a long-term insurance policy that was (conveniently) deficit-reducing only in the first ten years, and adds a slew of new taxes.

The GOP will have a real opportunity to repeal much of the health care bill , but only in 2013. And even in that year, they will be able to do so only if they capture the White House in 2012, maintain their advantage in the House of Representatives in that election, and take control of the Senate in 2012, picking up at least four seats. This is far from a lay-down, of course.