Republicans Can Repeal Obamacare’s Premium Increases

by Charles Katebi

As President Obama prepares to leave the oval office, Senate Republicans started a parliamentary process called budget reconciliation to repeal key pieces of his healthcare law.

They plan to eliminate a myriad of Obamacare's tax and spending provisions, but leave its health insurance regulations in place. This is a peculiar decision considering that budget reconciliation could repeal those harmful regulations as well.

The Budget reconciliation process allows the Senate to pass budget-related bills with only 51 votes. It was created in the 1970's to make it easier for Congress to make major changes to large tax and spending programs. This would allow Republicans to send an Obamacare repeal bill to President Trump's desk that can't be blocked by a Democratic filibuster.

However, Republican leaders appear to only be interested in using budget reconciliation to repeal the law's tax and spending features like the individual mandate and subsidies, and not its insurance regulations. That would be a tragic error for individuals and families suffering under Obamacare.

Obamacare's insurance regulations have dramatically increased the cost of health insurance. The healthcare law mandates that insurers charge younger customers no less than one-third what they charge their older ones, effectively doubling young peoples' premiums. It also requires individuals and families to pay for a long list of expensive "essential health benefits" that many don't need or desire.

Combined, these rules raised premiums by 25 percent across the board in 2016. In some states, premiums increased as much as 116 percent. The Democratic Governor of Minnesota, Mark Dayton, was absolutely right when he said Obamacare's insurance is "no longer affordable to increasing numbers of people."

But simply repealing Obamacare's subsidies without also eliminating its insurance regulations will make health coverage even more unaffordable. Without these mandates and subsidies strong-arming individuals to remain on health insurance exchanges, millions will be exposed to the full cost of Obamacare's coverage and abandon the individual market in droves. The Congressional Budget Office estimates that 82 percent the entire individual health insurance market - roughly 18 million people- would cancel their coverage if Republicans partially repeal Obamacare in this fashion.

Fortunately, Republicans can avert this health insurance death spiral by repealing Obamacare's harmful insurance regulations through budget reconciliation. These regulations don't directly raise taxes or spend government money. But they do raise premiums that Obamacare's insurance subsidies pay for. Last year, these regulations increased the cost of Obamacare's subsidies by $10 billion.

Since these rules increase premiums that the federal government pays for through Obamacare's insurance subsidies, they qualify as budget-related provisions that reconciliation can potentially target.

Congress has successfully used budget reconciliation to change implicitly budget-related policies in the past. In 1996, Congress used budget reconciliation to pass the Personal Responsibility and Work Opportunity Reconciliation Act, also known as welfare reform. It contained a range of legislative changes that indirectly affected federal spending. Most importantly, it imposed work requirements and time limits on welfare benefits. These changes significantly reduced federal spending yet didn't explicitly say so in their legislative language.

In order to determine whether a bill's provisions are budget-related, the Senate parliamentarian listens to all arguments for and against. He or she then advises the Senate's presiding officer on whether Senators are abiding by the chamber's rules that govern the budget reconciliation process.

However, the Senate's presiding officer would ultimately decide if Obamacare's insurance regulations qualify as budget-related provisions. If the Senate parliamentarian believes that Obamacare's insurance regulations aren't budget-related, the presiding officer can ignore her recommendations. As the non-partisan advocacy group, Heritage Action, explained in a memo to Congress:

"The parliamentarian is an employee of the Senate with the job of providing advice to the presiding officer on historical precedents as applied to the matter at hand. Ultimately, the decision of whether or not a point of order that is raised against a provision repealing the insurance regulations lies with the presiding officer."

After President Trump is sworn in, Vice President Mike Pence will become the presiding officer.

By siding with Senate Republicans, Pence could spare millions of families from Obamacare's punitively high premiums and fulfill Trump's pledge to "create quality, reliable, affordable health care in a free market where parents can make the health care decisions that are right for their families."

Some worry that ignoring the Senate parliamentarian's recommendations violates Senate norms and traditions. Nonetheless, budget reconciliation remains the best and only tool Republicans have to effectively repeal Obamacare.