(Bloomberg View) — In the days since the election, Republicans have realized that they are in a tight spot on Obamacare. They seem to be lurching toward a strategy that will make it tighter.
Republicans have vowed over and over again to repeal and replace the Affordable Care Act, but they do not yet have a detailed plan or the votes to enact it. Democrats, meanwhile, remain committed to the law, and there will be at least 48 of them in the new Senate. Unless eight of them defect, they have enough votes to filibuster Republican bills to undo it. Republicans probably do not have the votes to abolish the filibuster.
Under certain conditions, Senate Republicans can use a procedure called "reconciliation" to pass legislation with a simple majority. But they probably cannot change Obamacare's regulations, as opposed to its tax and spending provisions, that way.
Given these constraints, Republicans have lit on the idea of using reconciliation to repeal as much of Obamacare as they can, but with a delay: The repeal would go into effect in two years. This would give them enough time to work on a second bill that takes up both a replacement plan and the remaining parts of Obamacare.
Republicans will have the votes for the first bill, as long as they do not think too hard about the challenges of getting the second one. Those challenges begin with their own divisions. Some Republicans just want to repeal Obamacare, with no replacement. Others say they would like a replacement, but don't like the ideas leading Republicans have outlined.
Passage of a bill that mostly repeals Obamacare by 2019 would empower both groups of Republicans to block replacement legislation. The repeal-only bloc would already have gotten most of what it wants. The Republican congressmen who are lukewarm about a replacement would, judging from past form, decide that doing nothing is better than whatever flawed bill Republicans put forward.
Democrats, meanwhile, would have an incentive to play their own game of chicken. They know that most Republican politicians do not want repeal-only to take effect because millions of voters would lose their insurance coverage. A lot of them might decide to wait until the deadline draws near and tell Republicans that they have to call off the expiration of Obamacare or face catastrophe.
Meanwhile, Obamacare's exchanges, already in parlous health, would degrade further. Insurers have been pulling out of the exchanges rather than incurring continued losses in covering their relatively old and sick population; the remaining ones have been jacking up premiums.
Cut off subsidies to the exchanges, and more insurers will leave or raise premiums. That's especially the case if the Republican reconciliation bill — the one they are planning to pass in early 2017 — gets rid of the individual mandate immediately. Without the mandate forcing healthy and young people to buy insurance, the exchange populations will be even more expensive to cover.
