• A Plausible Threat to Health Reform

    I’m in agreement with Matt Yglesias and Aaron Carroll that chances of health reform being repealed are exceedingly slim. But that doesn’t mean it can’t be watered down to a far less ambitious scale. As I wrote before, money attracts a crowd, and there’s a lot of money in health reform that some would like to use for other purposes.

    What I think is more likely than repeal, though by no means certain or even highly probable, is an erosion of the low-income subsidies in real terms, perhaps tied to a change in the minimum level of coverage required. A Republican congress and president might pass such changes along with a tax cut. It is very likely that Republican candidates will campaign on it.

    I could see the whole thing being spun as middle class assistance: options for cheaper insurance and a lower tax bill, albeit with subsidies for the poor that don’t keep up. Since the poor aren’t a big constituency this strikes me as at least plausible.

    Another wrinkle that could make this work is a weaker mandate that includes exemptions when the premium-to-income ratio is above a threshold. Put it all together and you’ve got a gradual erosion of health reform: worse insurance, less low-income assistance, fewer individuals covered, a weaker mandate. That’s not repeal, but it would make a mockery of the hard-won reforms. Watch for it.

    • Republicans may decide that the individual mandate is an easy target, but they’ll have a powerful adversary should they try to weaken or abolish it: The Heath Insurers. Without the mandate, insurers can’t cover pre-existing conditions or chronic illnesses. Moreover, Republicans will be hard-pressed to respond to charges that they intend to reward “free riders” who want to avoid having to pay for insurance until they actually get sick or injured.

      Naturally, I expect Republicans to take the bait anyway. They can’t help themselves.

    • The GOP actually cutting spending in conjunction with enacting a tax cut? I’ll believe that when I see it.