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I’m in agreement with Matt Yglesias and Aaron Carroll that chances of health reform being repealed are exceedingly slim.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.

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