Why A President Romney Would Find It Hard To Repeal ‘Obamacare’

Should he win the nomination and the presidency, then on inauguration day in 2013, after all the pageantry has subsided, Mitt Romney will face a key test: does he take aggressive action to roll back Obamacare as he and every other GOP contender has promised? Or will he accede to pragmatic realities and seek detente with Democrats on the issue that has most divided the parties over the past three years?

The amount of money, strategizing, myth-making, and political capital that Republicans have already thrown at the health care law will make it very difficult for Romney or any GOP President not to enter office with guns blazing. But many of the would-be policy makers who have made dismantling the law their top priority haven’t given any real thought to how, mechanically, to unwind it. A closer look reveals that chipping away at Obamacare, or even repealing it altogether will be a daunting challenge, and even if successful will leave the Republican party holding the bag politically for the policy muddle they will create in the process.

“It would be a mess,” said Donald Berwick, who led the law’s implementation last year as Obama’s Centers for Medicare and Medicaid Services director. “If I was given the assignment of unwinding the law, I wouldn’t know how to do that. I would thoroughly disagree with it but it would be technically very difficult.”Of course, a GOP President doesn’t necessarily guarantee that Republicans will control both the House and Senate, which would be instrumental in truly crippling Obamacare. But that President would remain under intense pressure to do whatever possible from within the executive branch to stymie it on an administrative level.

For instance, because so many state governments are unprepared or unwilling to build out the architecture of the law by 2014, Obamacare empowers the federal government to set up, or help set up, insurance exchanges in lagging jurisdictions. But a GOP President could put a stop to that.

“First thing that happens is they shut down the creation of a federal exchange, because the federal exchange is going to have to be in place in toto in some places, partially in others,” says Len Nichols, a health care economist at George Mason University, and one of the policy experts who helped lay the intellectual groundwork for what ultimately became Obamacare.

Absent Congressional action, that would leave in place the many of the law’s reforms, but no way to realize them in many states — in other words, health care reform for some, and not for others.

“There are all these tricky implementation issues where states are looking for federal guidance. I trust President Obama to do that; I don’t trust President Romney to do it,” said MIT economist Jonathan Gruber, a major force behind the creation of both Romneycare and its younger, but larger sibling Obamacare. “I’m not saying that means he’ll want to implement [the law]; I think politics will trump policy… It’s not clear that he cares about policy at this point.”

That means at a minimum no federally administered exchanges. A GOP President would also have unilateral power to sabotage many of the cost control measures built into the law.

“The real part of the bill that’ll suffer, ironically, are the cost control parts of the bill, because they need leadership at the federal level” to be done effectively, Gruber said.

By itself, that creates a messy policy landscape. As Gruber said, “The taxes that finance this and the cuts are going into effect anyway. So basically you have to tell people, you’re gonna pay the taxes and get the cuts, but just not see the benefits.” Romney would own that mess, and absent majorities in both houses of Congress, that’s all about all he’d be able to do.

If Republicans sweep the elections in 2012, though, they’d be able to do much more damage, even without a filibuster-proof majority in the Senate. GOP leaders could use an arcane tool within the budget process to repeal or delay indefinitely the financing provisions of the bill — the taxes and cuts that pay for new benefit guarantees, and the benefits themselves.

“They wouldn’t at the beginning have the 60 votes in the Senate to repeal the rest of the law, but once they cut off the reform at the base, then they’d be able to negotiate from a position of strength,” said Princeton health care economist Paul Starr. “That’s just my guess.”

That would necessarily mean taking away from voters benefits they’re already receiving, or have been promised — a huge political risk for any President of any party. But it wouldn’t just incite a voter backlash. The health care law has touched off major changes in practice across the health care industry. Providers in particular have been moving away from a paradigm in which they’re reimbursed for the volume of treatment and care they provide toward one that rewards good outcomes — a shift that will suck billions of dollars of waste out of the health care system and cut deeply into per-patient profits. Why have they agreed to do this? Well, for one thing, the law will institute a shift in how Medicare providers are reimbursed anyhow, so they have little choice. But they bought into the law in the first place because it also guarantees them millions of new patients — enough to keep them economically viable despite the payment reforms.

By 2013, this transition will be well underway, and if a GOP President tells hospitals, “Surprise! Those new patients aren’t coming!” there will be hell to pay.

“They were willing to do this because of the coverage expansion, but you take away the coverage expansion, they can’t make a go at it,” Nichols said. “I think those hospitals would be in severe financial trouble — and the only way to solve that problem would be to give them more money to repeal those [payment reforms] and then, look at that! Medicare spending just went up. It’ll be really hard.”

Before Obamacare became law, the country’s health care system was an unpopular mess, but a mess that neither party in particular really owned politically. If the GOP cripples or ends Obamacare, the unsustainable system they leave behind will be their Frankenstein.

“They have no alternative,” Gruber said. “Here’s the simple fact — if you want to cover the uninsured, there’s no more a private sector way to do so than this law. It’s a Republican plan at its core. So there’s no replace plan.”

Under GOP control of the government, the only thing that could head off this outcome would be a conscious decision by Romney to seek rapprochement with Democrats on the issue — to recognize that all out war will leave him an ungovernable health care system and a soiled legacy … and then to break faith with the right wing in a dramatic way.

“The rate of increase of spending has moderated fairly dramatically in the last couple years,” said Henry Aaron, a health care expert at the Brookings Institution. Under a GOP-led roll back of Obamacare, “we’re going to see a resumption of the growth of health care spending at a fairly rapid rate,” Aaron said. “Then the administration would be responsible for that having happened.”

Aaron and other experts agree that Republicans would use the return to an unsustainable health care cost trajectory to argue for much more radical reforms — Medicare privatization, and severe cuts and reforms to Medicaid. And in that sense, despite the horrendous politics and the non-sensical policy implications, attacking Obamacare on all fronts serves a key ideological function on the right.

“It does appear that there are some who think that the best way to undercut the social safety net is to make it unaffordable,” said Berwick. “That may not be a common play, I hope it’s not but that may be part of what’s going on.”

“These are profound policy shifts and they need to be debated and discussed,” Aaron noted. “I think most Americans would be uncomfortable with them.”

Additional reporting by Sahil Kapur.