Here's a Bargain Republicans and Democrats Could Make on Obamacare

Since Congress just passed a budget and we are therefore at the dawn of a new era of bipartisan comity and compromise, I'd like to propose a trade, one that will allow both Democrats and Republicans to gain something significant without giving much up. The topic is the Affordable Care Act, and the trade is this: What if Republicans agree to pass a technical fix to address what it essentially a typo in the ACA, one that threatens to take insurance from millions of middle-class Americans, and in exchange, Democrats agree to repeal the ACA's employer mandate? Everybody would win.

Let's start with the employer mandate. Republicans hate it, because it infringes on the prerogatives of business owners, whom Republicans tend to believe are the most virtuous among us. There is certainly a cost of the mandate, in that some employers who hadn't offered insurance before will now have to do so. Raise their expenses, and there will be some effect on employment as they don't hire as many workers. The mandate has been delayed multiple times, and after January 1, employers with more than 100 workers will be required to offer insurance or pay a fine. Companies with between 50 and 99 workers will come under the insurance requirement in a year, and companies with fewer than 50 don't ever have to offer insurance.

As it happens, the vast majority of those mid-size and large companies already offer insurance. Here's the data from the Kaiser Family Foundation's latest employer survey:

So we're talking about a minority of companies, which is one of the reasons that some liberals have recently begun to question the utility of the mandate; even if it were eliminated, they believe, the effect on the number of uninsured would be small.

Eliminating the mandate does come with a cost, however. The assumption has always been that many companies will choose not to comply and pay a fine, which though not insignificant would still cost less than insuring employees. Those fines help pay for the other things the law does. Estimates of how much revenue the government would lose if the employer mandate were repealed vary widely; the Urban Institute says $46 billion over ten years, while the Rand Corporation says $149 billion. In any case, the money would have to be made up somehow.

On the other side of the bargain, we have the King v. Burwell case that the Supreme Court has agreed to hear. This case was something of a Hail Mary pass from the right in their many attempts to convince courts to destroy the ACA. It centers of a couple of passages in the bill's text that refer to people getting subsidies in exchanges "established by the state." While there are other passages making clear that Americans both in states that have their own exchanges and in those that use the federal exchange will all receive subsidies, the conservatives who brought the case are hoping that the Supreme Court will support their "Moops" interpretation of the law and take away subsidies from millions of Americans currently enjoying them, which would make it unaffordable for many to buy insurance.

There are many conservatives who don't care about (or even are excited by) the prospect of snatching health coverage from millions of people if it means they can strike a blow at Barack Obama. But I'm sure there are also some who are at least a bit worried about the potential political fallout. These are real people whose lives will be immiserated, and if the lawsuit succeeds, those people will be on the news telling their stories. If Congress made the necessary fix—which could be done in a bill that was just a couple of sentences long—it would only maintain the status quo.

So both Democrats and Republicans have something to gain, and not all that much to lose, by making a deal to drop the employer mandate in exchange for the fix to the language on exchanges. They'd both be able to pose as heroes to important parts of their constituencies: Democrats can tell people on the exchanges that they saved their health coverage, and Republicans can tell business owners that they freed them from the tyranny of Obamacare. What's not to like?

Unfortunately, my guess is that Republicans wouldn't go for this deal. As much as they dislike the employer mandate, they dislike Barack Obama a lot more. They'd probably rather take the chance that King v. Burwell will be decided in their favor; then they could watch in glee as the ACA is crippled.

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