Coke and Pepsi Healthcare Reform -- It's All About the Credit
Over the last several years, when the successes and failures of the PPACA/Obamacare/Health Care reform entirely accrued to Democrats, the Republicans fought against market stabilization funds as unwarranted subsidies for insurance companies. My understanding is that the original PPACA included a market stabilization method, but it was written as being revenue neutral - ie funds from insurers who had healthier than average subscriber pools would be transferred to insurers who had sicker subscribers. But soon, all insurers were losing money and premiums were rising and insurers were dropping out of the exchanges. So President Obama transferred money from other sources to give extra market stabilization funds, e.g. subsidies, to insurers. Republicans fought this action in the courts. There was a principled position that Obama's actions were not legal, but Republicans were also happy to see the PPACA failing. If Democrats in Congress could have made any one change to the PPACA last year, it likely would have been to increase these stabilization or subsidy funds, which I presume the Republicans would have fought.
Now, it is clear the public and the media is going to hang any future PPACA problems around Republican necks. Whether this is fair or not is almost irrelevant -- one can see from Republican actions that they feel this to be true, at least in the Senate. Because now Republicans are proposing market stabilization subsidies that are likely higher than Democrats would have even dreamed of asking for:
When the Congressional Budget Office (CBO) releases its estimate of Senate Republicans’ Obamacare discussion draft this week, it will undoubtedly state that the bill will lower health insurance premiums. A whopping $65 billion in payments to insurers over the next three years virtually guarantees this over the short-term.
Indeed, Senate Republican staff have reportedly been telling members of Congress that the bill is designed to lower premiums between now and the 2020 election—hence the massive amounts of money for plan years through 2021, whose premiums will be announced in the heat of the next presidential campaign....
Section 106 of the bill creates two separate “stability funds,” one giving payments directly to insurers to “stabilize” state insurance markets, and the second giving money to states to improve their insurance markets or health care systems. The insurer stability fund contains $50 billion—$15 billion for each of calendar years 2018 and 2019, and $10 billion for each of calendar years 2020 and 2021. The fund for state innovation contains $62 billion, covering calendar years 2019 through 2026.
This goes against pretty much all of the principled reasons Republicans opposed Obamacare in the first place, but given the choice of following principle or using our tax money to help buy another couple years in power, both parties will always make the second choice. Of course, being given all that they would have wanted last year, the Democrats will likely not sign on for this as they don't want to bail Republicans out any more than Republicans wanted to bail Democrats out.
