Health Care: What Happens Now?

By Dick Morris on July 28, 2017

The Senate rejection of repeal of ObamaCare, coupled with its obvious failure, leaves Americans in a hell of a mess.

Because of the inherent problems in the ObamaCare law, premiums will continue to skyrocket and outpace subsidies. More insurance firms will refuse to participate and people will be stuck.

In addition, President Trump is likely to take two actions that are good policies but will worsen the situation:

1. He will probably direct his agencies, including the IRS, to stop enforcing the requirement that everybody buy insurance. Last year, six million people ran afoul of the requirement and had to pay fines of averaging $500 each. If nobody has to buy insurance, more and more people will refuse to do so. That will leave older and sicker people in the insurance pool and drive rates even higher.

2. Trump will probably refuse to pay extra money to insurance companies under ObamaCare. The Republicans say the requirement to pay these subsidies was illegally passed because it did not originate in the House. The lower courts have agreed. And, now, the solicitor general, appointed by Trump is likely to agree also, nullifying the provision. Once the subsidies stop, every insurance company will pull out of ObamaCare and there will be nobody to write insurance.

This will leave Americans with no good choices.

ObamaCare, which remains on the books, makes it illegal to buy an insurance policy that does not cover everything (even if you don’t want or need it) and for insurance companies to vary premiums based on risk. So all Americans will find their premiums going up by a prohibitive amount and won’t find any companies willing to write insurance.

They will be stuck.

This real gridlock will be mirrored by the political gridlock in DC. We can expect four groupings in the Senate:

1. Single-Payer — Backed by the left of the Democratic Party, they will want simply to put everybody on Medicare and raise the tax accordingly, banning private insurance. Likely about 30 Senators will support this.

2. ObamaCare — Continue the current system. Make some minor adjustments. Require the payment of insurance company subsidies. Require enforcement of the mandate to buy insurance. About 20 Senators, all Dems.

3. The McConnell-Cruz Bill — Got 45 votes in the Senate. Eliminate the mandate. Subsidize high risk patients or those with pre-existing conditions. Curb insurance bailouts. And eliminate the Medicaid entitlement. About 30 Senators, all GOP will opt for this approach.

4. Repeal ObamaCare With No Replacement — No government role. Let anyone buy any insurance they want and let insurance companies offer whatever they want. About 20 Senators, all Republican, will probably prefer this alternative.

As in a government shutdown, the deadlock will last until somebody blinks. President Trump will be happy with options three or four, but the lack of unity in his party will cripple his ability to pass it.

But with ObamaCare crashing around him, he probably can bully the Dems into compromising or make them pay too high a price for failing to do so. After all, he has the biggest microphone in town.

Senator McCain will keep his seat as long as his health permits.

See you in a few months.

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