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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

‘Magical Thinking” vs. ‘Plan B’

I hate to admit it, but I’m wondering if conservative Ramesh Ponnuru has a point in his Bloomberg post accusing Dems who believe that the Supreme Court striking down the health care law or the individual mandate would be a good thing of “magical thinking.” Ponnuru’s argument:

Let’s say the court strikes down the entire law. The Democratic fantasy goes something like this: The public will still be upset about the number of Americans without insurance, rising premiums and the difficulty people with pre-existing conditions have getting insurance. Republicans will have no plan for achieving universal coverage. Sooner or later, single payer — which would probably be more popular than a mandate, and thus an easier sell to the public — will prevail
Reality-check time: When Obamacare became law, Democrats had more power in Washington than at any time since the Carter administration in the 1970s. They had the presidency and lopsided majorities in both houses of Congress. Because conservative Democrats have declined in numbers, it was probably the most liberal Congress since 1965-66. They were still barely able to pass the law. And that was with important medical industries either neutralized or in favor of the legislation, which they would not be in the case of single payer.
Democrats attained that degree of power because of an unusual set of circumstances: an unpopular Republican president reaching the end of his second term and a financial crisis hitting at exactly the right time. The odds are that it will be a long, long time until Democrats again hit the jackpot. And without an overwhelming Democratic majority, getting single payer through Congress would be almost impossible: Republicans won’t acquiesce to any steps toward such a system.

If most of the ACA survives, but the individual mandate gets invalidated:

……Or let’s say the court strikes down the mandate, but leaves in place the insurance regulations. The regulations without the mandate would lead healthy people to drop their coverage — the insurance rules mean such people would be able to get it again if they get sick — and with only ill people covered, premiums would soar.
…Democrats would be outraged if the court struck down the mandate, and would presumably blame any resulting problems in the health-care market on its decision. Republicans, meanwhile, would blame the Democrats for enacting a flawed law that couldn’t survive legal scrutiny.
The public is likely to side with the court, for two reasons. Americans express significantly more confidence in the court than in the presidency or Congress. And most Americans dislike the individual mandate and actually want it struck down.

Ponnuru has no happy outcomes for Dems in either case. Another conservative publication, Forbes, has a more encouraging post, “What’s Democrats’ Plan B If the Individual Mandate Goes Down?” by Avik Roy, which merits skeptical consideration.
Roy begins by noting that Dems could have bulletproofed the law in terms of the Commerce Clause by creating a tax to pay for health care, coupled with a credit for those who sign on — “equivalent to the mandate in policy terms, but would have been far sounder from a constitutional standpoint.” Alternatively, Dems could have embraced the “German provision” that allows individuals to opt out, but then wait five years before they can qualify for “guaranteed-issue insurance that doesn’t exclude pre-existing conditions.”
As Paul Starr puts it in The New Republic, the German provision “That deters opportunistic switches in and out of the public funds, and it helps to prevent the private insurers from cherry-picking healthy people and driving up insurance costs in the public sector.” It would likely also compel ‘free market’ purists to put up or shut up.
Roy goes on to discuss grim possible scenarios of chain reactions to the elimination of the individual mandate, including the crumbling of ‘community rating’ and ‘guaranteed issue,’ in a “death spiral” for the act. he then makes his pitch for “A Democratic “Plan B” that could gain Republican support” —“a universal tax credit for the purchase of insurance” with “a stronger cap on the employer tax exclusion.”
In other words, cave to the GOP agenda. No thanks would be my reaction to such a plan. As with all such tax credit/voucher schemes, it’s hard to see any credible cost-containment at work.
The more credible ‘Plan B’s, in Roy’s post would be to amend the act to include the ‘German provision,’ or alternatively converting the mandate into a tax credit rigidly linked to a tax to pay for the coverage. Republicans, of course will fight anything resembling a doable fix, which may be a good argument for building a movement for single payer.
It’s hard to develop any ‘Plan B’ without knowing exactly what the court will do. Whatever they do, however, Dems should have an alternative ready to go, so we don’t look like we are floundering around. Pollsters will likely move quickly to assess where most of the blame is directed, which will help Dems target their strategy.

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