ACA Fail Fractal
Budget Deal Reached, ACA Hardest Hit

The U.S. House of Representatives reached a late-night agreement on a contentious $1.1 trillion spending-and-tax bill on Tuesday, narrowly avoiding a government shutdown and setting up a vote in the chamber for Friday. Apart from proposing to lift the crude oil export ban in place since the 1970s, the bipartisan bill is notable for delaying crucial funding provisions for the Affordable Care Act, including the so-called “Cadillac Tax” on high-cost employer healthcare plans, and a tax on medical devices. The NYT:

The question of delaying important provisions of the Affordable Care Act provided a surprising area of common ground — among Republicans who have sought to dismantle President Obama’s signature health care law, and Democrats who had reservations about a tax on generous health plans. The White House and many economists have defended the “Cadillac tax” on high-cost employer-sponsored health plans as a way to reduce health costs and make the health care system more efficient.

But lawmakers said they had tentatively agreed to delay the tax, originally scheduled to take effect in 2018, by two years. Labor unions strenuously opposed the tax, saying it could lead to reductions in health benefits prized by their members.

Republicans said the package would delay what they see as harmful health-related taxes and could set a precedent for efforts to undo other provisions of the health care law.

President Obama is seen as likely to sign the spending bill, should it land on his desk, and that makes this “common ground” on opposing the Cadillac tax all the more significant. Democrats are refusing to support a key element of the Obamacare system they passed in President Obama’s first term. An important part of the law, that is, is so unpopular that not even the party that wrote the legislation wants to enforce it. This opposition could have serious consequences down the line, as the Cadillac tax helps pay for the ACA and, arguably, could reduce the country’s health care spending. The delay, especially if it is extended or made permanent, may therefore have long-term consequences for the law’s implementation and success.

There is a lot of debate about Obamacare, and the law has done both good and bad things. But the most important political fact about Obamacare today is that it is an orphan. No party really wants to sustain in its current form the system that President Obama thought would be his defining legacy achievement. If a Republican wins in 2016, and Republicans continue to control Congress, the inevitable reform will be called the repeal of Obamacare. If Democrats win in 2016, we will be talking about the reform of Obamacare.

But the law’s problems aren’t just about its unpopularity among legislators. The policies that Obamacare mandates are costing more every year, and doctors’ bills and co-payments continue to put medical care out of reach for too many Americans. If America’s health care problem is going to be fixed, the next president and the next Congress will have to go to the root of the issue: cost.

Democrats will likely try to move toward some form of a single-payer system with rationing and price controls. Republicans are likely to look for more market-based approaches. Both approaches have their shortcomings. But the need for flexibility in our medical system in order to deal with rapid technological change means that a market-based approach is the only possible route to the kind of health care system Americans need and want.

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