The New Political Calculus on Health Reform

Fresh off the “shellacking” Republicans dealt to Congressional Democrats in the midterm elections, the GOP made “repeal and replace” of the Accountable Care Act their #1 priority.  They had 4 major approaches to accomplishing their goal.  None are working out particularly well.

Repeal the ACA: for this to work it would require President Obama’s signature, and that was never going to happen to his signature domestic achievement.  It passed the House in January and promptly died in the Senate.

Lawsuits against the individual mandate: thus far 26 Republican Attorneys General have filed lawsuits challenging the Constitutionality of the individual mandate.  They are winding their way through the courts and inevitably will end up in front of the Supremes in 2012.  The conventional wisdom in DC is that there are ample precedents allowing the Feds to tax interstate commerce, even an “inactivity” like not buying health insurance, and that the Court will declare the mandate Constitutional, just in time for the Presidential election.  No joy there for Republicans.

Defund the ACA.  The deck was always stacked against Republicans here as well, as much of the implementation funding needed for exchanges and the like was pre-funded in the ACA.  Very little was left to discretionary appropriations.  The GOP walked to the brink of a government shutdown in March but blinked, haunted by the memories of 1994.  As a result, they’ll only inflict minor damage.

Ensure Obama is a one-termer: if the President loses in 2012, the ACA is stopped in its tracks.  But that’s not going so well either…the Republican field is muddled, the economy is sluggishly improving, millions of twentysomethings are still able to stay on Mom and Dad’s health insurance because of the ACA, and overnight our mild-mannered Commander in Chief became Black Ninja.

Sure, it’s still a long way to next November and much can happen. This is where futures markets are often the best predictors of an outcome. My money — and many others betting real cash (see http://www.intrade.com/v4/home/) — is on an Obama re-elect and the ACA implemented largely intact in 2014.

The health reform readiness show must go on.