Megan McArdle: How would a bipartisan health bill be possible?

Senate Majority Leader Mitch McConnell is once again announcing the Senate is going to come out with a new health-care bill and try to hold a vote this week. That exhaustion you feel is the same despair that seeps over you when a pair of ill-matched friends announce for the 17th time that they’re getting back together.

As with those friends, there seems to be no set of mutual goals upon which a durable partnership can be built. Many Republican legislators want Obamacare to die. Others would probably attend the funeral with ill-concealed delight, but they don’t want a reputation for having killed it. Still others would like to be able to tell voters that they “did something” about Obamacare, even though in reality they are loath to actually, you know, do something — because their states would lose money or voters would lose insurance.

Indeed, these may not be discrete factions of Republicans on the Hill. Often these desires seem to war within the same head. Small wonder that as the party works on the compromise bill, the more it inches toward the status quo. As Phil Klein of the Examiner noted, “Brick by brick, GOP versions keep restoring parts of Obamacare.”

Whether or not you think the status quo preferable, that’s going to be a tough sell to a lot of senators — and even if they pass it, in the House it’s going to be challenging. The hard-liners in the lower chamber aren’t going to rubber-stamp a bill that looks like Obamacare with the fonts changed.

In the old days, of course, the solution to those conservative defections would have been to pick up some moderate Democrats and pass a bipartisan bill. But that seems a long time ago, and political galaxies away from where we are now. Or is it? Sen. Lindsay Graham, R-South Carolina, says he’s crafting an alternative, bipartisan bill that might offer a way out of the Obamacare mess, a more viable path than either the AHCA or the BCRA.

Cue the movie clip of a guy saying “It’s so crazy, it just might work!” Then turn to the question that naturally follows: What should a bipartisan health-care bill look like? We vaguely recall how bipartisanship worked, back when it worked. Compromise. Horse-trading. Quid pro quo. What should Republicans be willing to give up to get enough Democrats on board?

As an exercise on paper, the answer is easy:

▪  Stop trying to make this a tax-cut bill, and focus on reforms that can pave the way to fiscal stability, and dismantling many of the perverse incentives that have so distorted our health-care system.

▪  Leave Obamacare’s taxes intact. (Yes, even the dumb ones, of which there are many.)

▪  Turn Medicaid into a fixed grant rather than an open-ended entitlement, either by making it a block grant, or switching to a flat per-beneficiary payout — but don’t try to make block grants a confusing cover for very deep cuts to the program.

▪  Provide generous funding to stabilize the individual health-insurance exchanges, but demand in return very wide latitude for states to decide how they stabilize their insurance markets — including jettisoning any of the Obamacare regulations they think are getting in the way.

▪  Meanwhile, move the system more aggressively toward health-savings accounts plus catastrophic insurance, and get Democrats on board by offering to have the government fund some portion of those health savings accounts for low-income citizens.

Is that my ideal health-care system? No. But it gives Republicans some of what they want (a more consumer-driven, pro-market program in the individual market, and a big start toward reforming the bloated and byzantine mess that is the Medicaid program). It gives Democrats some of what they want (money for people who don’t have very much of it, plus they don’t get splattered by the fallout of Obamacare exchanges melting down). In theory, it could pass.

And in theory, I could play third base for the Yankees, if Joe Girardi were willing to hire me. The truth is that after years of complaining about obstructionism, Democrats have developed a sudden taste for the stuff; there’s a substantial faction of both politicians and voters who want the Democrats to stand by and do nothing that Republicans might like.

Republicans, meanwhile, don’t even have much of a coherent vision. Too many of them have an ardent desire for Obamacare not to ever have passed, and no idea how to either get the country back to that point, or live with the new reality. The continued existence of Obamacare in largely its current form is a dealbreaker for both parties, which means there’s unlikely to be a deal.

Jettison the ambition and just do one thing: stabilize the individual market by giving money to states to figure out how to shore up their ailing exchanges. It gives legislators a little pork to take home, and solves a real problem. It makes Democrats happy because Obamacare lives to fight another day; it makes Republicans happy because they don’t have to explain to voters how come Obamacare died a horrible lingering death after they took office. It doesn’t do terrible things to the government budget, even if it doesn’t do anything good, either.

Even this seems like a very hard sell in the current partisan environment. And unfortunately for Republicans, “very hard sell” looks like the best of the options they have.

This story was originally published July 15, 2017 at 11:32 AM with the headline "Megan McArdle: How would a bipartisan health bill be possible?."