Balkinization: The Enduring Significance of the Defeat of “Repeal and Replace”

The Enduring Significance of the Defeat of “Repeal and Replace”

David Super

My friends are holding a New Year’s Eve Party tonight to ring in the new federal fiscal year. At the stroke of midnight, in place of the Times Square ball, what will be dropping is the “reconciliation instruction” that Republicans gave themselves last winter to repeal the Affordable Care Act (ACA). The Senate Parliamentarian’s ruling on this makes sense: that instruction was contained in the budget resolution for fiscal year 2017, and Congress cannot even purport to improve that year’s budget after the year is finished. Although procedural maneuvers are still possible to allow repealing the ACA with a simple majority in the Senate, doing so would undermine efforts to pass massive tax cut legislation that is even dearer to Republican donors than repeal-and-replace. Such maneuvers also would take a while, allowing opposition to mobilize, precluding sudden attacks like the recent Graham-Cassidy bill.

We may see renewed efforts to kill the ACA if Republicans pick up seats in the mid-term elections or if Mike Pence, who surely would be a stronger president, replaces Donald Trump in the Oval Office. The ACA will not definitively be safe until Republicans pass legislation to improve the ACA, such as that under negotiation between Senators Lamar Alexander (R-TN) and Patty Murray (D-WA). Still, this seems like a good time to consider what the demise of “repeal-and-replace” means for our informal constitution.

Abbe Gluck offers a fascinating argument that the ACA’s survival signals a fundamental change in how Americans have come to see health care, from individual privilege to social necessity. She is clearly correct: the repeal legislation’s remarkable difficulties in a deeply conservative House, and its ultimate defeat in the Senate, reflect its overwhelming unpopularity with the broad electorate. Not only did it largely unite a progressive coalition that had previously been consumed with squabbling about single-payor plans, but it also won the enmity of huge swaths of voters that supported Republican congressional candidates and President Trump. Popular constitutionalists like Bruce Ackerman, Bill Eskridge, and John Ferejohn argue that constitutional moments are not complete until the new order becomes so entrenched that continued resistance becomes politically suicidal. We have not reached that point yet, but we may be getting close. Ironically, it may be President Trump’s deliberate sabotage of the ACA that takes us the rest of the way by creating a crisis that Republicans cannot ignore (because they are implicated) and cannot address by tearing down the ACA (because they have lost public credibility through their numerous horrific “repeal-and-replace” bills).

What remains to be seen is whether this constitutional moment is limited to health care. A few years ago I argued that if the ACA survived, it would represent a broader change in our public law regime in at least four respects. Specifically, I argued that the ACA forcefully placed the federal government’s superior fiscal capacity at the center of our fiscal federalism. That model rose to prominence in the New Deal, but has faced pushback from those regarding it as subversive to states’ dignity and sovereignty. The ACA effectively ended several decades of experiments with state-level health care reforms, which regularly fell apart when recessions prevented states from maintaining subsidies.

Champions of the repeal-and-replace bills, most of which also capped federal contributions to the existing Medicaid program at levels far below projected need, invoked state sovereignty when insisting that reduced federal contributions did not necessarily require Medicaid cuts. Technically, they were right: states could make up the difference out of their general funds. Yet the impracticality of this argument prevented it from ever gaining traction, with estimates of huge coverage losses being widely accepted. The ignominious fate of the Graham-Cassidy bill certainly suggests a sea change from the Nixon, Reagan, and Gingrich eras, when proposing a block grant was the magic elixir for making social programs disappear. Going forward, arguments from the federal government’s superior fiscal capacity seem likely to become decreasingly controversial. President Trump’s bizarre attempt to blame Puerto Rico for lacking the financial capacity to provide its own disaster relief cannot help critics of the superior capacity model.

I also argued the ACA’s near-universal coverage provisions reflect a sharp move away from social welfare policy’s longstanding attempts to separate the worthy from the unworthy poor, in part through behavioral requirements and in part through demographic limits on which low-income people may qualify for aid. This is in part a more generalized version of Abbe Gluck’s point about shifting the framing from individual responsibility toward social solidarity. It may prove to be limited to health care, but the broader legitimation of empathy for childless adults at least opens up lines of argument that previously had been inconceivable in much of the country. NFIB v. Sebelius partially restored the categorical limitations of the old Medicaid, but by triggering state-level battles over Medicaid expansion it allowed the argument about demographic limitations on empathy to be replicated under conditions favorable to social solidarity (e.g., with the federal government bearing the vast majority of the cost and with hospital and business lobbyists aligned with progressives). Although a significant minority of states still have not embraced the ACA’s Medicaid expansion, opponents in most states have largely avoided direct attacks on the worthiness of childless adults.

Advocates of repeal-and-replace bills tried to argue that projected coverage losses were not real because they reflected individual choices to disenroll – and were widely ridiculed for doing so. And having this debate in the context of insurance rates cast the spotlight on the most sympathetic set of childless adults: those in late middle-age. The Trump Administration seems poised to grant some states Medicaid waivers that will impose various “worthiness” tests on Medicaid recipients; the reception that political and legal attacks on these waivers receive will tell us much about how far we have moved toward non-categorical social compassion.

The third area where I argued the ACA had transformed public law was taxation. The ACA’s intricate premium subsidy system administered through the federal income tax system seemed a forceful rejection of the notion of populist simplicity exemplified by the Tax Reform Act of 1986 and undergirding persistent public support for payroll taxes and “flat tax” proposals even from lower-income workers who fare much better under graduated income taxes.

The House Republicans attempted to invoke populist simplicity when they argued against tying their stripped-down premium subsidies to income. This compounded the impact of their huge withdrawal of funds so severely that they reintroduced a tepid means-test in their final bill. A better test of the viability of populist simplicity will come in the impending debate on tax legislation. Republicans are making invocations of 1986-style reform a mainstay of their argument for passing huge upper-income and corporate tax cuts. If this blows up in their faces, populist simplicity will be badly wounded.

Finally, I argued that the ACA represented a dramatic deterioration in the line between public and private. Private industry’s needs heavily influenced the ACA’s structure, provided the main conduit for providing its benefits, secured a central role in making substantive decisions about the extent of coverage within broad standards for actuarial value, and pressed regulation into service as a means of redistribution. Republicans pushed back against this comingling of public and private with complaints about excessive market regulation and about forcing men to pay for policies with maternity coverage. So, indeed, did some Democrats, with their renewed promotion of a single-payor plan. It is difficult to see attitudes about privatization played a significant role in defeating “repeal-and-replace” or that they will be prominent in single-payor’s continued failure to gain traction. On the other hand, the ACA’s public-private model facilitated strong industry opposition to Graham-Cassidy and some of its predecessors. And the specific question of regulatory redistribution received enough attention that similar attacks seem less likely to prevail in the future.

In sum, a full accounting of the Affordable Care Act’s constitutional significance must await its entrenchment, which may be years off. Nonetheless, the struggles of the past year offer tantalizing hints of some fairly dramatic changes in the substance of, and our discourse about, public law.

Posted 2:13 PM by David Super [link]