Sally Pipes: Resolutions for a do-something Congress

Here’s a New Year’s resolution for the new Republican Congress: Resolve to shed the “do-nothing” moniker.

With Republicans in control in the Capitol and a Democrat in the White House, two years of political gridlock seems certain — especially over the president’s signature achievement, Obamacare.

It will be virtually impossible to repeal Obamacare because of the president’s veto pen. But there’s another way forward. Republicans should focus on scrapping the most unpopular parts of the law — those that even congressional Democrats may want to see go.

The GOP can start by introducing a bill to eliminate the Independent Payment Advisory Board (IPAB). This unelected panel of bureaucrats is tasked with controlling Medicare spending. If the program’s costs surpass a certain growth rate, the board can slash reimbursements for health care providers.

IPAB’s proposals become law unless Congress offers alternatives that reduce costs the same amount.

IPAB-ordered cuts could cause doctors to reduce the number of Medicare patients they’ll see — or compel prescription drug firms to limit the availability of the latest medications. Given those potential consequences, it’s no wonder the president has declined to name anyone to the board.

In the last Congress, a bipartisan group of 227 lawmakers introduced a bill that would have repealed IPAB. A new one could dust off that legislation right away.

IPAB isn’t the only provision of Obamacare the administration has been reluctant to implement. The president’s team has twice delayed the employer mandate, which, as of this month, requires businesses with 100 or more workers to offer 70 percent of their full-time employees insurance. By January 2016, such firms must cover 95 percent of workers.

Congress should delay it indefinitely.

According to the Robert Wood Johnson Foundation, the mandate will increase the number of people with insurance coverage by just 200,000. For that 0.6 percent jump in the insured rate, the economy will lose the equivalent of 2.3 million jobs by 2021.

That’s partially because the mandate discourages businesses from expanding. Moving from 49 to 50 employees will cost a business up to $40,000 a year in penalties.

Obamacare’s other major mandate — requiring individuals to obtain insurance — should be Congress’s next target. The fee for being uninsured in 2015 will jump to $325 per person or 2 percent of taxable household income, whichever is higher.

Nearly two-thirds of Americans oppose the individual mandate. That number could climb as Americans file their taxes this spring. Some 4 million people will face charges on their tax returns for going without insurance in 2014.

Republicans lack a filibuster-proof majority in the Senate, so they can’t simply repeal the individual mandate.

But they can use budget reconciliation, which requires a simple majority for budget-related changes. The U.S. Supreme Court upheld the individual mandate as a tax in June 2012. Republicans can use that ruling to undo the mandate.

But Congress must do more than repeal parts of Obamacare. The GOP must begin replacing it with reforms that will truly improve access to affordable health care.

First, Congress must save Medicare and Medicaid from financial ruin. The government projects that Medicare spending will double over the coming decade, to almost $1 trillion. Medicaid spending will exceed $850 billion.

Lawmakers can keep these programs solvent by offering recipients means-tested vouchers. Such a move would provide assistance to those who need it while harnessing the power of market competition to lower costs for everyone.

Second, Congress can expand funding for state-level high-risk pools to cover hard-to-insure patients with pre-existing conditions. Well-designed pools would redirect spending to the sickest patients, and by isolating them from the insurance pool, reduce rates for the healthy.

Third, Congress should encourage the growth of health savings accounts paired with high-deductible policies. These tax-free savings plans have boomed in popularity. It’s not hard to see why.

Individuals — not employers or insurance companies — own the money in their HSAs. They can shop around for care and spend their health care dollars as they see fit. Such consumerism reduces health costs overall. Indeed, a recent RAND study found that families spend 21 percent less with HSAs.

Big New Year’s resolutions often go unfulfilled. But if the new GOP-led Congress works steadily toward its goal of repealing and replacing Obamacare, it might just stick to its resolution — and become a “do-something” Congress on health care.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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