‘Repeal Now, Replace Later’ Will Kill the GOP’s Health-Care Reform

When King Solomon proposed splitting the baby, he knew that actually splitting the baby would have killed it. It was a ruse to save the child. Yet some Republican senators don’t seem to understand that splitting the GOP health-care bill — the “repeal, then replace” approach — will similarly kill both the prospects of health-care reform and quite possibly the GOP’s control of Congress.

Repealing Obamacare without a replacement is a terrible idea, and Democrats are salivating at the prospect that Republicans will be stupid enough to go through with it. Here is why:

Right now, Obamacare is imploding and Democrats own it. Every time another insurer bails out of the Obamacare exchanges — leaving more Americans without access to any Obamacare-compliant insurance plans at all — the blame goes to the Democrats. But as soon as Republicans repeal the law without a replacement, they will own the ensuing debacle. Every time an insurer pulls out, and Americans lose coverage, the GOP will get the blame — and rightly so.

Advocates of this approach insist that they would include a one-year delay of the repeal to ensure Americans currently on Obamacare have coverage while they work on a replacement. This is pure fantasy. Republicans are supposed to be the party that understands how free markets work, so they should know that insurers are not going to sit around and wait a year to pull out. As soon as Congress repeals Obamacare, they will start bailing out in droves and the already-teetering Obamacare insurance markets will collapse. Americans will start losing their health plans thanks to the GOP. Democrats will not help bail Republicans out. They will let the health-care system unravel, castigate Republicans for the fallout and ride the ensuing public outrage to victory in the 2018 midterm elections.

So what is the solution? It’s time for President Trump to close the deal on an Obamacare replacement bill in the Senate. The contours of such a deal are clear.

First, Mr. Trump should insist that the Senate pass the Medicaid reforms in the House bill that were negotiated between his budget director, Mick Mulvaney, and House Freedom Caucus Chairman Mark Meadows. The House version has a percapita growth rate tied to medical-cost inflation, while the Senate bill has far more drastic caps that are pushing away centrist senators who have otherwise agreed to structural changes in the program. The House reforms are the most far-reaching, conservative entitlement reforms since the welfare reform of the 1990s. Pass them.

Second, the president must side with the GOP governors in expansion states who say they need time and flexibility to ensure that the poorest of the poor are adequately covered. Obamacare did a bait-and-switch, covering poor, able-bodied men and women without children for the first time and paying 100 percent of the costs, with the federal share drifting down to 90 percent in 2020. It was a teaser rate, designed to lure states in — and it worked — but the system is now unsustainable. Under traditional Medicaid, the federal share ranges from 50 to 75 percent — which means that today an able-bodied single man gets a greater share of federal Medicaid funds than a disabled child. Republican governors are asking for seven years after the federal share reaches 90 percent to harmonize their Medicaid populations so that all of the poor, regardless of status, receive the same federal match. That is fair, and the president should push for it.

Third, he should stand by his demand that the Senate bill include a $45 billion fund for substance abuse and mental-health treatment. Republicans should be encouraging people to move from poverty to work, not trapping people in Medicaid because that is the only way they can receive appropriate treatment.

Fourth, Mr. Trump should insist that the Senate bill include the “Consumer Freedom Amendment” proposed by Sens. Ted Cruz (R-Texas) and Mike Lee (R-Utah), which allows insurers to sell health plans that don’t comply with all Obamacare regulations, so long as they sell at least one plan that does. Sen. Bill Cassidy (R-La.), who happens to be a doctor, has a way to make sure that risk pools for people with preexisting conditions work under the Cruz approach. Do it.

Finally, Mr. Trump should demand that the Senate nix the repeal of the Obamacare net-investment tax that benefits only those making $200,000 or more — and use the money to reduce deductibles for the working poor. Cutting taxes for the rich and paying for it with health-care cuts for the poor is grotesque. Mr. Trump should ask Republicans to find some other way to pay for their reforms.

Republicans have a historic opportunity to pass the most revolutionary health-care and entitlement reforms in a generation. It should not require the wisdom of Solomon to do it.

Marc Thiessen is a fellow at the American Enterprise Institute, and the former chief speechwriter for President George W. Bush.