Next year will see the Republican Party control the presidency, House, and Senate, and they will likely waste little time before beginning to dismantle President Obama’s legacy, including signature programs such as Obamacare. Ursula Hackett argues that Obamacare’s ‘submerged’ delivery, via subsidies for individuals to buy insurance from private markets rather than direct government provision, may mean that the GOP find that it is not easy to repeal

Hackett, Ursula

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12/14/2016The submerged politics of Obamacare may make it harder torepeal than Trump and the GOP realizeblogs.lse.ac.uk/usappblog/2016/12/14/the-submerged-politics-of-obamacare-may-make-it-harder-to-repeal-than-trump-and-the-gop-realize/Next year will see the Republican Party control the presidency, House, and Senate, and they willlikely waste little time before beginning to dismantle President Obama’s legacy, including signatureprograms such as Obamacare. Ursula Hackett argues that Obamacare’s ‘submerged’ delivery, viasubsidies for individuals to buy insurance from private markets rather than direct governmentprovision, may mean that the GOP ﬁnd that it is not easy to repeal.The day after Donald Trump’s stunning victory, former Obama White House Counsel Gregory B.Craig gave a bleak assessment of the current President’s policy legacy: “Nothing with Obama’sname on it is safe. It will be: Let’s pull out the list of Obama’s sacred cows and slaughter them, one by one.”Many stars are aligned for the prosecution of Trump’s policy agenda (and the repudiation of his predecessor’s):Republican victories across state legislatures, governorships and in Congress, an emboldened Tea Party andCongressional Freedom Caucus, and a Democratic Party dazed, divided, and in danger of descending into bitteracrimony. Political scientist Stephen Skowronek reminds us that the presidency functions best when it is directedtoward dislodging established elites, destroying the institutional arrangements that support them, and clearing theway for something entirely new. Trump promised all of these things; his victory is bluntly disruptive.The institutional constraints of the separated American political system, inertial forces that have only thickened overtime with the growth of the American state, provide some sources of comfort to the new President’s opponentsinsofar as they slow the process of governance and provide sources of oversight. As every student of Americanpolitics knows, Congress, not the President, will need to pass his trillion-dollar infrastructure bill, repeal gun-freeschool zones, and scrap regulations that limit pollution and coal production. Eﬀorts to increase the production offossil-fuels, conduct surveillance of Muslim communities, or step-up immigrant deportation eﬀorts would likely facecourt challenge.Budget reconciliation in Congress, the strength of Republican partisanship, fear of Tea Party challenge, and thestrategic use of executive orders will likely enable President Trump and his Republican allies to circumvent some ofthe constraints imposed by the separated system and keep reluctant co-partisans in line. But one further constrainthas received little attention from pundits, and that constraint could prove to be the most powerful of all: policydesign.Submerged Policy Design One priority upon which the new President and the Republican Congress are in full agreement is the repeal of thePatient Protection and Aﬀordable Care Act known as Obamacare. The ﬂagship 2010 law aimed to decrease thenumber of uninsured Americans, reduce healthcare costs and increase the quality of health insurance through amixture of regulation, subsidies and mandates. By many metrics the law has succeeded: banning insurancecompanies from discriminating against patients with pre-existing conditions and reducing the proportion of uninsuredto its lowest level ever. But it has also faced many problems, including a riskier-than-expected risk pool for healthexchanges leading to rate hikes and insurer withdrawals. Phased in slowly over six years, this extraordinarilycomplex law utilizes what scholars call ‘submerged’ policy delivery mechanisms – a source of both strength andweakness.1/3Submerged policy delivery mechanisms involve a government subsidizing individuals or organisations to buyservices in private markets that would otherwise be provided by the state directly. Although the US oﬀers directly-taxpayer funded healthcare for some categories of people, most healthcare beneﬁts are paid for through employer-provided or private health insurance for many working-age adults, subsidized in large part by government funds.Employing subsidies rather than direct provision tends to magnify informational asymmetries between ordinarycitizens and the private organisations – insurers, hospitals, pharmaceutical companies – who receive subsidies,because the beneﬁts are provided below the radar. As with tax credit school vouchers, subsidized student loanmarkets, or tax deductions for home mortgage payments, using private mechanisms for policy delivery makes itharder for citizens to understand the nature and scope of government action. The result is inaction and apathy atbest, and racialized anti-government fury at worst. Submergence helps explain why Obamacare is still a politicalfootball despite its success reducing the ranks of the uninsured.Conservatives have historically favoured the use of submerged mechanisms for policy delivery because theyreplace direct social provision with subsidized market-based alternatives. Many submerged programs areregressive, because tax subsidies beneﬁt those who pay more tax. And it is easier to claim credit for shrinkinggovernment if services are delivered through private companies, even if the size of subsidies and the amount of taxforegone end up larger than the cost of comparable direct government provision. Reforming these programs istough. The private organisations that beneﬁt most from the subsidies are easily mobilized in their defense, while theregular public is unaware of the nature, scope, and sometimes even the existence, of the subsidy. That usually suitsconservatives: avoid the appearance of ‘big government’ while supporting private providers ﬁnancially.Therein lies a paradox for 2017: the weakness of Obamacare is its strength. Recent analysis has focused on thediﬃculties Trump and his conservative allies will have dismantling some of the most visible beneﬁts of Obamacare –such as the ability of young people under 26 to stay on their parent’s insurance and the ban on lifetime coveragelimits. If these visible beneﬁts are binned, the public backlash will begin. But ironically for conservatives, thesubmerged mechanisms they favor could prove an even bigger stumbling block in dismantling the law they hate.Subsidy beneﬁciaries, including hospitals, health insurers and industry trade groups, are already mobilizing inopposition to repeal. New health insurance exchanges deliver millions of new customers to private insurers. Closingthe Medicare Part D prescription drug coverage ‘donut hole’  supports consumers’ purchase of pharmaceuticalcompany drugs. Subsidizing insurance premiums means insurers’ rate hikes are partly swallowed by thegovernment.2/3The submerged politics of Obamacare makes it diﬃcult for Democrats to drum up public support in the law’sdefense, but those same features make it risky for Republicans to defy private organisations’ opposition to repeal.Obamacare is in trouble, but the submerged politics of repeal will likely prove a headache for the new President andhis Republican allies.Featured image credit: NOBama NoMas (Flickr, CC-BY-SA-2.0)Please read our comments policy before commenting.  Note:  This article gives the views of the author, and not the position of USAPP– American Politics and Policy, nor ofthe London School of Economics.  Shortened URL for this post: http://bit.ly/2gATDzi______________________About the authorUrsula Hackett – Royal Holloway, University of LondonUrsula Hackett is Lecturer in Politics at Royal Holloway, University of London, and a BritishAcademy Postdoctoral Fellow. She joined Royal Holloway in 2016 as Lecturer in Politics, a post shecurrently holds in conjunction with a British Academy Postdoctoral Research Fellowship on thepolitics of vouchers – programmes that transform the state by delegating responsibility for corepolicy functions to private actors. A former PPE-ist, she was previously based at the University ofOxford as Junior Research Fellow in US Politics.  Her research focuses on American PoliticalDevelopment, federalism, public policymaking, education and religion.CC BY-NC 3.0 2015 LSE USAPP3/3

The submerged politics of Obamacare may make it harder to repeal than Trump and the GOP realize

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