Obama Calls the Republican Healthcare Bluff

| Mon Feb. 28, 2011 1:58 PM EST

The New York Times reports that President Obama plans to endorse a change to the healthcare reform law that would allow states to opt out from the start, rather than having to wait three years:

Senior administration officials said Mr. Obama would reveal to the National Governors Association in a speech on Monday morning that he backs legislation that would enable states to request federal permission to withdraw from the law’s mandates in 2014 rather than in 2017. The earlier date is when many of the act’s central provisions take effect, including requirements that most individuals obtain health insurance and that employers of a certain size offer coverage to workers or pay a penalty.

....The legislation would allow states to opt out earlier from various requirements if they could demonstrate that other methods would allow them to cover as many people, with insurance that is as comprehensive and affordable, as provided by the new law....If states can meet those standards, they can ask to circumvent minimum benefit levels, structural requirements for insurance exchanges and the mandates that most individuals obtain coverage and that employers provide it.

Italics mine. I suspect this is not as big a deal as it seems. Basically, Obama is calling the bluff of Republicans who insist that they can build a healthcare system that's as extensive and affordable as PPACA using some combination of tea party-approved "free market" principles. He's telling them to put their money (or, rather, money from the feds) where their mouths are, which will probably demonstrate fairly conclusively that they can't do it. It's possible that a state like Oregon might enact a more liberal plan that meets PPACA standards, but I doubt that Alabama or Tennessee can do it just with HSAs and high-deductible health plans.

Still, we'll see. This is a chance for conservatives to show that they have a better healthcare answer in the real world, not just as talking points at a tea party rally. Obama is betting they'll fail, and he's also betting they'll tear each other apart arguing over details while they do it. Life is easy when all you have to do is yell "Repeal Obamacare!" but it gets a lot harder when you have to produce an actual plan.

UPDATE: Ezra Klein suggests that Republicans have no intention of supporting this legislation: "Now that Obama has admitted it's not a threat to the Affordable Care Act, a lot of the appeal for Republicans dissipates." But it does become a way for Obama to demonstrate how reasonable he is. See, we gave them a chance to implement their own policies, but they turned us down. Maybe so.

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