Democrats face difficult ACA fight in 2017, even if Clinton wins

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(Bloomberg) -- Everyone has plans for the Affordable Care Act next year.

After news broke Monday that premiums for the ACA will rise an average of 22% next year, Democratic presidential nominee Hillary Clinton spent the week defending the healthcare law, saying its problems are fixable. She called for lowering the Medicare buy-in age and again advocated for a so called public option—a government-run competitor to private insurers. While polls show her leading Republican Donald Trump with just 10 days to go before the election, a Clinton administration likely would find itself caught between liberal lawmakers wedded to the politically unviable public option and Republicans who want to scrap the law entirely.

QuickTake ACA, Assessed

“I certainly intend to reach out to Republicans and independents, the elected leadership of the Congress,” Clinton told reporters on her campaign plane Wednesday. “I’m going to be doing everything I can to reach out to people who didn’t vote for me because I want to be president for everybody and I think that’s going to require a lot of effort on my part to demonstrate my commitment to that.”

Early signs suggest such overtures wouldn't be well received.

“A couple months ago I was hoping that once the election was over that cooler heads would prevail when it comes to healthcare reform,” said Jim Manley, a Democratic strategist and former spokesman for Senator Harry Reid of Nevada. “Based on the way the election has turned out, I’m not so sure I see that happening.”

Trump and several down-ballot Republican candidates have used the premium increase as a cudgel against their Democratic opponents. “Obamacare is just blowing up,” Trump said at a campaign stop Tuesday in Florida, where he claimed premiums are actually rising 60-, 70- or 80% even though he offered no proof for the higher figures. Repealing the law would be his first order of business as president, he said.

The Clinton campaign defended the law, noting that 20 million people have gained insurance and young adults can stay on their parents' insurance plans until they're 26 years old. “Donald Trump would rip up the ACA, reverse the progress we have made and start this fight all over again,” Clinton spokeswoman Julie Wood said in a statement. “Clinton has a serious plan to improve choices and increase competition, including a public option and a Medicare buy-in.”

Public option

The public option has become the focal point of Democrats' plans to improve the healthcare law. Supporters argue that the added competition would help keep costs down for consumers, especially in areas where fewer private plans are available. Opponents, including Republicans and insurance companies, say it would hurt the insurers and eventually lead to a government takeover of the industry.

Clinton voiced her support for the public option over the summer, as she and her primary opponent, Senator Bernie Sanders of Vermont, debated several policy proposals that pushed her further to the left. Her support, along with announcement by major insurers like Aetna Inc. of a plan to pull out of the ACA network, prompted a second wave of public option support from liberal groups and Democrats.

“There’s a lot of things we need to do...but the cost of health care and the high deductibles is something affecting virtually every family in America,” said Senator Jeff Merkley, a Democrat from Oregon and one of the leaders of the movement. “I would love to see a public option on the president’s desk in the first 100 days.”

The public option failed to garner enough votes to pass in 2010, and would face even steeper odds in 2017. Many of the forces that opposed the bill and lobbied against it also oppose Clinton's proposals. The pharmaceutical industry is preparing to fight off efforts to lower the costs of prescription drugs, another key part of Clinton's healthcare agenda.

David Merritt, the executive vice president of public affairs and strategic initiatives of industry trade group America's Health Insurance Plans, said that the public option would make things worse, and argued that there are better alternatives to expand coverage than lowering the Medicare eligibility age.

“The exchanges obviously have some serious challenges that need to be solved, and no matter who’s president, no matter who’s in Congress, they need to work together to solve some of these problems,” he said. The industry backs closing loopholes in special enrollment periods that allow people to sign-up for insurance when they're sick and drop it when they're well and allowing companies to offer plans with fewer benefits.

Some of Clinton's Democratic allies have more pressing legislative issues than the public option. Tom Leibfried, a health care lobbyist for the AFL-CIO, said repealing the so-called Cadillac tax, an excise tax on high cost health care plans offered by employers, is more of priority. Removing the Cadillac tax would fare well as part of a larger legislative deal covering tax policy or infrastructure funding, he said. The tax is opposed by Republicans, liberal Democrats, and Clinton herself, who called for its repeal in September 2015.

“There are things that they're gonna have to get done and we'll have to look to some of these major legislative deals to move the left's agenda,” Leibfried said.

Merkley and other liberal senators like Sanders and Elizabeth Warren would also struggle to find the votes within their own caucus for a public option. In September, only 33 senators signed on to a non-binding resolution in support of the public option. Vice presidential nominee Tim Kaine did not, along with several Democrats from states that lean Republican.

‘Dead on Arrival’

Even if incoming Democratic senators are more open to backing a public option, Republicans have made their position clear. “It’s gonna be dead on arrival,” said Rick Tyler, a GOP strategist and former spokesman for Senator Ted Cruz's presidential campaign.

Republicans have already shown some resistance toward working with Clinton. Both Cruz and Senator John McCain have said they favor leaving the currently vacant Supreme Court justice seat empty if Clinton wins. House Oversight Committee Chairman Jason Chaffetz said this week that he has two years worth of material lined up to probe Clinton's record.

House Speaker Paul Ryan has said he would repeal and replace the entire healthcare law with a series of conservative reforms like buying insurance across state lines and offering tax credits. “The president recently compared the ACA to a Samsung Galaxy Note 7, and he's right: this disastrous law is blowing up. But at least you can return the phone,” Ryan said in a statement.

Manley said Ryan would be forced to choose between sticking with Republican talking points or negotiating with Democrats. “The speaker has got his proposal, flawed though it may be, but he’s fighting upstream against a massive onslaught of Trump rhetoric that’s just drowning out everything,” Manley said.

But Tyler added that Ryan would have to make his case to the American people and let the voters pressure the White House. “It can’t just be a negotiation between the White House and the Congress, that never works,” he said.

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