Ramesh Ponnuru: Winning the Obamacare suit would be a disaster for Republicans

FILE - This Oct. 23, 2018 file photo shows HealthCare.gov website on a computer screen in New York. A federal judge's ruling that the Obama health law is unconstitutional has landed like a stink bomb among Republicans, who've seen the politics of health care flip as Americans increasingly value the overhaul's core parts, including protections for pre-existing medical conditions and Medicaid for more low-income people. (AP Photo/Patrick Sison)

There’s an important bit of contingency planning that Republicans have neglected to do. Neither in the White House nor on Capitol Hill are they prepared for the possibility that their lawsuit against Obamacare will succeed.

Most observers don't expect the courts to strike down the law, and Tuesday's oral arguments in a New Orleans federal courtroom didn't change many minds. If the suit is successful, however, it will create an acute problem for a lot of people. Insurers will again be able to discriminate against people with chronic conditions. Many states' budgets will be thrown into turmoil as Washington stops covering most of the tab for the expansion of Medicaid coverage to households just above the poverty line. People who get their insurance through Obamacare's exchanges will stop receiving the tax credits that make it affordable.

The changes would be much more radical than what the Republicans’ failed Obamacare-repeal legislation from 2017 would have brought. That proposal would have replaced some of Obamacare’s subsidies and regulations, and would have been phased in over several years. If the Affordable Care Act were to lose in court, and Congress and the president failed to agree on legislation afterward, Americans would go through the largest disruption in health care arrangements that Washington has ever imposed.

In turn, that would create a political problem for Republicans. They have long said they wish to repeal Obamacare while making sure that its beneficiaries, especially those with pre-existing conditions, have access to affordable coverage. If a lawsuit they launched succeeds in delivering the first half of that agenda, voters will expect them to deliver the second. The Democratic majority in the House would presumably be able rapidly to pass a law that simply re-enacts Obamacare and prevents any disruption to it.

Republicans would then have three choices: pass their own dream health care bill; accede to the Democrats’ Obamacare-affirming bill; or find a bipartisan compromise.

Option one wouldn’t work. Congressional Republicans don’t agree themselves on what the ideal health care law should look like. Some don’t truly want to replace Obamacare: They would celebrate that the law had been nullified and call it a day. In the unlikely event that the Republican Senate managed to pass legislation, notwithstanding the party’s divisions and the Democrats’ ability to filibuster, it still wouldn’t become law without passing the Democratic House. So either the Republicans would have to compromise with the Democrats in the end, or they would accept inaction and blame it on the Democrats for not going along with their conservative ideas. The Democrats’ case — “We are ready to pass a simple extension of the law and protect everyone” — would likely go over better with voters. Republican senators up for re-election in swing states might find the pressure to side with the Democrats irresistible.

Option two would be deeply unattractive for Republicans. It would mean that years of opposition to Obamacare, and the lawsuit itself, were pointless. It would demoralize conservatives and open Republicans to ridicule. They are going to want to avoid this scenario at nearly any cost.

That leaves option three: a compromise. There's one that might make sense. Republicans could agree to renewing Obamacare's subsidies and regulations; in return, the Trump administration's regulatory changes to the program would be put into law. Short-term insurance plans, association health plans, and expanded health reimbursement accounts would then become part of binding law that no future Democratic administration could abolish on its own. Both parties would get some bragging rights, and voters would get more stability instead of chaos.

A lot of conservatives would hate that deal, even if Republicans added that they were accepting this modified version of Obamacare only temporarily, and would legislate against it again the next time they have both houses of Congress. It’s a deal that assumes that the politics of health care after the lawsuit would favor the Democrats. It would have to pass with some Republican and some Democratic votes. Rounding up the Republicans would almost certainly require Trump to go all-in for it, selling it as a big victory for his administration’s health care policies and demanding his congressional allies support it.

There's no sign the White House is ready to do any of this. Which is why the best political outcome for Republicans is probably for the lawsuit to fail, at which point they can complain about the judges who had just delivered them from a nightmare.

Ramesh Ponnuru | Bloomberg News

Ramesh Ponnuru is a Bloomberg Opinion columnist. He is a senior editor at National Review, visiting fellow at the American Enterprise Institute and contributor to CBS News.