Lo, what light doth shine o’er distant mountain peak? Could it be Republicans finding a shred of common sense? (More)

I live on Squirrel Standard Time. We get up early to gather breakfast, which doctors say it’s the most important meal of the day health-wise, and that’s especially true if you eat breakfast before Things That Eat You wake up. So I’m always up to see the dawn, except for the morning after that embarrassing bourbon on Incident Street when I was sent to cover the GOP Leadership Conference in New Orleans. But I digress.

My point is, I’m seeing faint traces of dawn with Republicans on the Affordable Care Act. Not full-fledged, fur-warming, chitter in delight morning, mind you. But it no longer feels like we’re stuck in the wee hours.

The first clue came last week, when House Republicans passed a bill that prevented planned Medicare provider payment cuts, the so-called “doc fix.” Buried in that was a subtle but important change to the ACA: lifting the deductible caps for small business group health insurance policies. There are no such caps for individual or large group policies, and they were only added for small business groups because former Sen. Olympia Snowe (R-ME) demanded them. Then, after voting for the ACA in the Senate Finance Committee, she voted against it on the Senate floor.

The $2000 individual and $4000 family deductible caps would have blocked small business groups from using the silver and bronze plans that have been most popular in the ACA exchanges. Those plans also offer the lowest premiums, so small business groups would have had to pay higher premiums than individuals or large groups. It was both an unsuccessful concession to win a vote and bad public policy, and it’s good that House Republicans voted to end it.

Even if most of them didn’t know it. The bill passed by a voice vote, and most House Republicans didn’t know about the small business group fix until the Drudge Report slammed them for “expand[ing] Obamacare.” Speaker John Boehner quickly explained that they had in fact repealed part of the ACA.

Which was true. They repealed an unnecessary provision that made it harder for small business groups to buy health insurance. So Drudge was also right. House Republicans voted to expand the ACA. Really.

Yesterday the Wall Street Journal applauded the change, and criticized the Tea Party’s outrage:

[S]ome conservatives have become so politically disoriented by ObamaCare that preserving its mistakes is more important than helping Americans hurt by the law. The theory seems to be that “improving” ObamaCare will weaken the coalition for repeal and therefore the economic torture dials should be turned up to 11. If the law is more punitive and dysfunctional, more people will want to get rid of it in toto.

But the reality is that the law can’t be repealed until President Obama leaves office in 2017. Patience is less a virtue than a necessity, and rooting for voters to be harmed is not a helpful electoral coping strategy. A better political strategy is to offer an agenda going into the 2014 election that addresses the damage ObamaCare is doing to the individual and small-business insurance markets until a larger fix is possible.

That’s also a pretty good summary of the conservative outrage over President Obama’s executive fixes to various provisions. Most of those were changes that conservatives demanded, such as allowing people who liked junk insurance to keep their policies, despite insurers not complying with the ACA’s grandfather clause requirements. Others were sensible deadline shifts to help people enroll despite early glitches at the Healthcare.gov website. In other words, President Obama was trying to make the law work as well as possible for as many people as possible.

And Republicans hated that. They wanted the law to be as painful as possible for as many people as possible, to fuel their incessant drive for repeal. But GOP leaders seem to have finally realized that the polls were turning against them. Most Americans don’t want to repeal the ACA. Most Americans either like it as-is or want to fix it. The New Republic’s Brian Beutler explains the new GOP strategy:

The theory – and I think it’s basically correct – is that Republicans will be more successful moving health policy in a conservative direction over time if they’re willing to accept certain on-the-ground realities. But the corollary isn’t just that repealing Obamacare won’t be possible without an alternative at hand, but that an alternative will have to be implemented alongside Obamacare so that Obamacare can be phased out slowly. The conservative position is slowly shifting from repeal and replace, to replace and repeal. Much like you’d never tear down a structurally weak bridge without first building a sound one parallel to it, the right has awakened to the fact that Obamacare can’t be scrapped on the basis of a promise to clean up the incredible mess sometime in the future.

Like Beutler, I don’t think replace-and-repeal will ever happen. Republicans have been peddling “Obamacare doomed” stories ever since it passed. But those have mostly been stories to pump up their own base.

The ACA is here and it seems to be working, although the real test will be insurance premium changes this fall as MIT economist and Romneycare architect Jon Gruber explained yesterday in an interview at HealthInsurance.org:

Harold: So how are you feeling about the Affordable Care Act today?

Jon: Feeling pretty good. I mean, I think that certainly reports of its demise are greatly exaggerated as Mark Twain would say and it is looking as good as we could hope at this point. But the bottom line is it’s still too early to know for sure. We know it hasn’t failed. We know that we have enough people, so it’s working, but we don’t know really the two critical things. One is, we don’t know how many people have actually gained insurance coverage, and we also don’t know really enough about the health mix of whose in and what’s going to happen to premiums.

Harold: So when will we get some information about that last point?

Jon: The information is going to start to come out this summer. What we have to be careful about, it’s going to come out in dribs and drabs. In particular, the states where the numbers are bad might release them first because the states that oppose Obamacare might run to release their rates saying, “look how much rates went up.”

I think we have to be very careful to wait till the rates are in from everywhere, including places where Obamacare went well like California, and then look at aggregate effect and I think the relevant benchmark is 10 percent. Doing some research now, which will be out in a few weeks from the Commonwealth Fund, which shows that if you look at the rate filings in the individual insurance market in the pre-ACA period, the average annual rate of growth was 10 to 11 percent in the individual market. So that should be our benchmark.

Premium increases of 20% or more for 2015 would be “a problem,” Gruber said, while single-digit hikes would be “a big win.”

It might just turn into a Democratic victory in the U.S. Senate, and that might force yet more Republicans to see the light. And that would truly be a dawn worth celebrating.

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Good day and good nuts