How Trump 'making nice' with the Democrats could open door to Obamacare fix

• Democrats and Republicans can come together on Obamacare if they can agree on a couple of principles.
• Republicans must admit they cannot unilaterally repeal and replace Obamacare.
• Democrats will need to admit that throwing more money at a 'failing system' is not the answer.

Kevin Lamarque | Reuters

President Donald Trump meets with Senate Majority Leader Mitch McConnell (L), U.S. Senate Democratic Leader Chuck Schumer (2nd R), House Minority Leader Nancy Pelosi (R) and other congressional leaders in the Oval Office of the White House in Washington, September 6, 2017.

Now that Trump is making nice with the Democrats, a bipartisan solution to Obamacare could be more possible than we thought.

Here's what both parties have to come to terms with first.

Democrats will need to get past their mantra that Obamacare is only "imperfect" and admit that because of the design of Obamacare's markets, the insurance exchanges have failed to attract enough people to create affordable health insurance—and that just throwing more money into a failing system is not the answer.

They will have to admit that 40 percent of all American households make more than the subsidy cutoff of 400 percent of the federal poverty level and that the program has been particularly harmful to these people because their premiums and deductibles keep rising, making insurance unaffordable for them. They will also have to admit that Medicaid is not sustainable in its current form and severely needs long-term reforms in order for the federal government to be able to continue providing its share of the costs.

Republicans will have to admit that they can't unilaterally repeal and replace Obamacare. They will also have to admit that most American households not eligible for employer-based insurance, Medicare, or pre-Obamacare Medicaid cannot afford to buy health insurance on their own and the lowest income people cannot even afford the standard deductibles. They need to admit that even the pre-Obamacare health insurance premiums were unaffordable for most of these people. They will also have to recognize what the vast majority of Americans already know—the days of the insurance industry playing the sick against the healthy are over and should never return.

Unless enough Democrats and Republicans can come to the table agreeing to these broad principles they are just wasting everybody's time with their hollow assurances that they are willing to work together in a bipartisan way.

In this regard, the debate over containing Medicaid costs is interesting.

A number of Democrats have called for serious consideration of a Canadian-style single-payer health insurance system in recent weeks.

And, the Republicans have proposed capping what is clearly becoming unsustainable long-term Medicaid spending as part of both the now failed House and Senate bills.

What is at the heart of the successful single-payer health insurance systems in Europe and Canada? An annual cap on spending—a global budget.

What is at the heart of these recent Republican Medicaid proposals? An annual cap on spending—a global budget.

For Republicans the global budget was to set a federal Medicaid baseline budget and then ultimately, in the Senate bill, increase it only at the rate of the consumer price index thereby reining in costs over a long-term glide path to sustainability.

Let me suggest that in detailing a global budget single-payer health care system, these Democrats would also have to set a cap, just like Canada and the European countries do each year, so that the program's costs did not become out of control. But, Democrats might set that cap at a more generous level than Republicans.

OK, both sides would appear to understand the importance of a global budget—whether it be for just Medicaid or for the entire system as some democrats are proposing—in order to achieve long-term sustainability.

Let the negotiations begin on the details for how to do it.

The best way to negotiate those details is to take the process out of the backrooms and into the open through regular order—where the relevant Congressional committees hold hearings and work together to solve the problem.

While there is currently nothing close to a consensus to move to a single-payer Canadian-style health insurance system, the legislation Republicans proposed this summer to "repeal and replace "Obamacare was even less popular.

It is clear Americans want the Congress to focus on fixing Obamacare more than hearing radical proposals from either side.

To most Americans, these ideas likely sound like common sense. But in Washington—among Republicans and Democrats—that has clearly not been the case.

When and if that finally changes, the rest of health insurance reform will just be about ironing out the details.

Commentary by Robert Laszewski, the president of Health Policy and Strategy Associates. He has 20 years of experience in the insurance industry, serving as a chief operating officer for nine of those years, before beginning his Washington, D.C. policy- and market-consulting business.

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