With control over every lever of federal government, Republicans have failed to do what they have repeatedly and loudly promised to do for seven years. It is nothing short of a colossal failure. This post is an effort to help people understand how this failure came to pass and to understand a bit more about how terrible this bill really was.
I’ll start with why this bill was so bad from a policy perspective and, consequently, failed to garner broad support. Then, I’ll explain why creating an artificial deadline of 18 days to change the American health care system (which accounts for nearly 20% of the country’s economy) after a horrific roll out and then bringing it to the House floor without enough votes to succeed was… well, incredibly stupid. Finally, I’ll talk about possible ways forward for progressives on this issue.
“We’re going to have insurance for everybody,” Donald Trump lied in January. In a conversation with The Washington Post, Trump continued, “[t]here was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.” People, he asserted, “can expect to have great health care. It will be in a much simplified form. Much less expensive and much better”.
Back in 2015, Trump had publicly proclaimed on Twitter, as is his wont, that he would make no cuts to Medicaid if he was elected.
In a surprise to no one, the future president was simply making things up on both occasions. What is surprising, however, is the fact that the Republican plan, the American Health Care Act (AHCA), utterly failed to come up with workable alternatives to the parts of Obamacare which Republicans have criticized the most.
In no particular order, those complaints were: 1.) Rising premium costs; 2.) Loss of coverage (i.e., “Obama lied when he said you could keep your doctor and your plan!”); and 3.) The individual mandate requiring people who don’t sign up for health care insurance to pay a fee.
Regarding premiums, it bears stating that the Obamacare-induced “crisis” of rising costs isn’t as much of a crisis as Republicans have let on. More than 90% of Americans who have health care insurance get it through work or the government. Premium rates for that group have actually risen relatively slowly in recent years. The rest of the insured population gets coverage directly from insurance companies or through the Obamacare marketplace exchanges. Of those who get care through the Obamacare exchanges, approximately 85% receive government subsidies that alleviate cost increases. Therefore, according to a recent analysis by the The New York Times, only approximately 3% of all Americans have been affected by rising premiums.
Don’t take the #failing Times‘ word for it. Here’s what the nonpartisan Congressional Budget Office (CBO) says about the matter:
Under current law, most subsidized enrollees purchasing health insurance coverage in the nongroup market [people who don’t get health care from work or the government] are largely insulated from increases in premiums because their out-of-pocket payments for premiums are based on a percentage of their income; the government pays the difference.
In fact, there is data indicating that premium costs would have risen more without Obamacare. According to the Kaiser Foundation, family plan premiums rose about 20% from 2011 to 2016. However, rate increases were far steeper in the ten years before Obamacare’s enactment. From 2006 to 2011, rates rose 31%. From 2001 to 2006: a staggering 63%. While correlation doesn’t necessarily mean causation, those numbers should give critics of Obamacare serious pause.
In any case, even assuming that the rising premium rates problem is as bad as Republican have argued, it is simply astonishing that their replacement plan would have made it immediately worse. As the number-crunchers at the CBO explained, “average premiums for single policyholders in the nongroup market would be 15 percent to 20 percent higher than under current law” up until 2020. That’s because fewer healthy people would sign up due to the elimination of the individual mandate, thereby making the overall pool of insured people less healthy. That increases costs for insurance companies as they pay for unhealthy people’s care but have less healthy people paying premiums. Insurers would then, naturally, pass on those costs to the consumer.
Eventually, after 2020, average premium costs would have started to come down under the AHCA. However, Republicans planned to accomplish that not through some mathematical wizardly but through cruelty. Simply put, the plan would have made insurance so unaffordable for poorer, older Americans that they would be forced out of the marketplace altogether! Without having to spend as much money on desperately-needed care for older people, insurance companies could afford to offer younger people lower premiums. Brilliant.
This brings me to the second point: coverage. With the CBO’s scathing assessment that 24 million people would lose their health care due to the AHCA, the suggestion that the Republicans are even moderately concerned about coverage is downright laughable. A whopping 14 million people would have lost care by the end of next year alone. The planned $880,000,000,000 cut in Medicaid spending and an age-based tax credit system that wouldn’t have varied depending on income or the cost of insurance in different parts of the country would have devastated the households of our most vulnerable.
As I mentioned above, older Americans under the Medicare-eligible age of 65 would have simply lost coverage because they wouldn’t be able to afford their premiums out of pocket. Saying that the Republicans are trying to give vulnerable Americans more freedom to choose their health care plan is the equivalent of saying that you have the freedom to buy a gold-plated private Boeing 757.
Perhaps these numbers shouldn’t be surprising since it’s been House Speaker Paul Ryan’s dream since college to eviscerate federal programs that help the poor.
Third, instead of coming up with a feasible alternative to the much lampooned individual mandate, the GOP wanted to replace it with a 30% surcharge on premiums for one year for anyone who went without insurance for two months. The reason for Obamacare’s individual mandate is twofold: incentivize people to get health care coverage before they get sick and increase the size of the pool of people participating in the marketplace to, in part, alleviate the costs for insurance companies required to accept people with pre-existing conditions. By making sure that people get insurance or else pay a penalty, it avoids lots of relatively healthy people cheating and only getting insurance after they get sick.
As liberal New York Magazine columnist Jonathan Chait wrote a few weeks ago, herein lies a major catch-22 for the GOP. After years of attacking the individual mandate as socialist government overreach, they cannot now go back to their voters with the mandate in place. This is despite the fact that it was a conservative Heritage Foundation scholar who came up with the idea in 1989 in the first place and a group of Republican senators embraced it as an alternative to the failed Clinton health care initiative in the 1990’s.
However, the GOP also doesn’t want to get rid of the very popular protection for people with pre-existing conditions. In trying to squeak their way between a rock and another rock, the GOP plopped the 30% surcharge on the table. It’s hard to see what a mere 30% surcharge would do to prevent people from taking advantage of the loophole. It makes economic sense for healthy people to wait until they need care to start paying for it (although they would need to wait until an open enrollment period in order to do so). It’s a sorry excuse for an incentive, and, as mentioned above, that’s why premiums would have gone up in the near term if the AHCA had come to fruition.
Now that I’ve talked a bit about why the “plan” was terrible policy, I’ll turn to why it made terrible politics too.
The ultimate problem for the GOP is that there is no viable federal alternative to health care to the right of Obamacare that would garner broad public support. That’s because Obamacare is a relatively conservative attempt to achieve something approaching (but certainly far from) universal health care. In 2010, Obama and top Democrats even torpedoed a public option that would have created a federally-funded health care plan that would have kept down premiums by competing with private insurance companies. Democrats even accepted over 150 Republican amendments to the Obamacare legislation because they were seeking bipartisan support, which they obviously never got.
Not without irony, after seven years of accusing Democrats of forcing Obamacare through Congress without adequate review, the GOP decided to do exactly that. As Harold Pollack explains in an excellent piece for Politico, then-majority leader Rep. Nancy Pelosi and then-majority leader Sen. Harry Reid spent more than a year building consensus and holding dozens of committee hearings on Obamacare to actualize a vision dreamt by liberals since the days of the Truman Administration.
Instead of cultivating support from the health care insurance industry or the major health care provider groups, Republicans spent a grand total of 18 days from disastrous roll out to eventual failure begging congressmen to get on board. It probably didn’t help Paul Ryan when the American Medical Association, the American Hospital Association, the American Nurses Association, and the AARP (among many other organizations) joined with conservative groups like FreedomWorks, the Club for Growth, the Heritage Foundation, and the CATO Institute in condemning his plan.
With the moderate flank of the GOP pinned down by liberal grassroots activism, particularly in the Northeast, and right-wing hardliners pressing for an even more terrible plan, Ryan and Trump eventually ran full tilt into a completely artificially created deadline of the 7th anniversary of Obamacare’s enactment. Even Newt Gingrich was compelled to publicly ponder, “Why would you schedule a vote on a bill that is at 17% approval?”
What, indeed, were they thinking?
For Trump, at least, it turns out he wasn’t thinking very much. By all accounts, he had no interest in the policy specifics of the bill. As I wrote in a previous post, it’s hard to care about policy specifics when you don’t have principles to guide you.
Thus, the “ultimate closer” was selling a product about which he knew nothing. Tim Alberta’s superb account of the behind-the-scenes machinations on the replacement effort is telling. In the following excerpt, Alberta describes what happened after Donald Trump told hard-right Freedom Caucus members of Congress to “[f]orget about the little shit”, meaning, you know, what the bill would have done:
Filled with hope once again, Freedom Caucus members were once again promptly disappointed. This meeting was yet another ‘take one for the team’ seminar. The atmosphere was friendly, and the president had the group laughing with irrelevant riffs and stories of negotiations past, but it became clear, as soon as he made the ‘little shit’ comment, that no serious changes were going to be made, because the president didn’t have sufficient command of the policy details to negotiate what would or would not be realistic for Ryan to shepherd through the House.
Making matters worse for Trump was that he was actually selling garbage.
Perhaps Republicans failed in their efforts to do the thing they’ve been promising to do for the better part of a decade because many conservatives don’t think the health care problem can be solved by government at all. Their hearts aren’t in it. So they tried to race towards political hand-washing with the AHCA while slashing entitlement spending to make it easier to achieve tax reform (less government money spent on social programs means the government can afford to tax rich people less).
Even Trump seemed to acknowledge that the plan would have broken his promises on health care and hurt many of his voters when Tucker Carlson raised the point in an interview.
By the end of last week, a desperate White House told the Freedom Caucus that they would eliminate the “essential health benefits” of Obamacare. That would literally allow insurance companies to sell plans that didn’t cover things like visits to the hospital. What a ruse.
Now let’s get to the hard part.
I’m of the mind that progressives should not just criticize as the minority party but also propose alternatives. On this issue, some of these ideas include expanding Medicaid to include more people, creating a Medicare buy-in for older people under the age of 65, and creating a public option.
Another alternative is a Medicare-for-all single-payer system, the likes of which Sen. Bernie Sanders has been advocating. Interestingly, some liberal lawmakers in California are pushing the implementation of a state-wide single payer system. States are the laboratories of democracy, and, if left coast activists are successful in getting the law passed, it will be interesting to see how that experiment unfolds.
Democrats must propagate their own ideas about how to improve the health care system or else they risk getting caught flat-footed like the Republicans did after taking back power. Furthermore, voters want to vote for something. As the tragedy of the Hillary Clinton campaign has taught us, electoral success requires something more than “the other guy is worse”. While Obama was a personality tour de force in 2008, he also ran on ideas like health care reform and environmental policy that turned supporters into volunteers into votes.
While some may not want to admit this, Donald Trump ran on a big idea too. The main import of his message is that we need to change the system entirely so it works for the little guy. There’s no bigger idea in politics than that.
Obviously, however, salesmanship can only go so far when you have no plan to deliver the goods. Democrats need to show the nation that they have ideas on health care. And they need to talk about it loudly, publicly, and often.