Donald Trump added his own signature dose of shamelessness to the Republicans’ shameless crusade against Obamacare.
“We’re going to have insurance for everybody,” Trump told the Washington Post after the election. Under Trumpcare, according to Trump, people “can expect to have great health care. It will be in much simplified form. Much less expensive and much better.”
This was bolder and brasher than what more establishment-minded Republicans had said over the years. But it was, fundamentally, similar to promises and insinuations made by Paul Ryan, Mitch McConnell, and dozens of other Republicans. It’s not just that the Affordable Care Act was killing jobs and sentencing people to death panels. It’s that Republicans had some much better plan in their back pocket that would give Americans what they want — cheap, comprehensive health insurance that offers them oodles of choice.
It was a great line, and it helped Republicans win Congress and eventually the White House. But it was a lie, and now Trump and Republicans in Congress are paying for it.
Policy-minded conservatives have serious criticisms of President Obama’s health care law. They think it taxes rich people too much, and coddles Americans with excessively generous, excessively subsidized health insurance plans. They want a world of lower taxes on millionaires while millions of Americans put “skin in the game” in the form of higher deductibles and copayments. Exactly the opposite, in other words, of what Republican politicians have been promising.
And this, more than tensions between the conservative and moderate flanks of the caucus, is why the prospect of actually legislating brought the GOP to a crisis point. The chasm between what they’ve been saying they want to do and what their policy ideas actually do was simply much too large to be bridged.
Conservatives think the ACA’s redistribution is immoral
Republican leaders and conservative intellectuals, for the most part, didn’t really believe nonsense about death panels or that Obama was personally responsible for high-deductible insurance plans. What they fundamentally did not like is that the basic framework of the law is to redistribute money by taxing high-income families and giving insurance subsidies to needy ones. The details matter enormously to everyday people, but the broad principle is enough to make conservatives reject it.
And, indeed, as this chart from Gary Burtless and Henry Aaron of the Brookings Institution shows, the Affordable Care Act enacts substantial income redistribution in the United States.
Indeed, Greg Mankiw, a Harvard economist who served as chair of President George W. Bush’s Council of Economic Advisers, believes the ACA “was motivated as much by the desire to redistribute income as it was to reform the health care system.”
Not coincidentally, Mankiw, like many conservatives, believes this kind of income redistribution is profoundly immoral. He writes that we should begin our analysis of tax policy “by asking whether people’s compensation reflects the contributions they make to society and how much they benefit from government actions.”
Consequently, a program that redistributes income toward the bottom 20 percent of the population — filled as it is with people who don’t have in-demand skills or who work relatively few hours per year — fundamentally violates Mankiw’s sense of what he calls a “just deserts” approach to social policy.
Republican Party politicians broadly agree with this theme of Mankiw’s. On the campaign trail in 2012, Ryan liked to say, “Mitt Romney and I are not running to redistribute the wealth, Mitt Romney and I are running to help Americans create wealth.”
Conservatives think ACA taxes and spending hurt growth
Conservatives also have, of course, pragmatic arguments about redistribution. A typical conservative view is that, as James Pethokoukis of the American Enterprise Institute writes, “raising taxes on capital gains and dividends is a truly horrible idea.”
Why? Well, because low taxes on investment income leads to, they claim, growth.
The Affordable Care Act raises hundreds of billions of dollars from a new tax on the investment income of high-income households. Conservatives believe — and they have traditional economic models on their side for this one, though a fair amount of new research disagrees — that though this kind of tax may be savvy short-term politics, it’s ruinous to the long-term growth potential of the economy.
In a very accessible column, Jared Meyer of Economics21 lays out two ways the spending side of the Affordable Care Act hurts growth. One is that by giving low-income families generous subsidies that phase out as their incomes rise, it reduces their incentive to work more hours or find higher-paying jobs. The other is that the ACA makes it easier for workers in their late 50s or early 60s to retire early, by ensuring they don’t need to maintain a full-time job to maintain their health insurance.
“Supporters of the law touted this decrease as beneficial,” he writes, since, after all, retiring early sounds nice but is “terrible news for the economy,” which will miss the workers.
The Republican argument about health care looked totally different
When the Congressional Budget Office came out with the report that provided the basis for Meyer’s assertion about early retirement, practical Republican Party politicians were overjoyed.
“Just yesterday,” said Florida Sen. Marco Rubio, “the Congressional Budget Office found that Obamacare will cost millions of Americans their jobs.”
Georgia Rep. Phil Gingrey said the law creates “unprecedented uncertainty for job creators that, according to the nonpartisan Congressional Budget Office, will leave millions of people looking for work in the next few years.”
Minnesota Rep. John Kline was even blunter: “The president's health care law is destroying full-time jobs.”
This is not what the CBO said, as fact-check columns from the Washington Post, PolitiFact, and elsewhere pointed out. But that didn’t stop incumbent Republicans from saying it. Nor did it stop Republican challengers like North Carolina’s Thom Tillis from saying it in their ads. Running against Kay Hagan in 2014, Tillis charged that the health care law Hagan had voted for would cause 2 million Americans to “lose their jobs,” according to the CBO.
That wasn’t true, fact-checkers said it wasn’t true, but it was a good ad anyway, and Tillis narrowly defeated Hagan.
Republicans promised people better health insurance
The striking thing about Republican use of the CBO report on the Affordable Care Act’s labor supply impact is that Republicans weren’t exaggerating. They weren’t just making things up, either.
They were taking a completely genuine conservative policy critique of the law — that it was making things a little too cushy for people, so they might decide to quit working — and turned it into roughly the opposite argument, that the Obamacare jackboot was going to prevent people who wanted jobs from finding work. The habit of doing this repeatedly — not just saying things that aren’t true, but refusing to state Republicans’ actual objections to the law — is what has painted the Republican Party into a corner.
“If the idea behind Obamacare was to get everyone covered,” said Senate Majority Leader Mitch McConnell on the January 8 episode of Face the Nation, “that’s one of the many failures. In addition to premiums going up, copayments going up, deductibles going up.”
In other words, the Affordable Care Act had two big problems: Not enough people were covered by exchange plans, and the coverage they had was too skimpy.
“Many Americans who actually did get insurance when they did not have it before have really bad insurance,” McConnell continued, sounding like one of ACA’s left-wing critics, “and the deductibles are so high that it’s really not worth much to them.”
McConnell is too much of a savvy old Washington hand to have actually gone on to explicitly promise a Republican bill that would cover more people with lower deductibles and copayments. His game was simply to quietly, albeit falsely, imply that this is what the GOP was cooking up. Trump, by contrast, isn’t big on subtext and simply ran around the country promising to replace ACA plans with “something terrific.”
Republicans want people to have worse health insurance
One could, of course, actually deliver on these promises. It would be relatively simple for the federal government to give everyone lower deductibles and copayments by agreeing to pony up more money for subsidies. Other left-wing ideas include introducing price controls for prescription drugs, adding a “public option” whose payment rates would be linked to Medicare, letting older patients buy in to Medicare, or the wonk set’s favorite answer, “all-payer rate setting.”
But none of these ideas would address the Republican Party’s actual problems with the Affordable Care Act.
For starters, if you think the ACA’s taxes are both immoral and disastrous for long-term economic growth, then you need to repeal them. That leaves you with less money to go around to offer coverage. Couple that with the concern that generous subsidies for the poor create a disincentive to work, and you are pretty much locked into the idea that you need to make people’s insurance coverage worse.
The GOP has long had a variety of replacement plans floating around, which differ from one another in important ways. But they all cut taxes and reduce spending. They all end up covering fewer people, and they all end up delivering skimpier coverage to most of the people they do cover. In most cases, they do manage to jigger the costs and benefits around so that there is at least a subset of the population — young, healthy, non-poor people — who end up better off.
But that’s just another way of saying that the Republican plans end up giving people lower-quality insurance coverage. Young, healthy, middle-class people don’t particularly need high-quality insurance coverage, so they can benefit from a scheme that doesn’t give it to people. And one certainly could imagine Republicans trying to build a politics around the idea that having the rich subsidize the poor and the healthy subsidize the sick is a bad idea. But not only have they spent the past seven years failing to do so, they’ve actually done the opposite — running for office with the promise of better coverage while the boys in the back room cook up plans that offer worse coverage.
The jig is up
In the months since Election Day, it became increasingly apparent that a reasonably large number of Republican Party legislators either didn’t understand that the campaign against Obamacare was based on lies or else had never really considered the implications of that reality.
Either way, the problem with passing a law that is going to make people’s health coverage worse while promising that it will get better was pretty obvious: People would notice when they llostose insurance or when their deductible skyrockets.
They would also hear stories from friends, relatives, and co-workers.
Doctors, hospitals, and other health care providers would also notice that their patients don’t have the money to afford coverage. You can win an election based on a lie. You can even pass a bill based on a lie if you want. But you can’t expect that you’re going to get away with it.
Which is why, over time, GOP replacement plans kept evolving to look more and more like the status quo. The less the replacement actually changes things, the less obvious it would be that Republicans have broken their promises to deliver better coverage for the American people. But even the final version of repeal still had analysts anticipating that millions of people will lose coverage, while the value of the coverage for those who remain is reduced. That leaves the GOP caught between ideological stalwarts who are alarmed by how much of the Obamacare framework the plan leaves in place and nervous pragmatists who are worried about how much suffering it inflicts.
Conflicts between purists and pragmatists are nothing new in the legislative space. But the profound dishonesty underlying the repeal campaign was something special. It’s wasn’t a question of half a loaf versus holding out for the whole thing. It was a question of whether Republicans should try to deliver on their ideas or try to deliver on their promises, in a world where their ideas are antithetical to what they’ve promised. And there was no way out.