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Why a conservative health care wonk thinks the AHCA is indefensible

"Republicans are making a mistake.” — columnist Philip Klein

Deputy Attorney General Rod Rosenstein Testifies To Committee On Justice Dept.'s Budget Photo by Zach Gibson/Getty Images

Almost no one really knows what’s in the Senate health care bill, but Philip Klein doesn’t like it.

A conservative columnist who favors a pure market-based system, he’s published multiple pieces against it. His latest column for the Washington Examiner argues that Republicans have “already given up on repealing and replacing Obamacare” and are inching toward a cluster of half-measures that will be politically damaging and practically counterproductive.

His primary concern is that Republicans are being disingenuous about what their bill can do, and will pay a steep price when it fails.

These are, of course, very different from liberal concerns about the bill. Most liberals reject market-based solutions for health care and believe we should go the way of nearly every other industrialized nation and embrace a single-payer system.

But I wanted to understand why conservatives might object to the bill that their own party is promoting. So I talked to Klein about what kind of political strategy he would adopt to pass a conservative bill that he might like but most Americans won’t — and why his advice to Republicans is “go big or go home”.


Sean Illing

First, tell me what don’t you like about the AHCA?

Philip Klein

I don't think it gets us any closer to a free market system. The problem is that it's governed by ideological incoherence. Republicans want to claim that they’re guaranteeing coverage or access for everyone and at the same they’re promising to cover everyone’s preexisting conditions. The whole thing is an exercise in bluffing; they want to shield themselves from the left while claiming that they’ve repealed and replaced Obamacare.

So it's really an exercise in getting something done and passed. It won’t satisfy the left and it won’t get us anything resembling a free market for health care.

Sean Illing

So when you claim that Republicans have already given up on fulfilling their promise to repeal and replace, you mean two things: They’re not offering a purely market-based solution and they won’t dispense with the idea that everyone ought to be covered?

Philip Klein

Yeah, I think that's mainly fair. Full repeal would mean that every aspect of Obamacare no longer exists. We're replacing everything. But very few people thought that Republicans were ever going to literally repeal all of Obamacare. So there is a bit of a semantic game about what could you sort of plausibly claim as repeal, and there’s a lot of gray area here. No one would argue about whether it was a full repeal if they managed to repeal 90 percent of Obamacare.

But if you have a bill that is keeping its core regulations mostly intact at the national level, and it's keeping a lot of spending and will likely have to keep a lot of the taxes and will delay the substantial parts of repeal for several years until another Congress is sworn in, I think that it's problematic to call it repeal.

You can say it's a partial repeal, that it repeals elements of Obamacare or that it puts several portions of Obamacare on a pathway to repeal. But I just think that it would be inaccurate to say that what they're doing and what they're talking about at this point is really repeal.

Sean Illing

But Republicans do want to leave some level of tax credit as well as regulations to protect people with preexisting conditions, and this plan will drastically reduce the number of people with health care in this country, so in effect this is a rollback of Obamacare, no?

Philip Klein

Yes, that’s true. My whole issue is that Republicans have made so many nods to Obamacare. Rhetorically, they're talking about how we have to cover people with preexisting conditions and we have to cover everybody. So they've accepted all of the left's metrics for what would be named a successful health care bill. And with all their nods to the left, they still end up with a bill that the CBO says would result in 23 million fewer people with coverage and that that polls at 17 percent.

Sean Illing

What does your ideal conservative health care system look like?

Philip Klein

I’d want to see a health care system that is able to take advantage of the benefits of a free market in terms of using the mechanisms of choice, competition, and price signals to bring down costs and improve care. In most every other area of technology, over time, prices go down and quality improves.

Granted, it’s true, there is a certain inelastic nature to demand in health care, an element that makes it harder for consumers to evaluate choices and make decisions. Nobody would argue that a man on his way to the hospital who is having a heart attack is in a position to haggle with paramedics tending to him in the ambulance about the costs of his treatment.

But it’s also true that emergencies only make up a small percentage of our overall health care spending, and that much of our spending involves more routine and less time sensitive situations, and I think that’s an area in which free market mechanisms can make a real difference.

Liberals and conservatives both agree that much of the nation’s health care spending comes from treating conditions that are either caused by or exacerbated by behavioral decisions such as smoking, eating poorly, and not exercising. Market incentives could be used to encourage people to lead healthier lives in the areas that they actually have control over, (just as with car insurance, there are discounts for people who demonstrate a safe driving record).

Sean Illing

There’s a lot to disagree with there, but I want to circle back to the health care bill that’s actually on the table now. What is the political strategy for selling a bill like this that some conservatives will describe as good health care but which most Americans will not?

Philip Klein

Well, my argument is basically that there isn’t a good one. All of the charges that you could level against a pure free market alternative are already being leveled effectively against this, and it’s not actually a free market solution.

Republicans are making a mistake. They haven't gained any of the offsetting, advantageous arguments that a truly free market plan would deliver them in terms of really bringing you down premiums, giving a lot more choices and arguments they can be making about innovation and transparency and all sort of things that you could argue if you had a free market plan. So they're eliminating all of those arguments. And yet they're still being attacked for them.

Bottom line: I think that they're going to have a very difficult sell.

Sean Illing

Well that raises the question: What the hell are they doing? Why are they plowing ahead with an incredibly unpopular bill that’s being written in the dark and won’t deliver on most of the promises they’re making?

Philip Klein

Look, we just came through an election in which the Republican nominee who eventually became president was widely panned by the conservative commentariat and the entire expert class. So they might be thinking, “We can sell this to conservatives even if the pundits and the conservative wonks hate it.” They might believe that they can say repeal and replace without actually repealing or replacing, or without actually improving the system.

Perhaps they think President Donald Trump will just go on stage and say, “We did it. We repealed and replaced Obamacare just like we said we would,” and that that will be enough.

Sean Illing

You might be right, but that’s awfully cynical. And eventually people will notice that it’s bad policy, right? When premiums don’t fall, when millions of people lose their coverage, the rhetoric will fall flat, right?

Philip Klein

It’s worth pointing out that it’s not as though 23 million people will suddenly lose their insurance if this bill passes than otherwise would if Obamacare stayed on the books for the next decade. We haven't seen enough analysis to say definitively how many people will lose their insurance in 2018 if this bill is signed into law. The CBO doesn't tell us that. We don’t know how many people will quickly lose their coverage or how many people will voluntarily withdraw from the market after they were forced via the Obamacare mandate to purchase insurance.

So it's not as simple as 23 million people suddenly being kicked off of coverage. My understanding is that they’re going to try to throw money at the market to try to stabilize it as much as possible, and I wouldn’t be surprised to see the Senate bill pump even more money into the market during the transition years to ease the effects.

Sean Illing

Still, they’re setting themselves up for a political disaster here, no? Health care will be worse, not better, after this, and they’ll have to own that.

Philip Klein

I think the Republicans are making a big mistake because their promises are just through the roof. I mean, President Trump promised at various times that he was going to cover everybody. It's going to be more comprehensive insurance, that the deductibles will be lower, that there's going to be less spending and lower taxes, and not all of these things can be possible simultaneously.

So whatever happens, it’s not going to live up to the promises made by Trump, and Democrats are going to run ads for years calling out Trump’s hypocrisy. You’re going to hear his famous line, “Everybody’s going to be covered and it’s going to be amazing” over and over and over again.

Sean Illing

Vox’s Ezra Klein argued last week that Republicans could paradoxically be paving the way to a single-payer health care system if they pass this bill. If they do pass it and if it is as bad most people think it will be, do you think that’s a real possibility?

Philip Klein

I think that’s a real danger, particularly if the way in which they’re passing it comes into play. The complaint that free-marketers like myself always make is that Republicans don’t actually produce free market solutions but they pass terrible bills and then the failures get blamed on the free market. When that happens, the response is: We need to expand government more to fix everything.

When this fails, Democrats are going to point and say, “See, this is what the free market got us. This is why we need a single-payer system.”

Sean Illing

Do you think they’ll pay a price for the process here? For passing such a monumental bill in secret, without public hearings or a debate about the substance?

Philip Klein

I do think that it's problematic and it's already kind of blowing up in their face. When you're in power and you're trying to put out a bill, it's understandable that at some point you want a certain amount of back and forth to happen behind closed doors because of the fact that if everything were in public then people might be afraid of floating a given idea. So there are defensible reasons why some of the bargaining and brainstorming has to happen behind the scenes. Not everything can or should be negotiated in the media.

But this is bad politics and they won’t be able to avoid the charges of hypocrisy. The reason why Republicans were able to take over the House in 2010, and the reason why they were able to win something like the 2010 special election in Massachusetts, a state that Obama won by 26 points a year earlier, is that they had a non-ideological way of arguing that Democrats were cutting all these behind-closed-door deals like the Cornhusker Kickback, that they were rushing this bill out. They were rewriting one-sixth of the economy by ramming through this piece of legislation, and those were very strong attacks.

And now Republicans are conducting this process much more clandestinely than Democrats did with Obamacare, after they spent years decrying that process.

Sean Illing

What you’re describing is a perfect storm of bad strategy. This bill is politically disastrous, ideologically incoherent, and the ultimate consequence might be to bring about an outcome that is completely at odds with what Republicans claim to want: a single-payer system.

Philip Klein

But the problem for Republicans is, what’s the alternative? If they don’t repeal and replace Obamacare, it will be the biggest broken promise in political history. And it won’t be a broken promise from an individual politician but a broken promise from an entire political party — that too would be a disaster for the Republicans. I mean, repealing and replacing Obamacare has been the central promise of virtually every Republican running for office since 2010. So they’ve backed themselves into a corner here.

Sean Illing

Last question: If you smuggled your way into that chamber with Senate Republicans, what would you say? What would you tell them to do?

Philip Klein

Go big or go home. Either you have a plan that's defensible, that's coherent both ideologically and in policy terms, or you don’t. And if you don’t, don’t bother. That would be my advice.