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Doing the math on Republicans’ health care options

The GOP is stuck between a rock and a hard place of its own making.

Senate GOP Health Care Bill Loses More Support  With Republican Ranks
Sen. Lindsey Graham (R-SC), catching the last train
Photo by Mark Wilson/Getty Images

Every GOP senator wants something other than the Affordable Care Act (a.k.a. “Obamacare”), but, at least for now, not enough of them agree on what should supplant it. The political science of this situation is classic: The simple reality is that — in spite of the ACA’s unpopularity — the GOP can’t find anything to beat it.

We have many options on the table, but let’s consider only four (here’s a nice description of the basics). First, there is the status quo (do nothing, leave the ACA in place). Second, weaken the ACA by allowing insurers to deny coverage to those with existing conditions and/or offer less comprehensive coverage. Third, weaken the ACA as in the third option and roll back Medicaid coverage over the next decade by supplanting the current entitlement formula with a capped block grant approach. (If this seems confusing, don’t worry: The idea is simply to cap the total expenditures and “grant more power to states,” which is disingenuous, because states essentially already have total discretion with respect to Medicaid.)

And fourth, and most recently, repeal the ACA with a transition period of two years, after which we either go back to something like the 2009 system or replace it in the next two years. (Yeah, like that’s going to go better than the current perverted puppet show.)

Okay, let’s set the first (leaving the ACA in place) to the side for a moment and consider the other three.

The second option. The second option is not appealing to the right wing of the GOP caucus, because it doesn’t go far enough to repeal the ACA. (For example, the Senate version of the bill would not allow insurers to charge sick people more, i.e., it would retain a “community rating” requirement.) Because of the lack of support from the right wing of the GOP, this proposal can’t beat option 1 (“leave the ACA in place”).

The third option. The third option essentially takes the second option and ratchets back Medicaid, in an obvious ploy to capture the support of those on the right wing of the GOP such as Sen. Rand Paul (R-KY). The quid pro quo here is: “We can’t rip the (electorally and Trumpically) desirable mandated features of the ACA to shreds, so how about we ‘shrink government’ by fundamentally altering (with no discussion or cogitation) a 50-year-old government program that resides at the heart of the health care system?”

This option loses GOP senators from many states — including Sens. Susan Collins (R-ME) and Bill Cassidy (R-LA) — because it drastically cuts a substantial benefit for many of their constituents. (It didn’t help that Senate Majority Leader Mitch McConnell apparently stated that the whole Medicaid stratagem is a lie.) So, once again, this proposal falls short of 50 votes.

The fourth option: repeal and pray for rain. The final option, “straight repeal” (which is much less straightforward under reconciliation than one might have imagined from the language used) was an obvious Hail Mary from McConnell, who knew he lacked the votes (and was probably just sticking it to President Trump). For example, consider Collins’s comment on Tuesday: "I voted against this approach in 2015, and I do not think that it is going to be constructive to repeal a law that at this point that is so interwoven within our health-care system and then hope that over the next two years we will come up with some kind of replacement."

So option 4 is also now — like options 2 and 3, described above — dead in the water. What’s the price, what’s the strategy?

Come up with something real. The reality is that Obamacare is the Senate majority–preferred health care policy for now. A majority of citizens prefer it to any policy change that is on the table. The GOP is now stuck between a rock and a hard place of its own making. One could “fix” the ACA with additional taxes and/or a more single-payer system, but the reality is that the proposals for replacement all lean on moving further away from a single-payer system (mostly by cutting Medicaid) in order to pay for “reforms” of the system. These payments are required (in terms of budget balance under reconciliation) because they are aimed at reducing either (or both) the tax “burden” of the ACA on the wealthy or the “burden” or adverse selection on insurers.

The simple math is that one can reduce the cost of ACA in either or both of two ways:

  1. Relax the requirement that insurers cover preexisting conditions/impose no lifetime cap (for which ACA essentially insures them against the cost of doing so)
  2. Stop paying for expanded government coverage for the less well off (i.e., Medicaid)

Neither of these are winners (and the GOP should stop politicizing the Congressional Budget Office: It does hard work under short timelines, and its numbers tend to help both parties in equal proportions).

While “getting government under control” sells seats, the reality is that all Americans want health care and most need some insurance to guarantee that health care will be available when they need it (typically when they are old and/or ill).

But what about tax reform? A significant proportion of the opposition to the ACA is based on finances — the ACA imposes both direct and indirect costs on the nation in pursuit of (quite possibly profitable) improvements in health care in the US. But a dollar in the hand is worth way more than two in the bush, so it’s simple silly to suggest that the debate about ACA repeal and replacement is independent of taxes. That said...

In the end, this isn’t a fracture between the moderates and the Tea Party within the GOP — it’s a simple reality: People want to have their cake and eat it too. The job of our representatives in this case is unenviable: They have to choose for us.

In the end, I bet they will choose the cake (health care) rather than eating it (taxes). I could be wrong, but human interest stories of old and sick people without care resonate more than those of well-off citizens who, because of their tax “burden,” have to hope for an upgrade on their semiannual trip to St. Maarten rather than just buying the first-class tickets to begin with.

Majority Leader McConnell has his work cut out for him. First step: reconstitute the majority.