The GOP’s “three-pronged” health care strategy, explained

White House press secretary Sean Spicer said the word “prong” 16 different times at a briefing this week. He was practicing what has become the most common way for congressional Republicans and the White House to deflect criticism of Paul Ryan’s American Health Care Act — by pitching it as only the first step, or the first “prong,” of their much bigger “three-pronged” health care overhaul.

“It’s a major, complicated piece of legislation that’s got three prongs to it,” Spicer said of ACHA. He later extolled the “comprehensive strategy in three prongs,” the “significant reforms in prongs two and three,” and then added that “the sooner that we can get all those prongs out there, the better.”

There are political reasons to be skeptical any of these “prongs” will ever be implemented, and policy reasons to doubt they’ll come close to achieving what Republicans are promising.

The first prong is to pass the AHCA, which looks increasingly unlikely as the number of GOP defections in Congress continues to mount. The second prong involves Secretary for Health and Human Services Tom Price unilaterally repealing (or refusing to enforce) Obamacare’s regulations through executive fiat. There’s some reason to believe this could work at lowering premiums, but doing so would be highly vulnerable to getting knocked down in the courts and would allow insurers to do far less to help patients.

Then there’s the third prong — which imagines that Senate Democrats and Republicans will link arms and pass big bipartisan health care reform packages. At this point, prong three is almost certainly a legislative pipe dream.

Prong 1: pass the AHCA

Photo by Dan Kitwood/Getty Images

The first “prong” is the most consequential of the three: Pass the AHCA.

As Vox’s Sarah Kliff has written, the AHCA would go some of the way toward ending what Republicans have long loathed about the Affordable Care Act — transforming Obamacare’s tax credits to be based on age rather than income, halting the Medicaid expansion, and reducing government expenditure on health care overhaul by around $1.2 trillion. (You can read her full explainer on the AHCA here.)

The bill came under heavy criticism after the Congressional Budget Office projected it would deprive more than 24 million Americans of their health insurance. The Washington Post published a head count on Wednesday and found more than 50 Republicans in Congress have criticized the bill or vowed to vote against it, suggesting that it is in deep political trouble.

Viewed as a stand-alone effort, it’s hard to imagine why any vulnerable Republican incumbents would stick out their necks for the AHCA. (Vox’s Ezra Klein has a rundown of some of the political liabilities here.)

That’s why the White House is arguing that everyone — including the CBO — should consider how Ryan’s bill fits with what the GOP will do in prongs two and three.

“When you look at the additional phases or prongs of this whole comprehensive approach,” Spicer said in the Tuesday briefing, “that actually changes the equation a lot.”

Prong 2: regulatory and administrative changes

Photo by Chip Somodevilla/Getty Images

Ryan’s bill is being passed through budget reconciliation, which means Republicans in the Senate will only need 51 votes for it to be approved. This approach’s drawback, from the conservative perspective, is that reconciliation can only be used to repeal the parts of Obamacare that directly affect the budget deficit. (To pass bills that don’t affect the budget, they’d have to go through the legislative process that requires 60 votes in the Senate.)

In practice, this means AHCA gets rid of a lot of the new spending that people use to buy health care. But it can’t do much to repeal the Obamacare regulations that force insurance companies to provide adequate coverage, since those restrictions fall outside the purview of “budget reconciliation.”

That’s a bad combination for Ryan. His bill strips patients of the government funding that people use to buy care, but leaves untouched the Obamacare requirements that mandate those plans fulfill a certain number of patient benefits. So under Prong 1 alone (AHCA), people will be given less money to buy coverage that’s just as expensive.

“People are getting less help, but still can only buy the comprehensive benefits the ACA requires,” says Larry Levitt, of the Kaiser Foundation, of AHCA. “That’s what leads to the score we just saw.”

This is where Prong 2 comes in, at least in theory. Republicans have insisted that HHS Secretary Tom Price can take measures that will repeal these Obamacare regulations, which will in turn lower premiums by making health care cheaper. Once premiums are cheaper, more people will buy coverage and you won’t see 24 million people losing insurance as the CBO estimates, a spokesperson for Ryan said in an interview.

It’s worth noting, though, that Spicer and Price haven’t detailed which Obamacare regulations they would do away with. Getting rid of some regulations might actually increase the number of uninsured by shutting them out of the insurance market, said Nadereh Pourat, director of research for the UCLA Center for Health Policy Research.

“What I don't understand is how any of this is going to somehow increase the number of individuals covered,” Pourat said.

Also, Price doesn’t have an unlimited capacity to stop enforcing Obamacare’s regulations. The benefits required under Obamacare still have to be “comparable” to those of an employer-based health care program, Levitt said. So if Price decides to define the required benefits as so weak that they don’t come close to matching a “typical” employer health care package, that could invite a court challenge.

That will make it very difficult for Price to erase the regulations of the ACA that are most responsible for driving up premium costs, said Devon Herrick of the center-right think tank the National Center for Policy Analysis.

“The purpose of those regulations was to make sure the sickest, most costliest people have access to semi-affordable health coverage,” Herrick said. “Price cannot repeal those through fiat or via a mandate.”

Prong 3: bipartisan health care reform

Photo by Justin Sullivan/Getty Images

In addition to the executive actions and AHCA, House Republicans and the White House say they’ll also roll out at least three major pieces of legislation that they say can win over Senate Democrats for the so-called “third prong.” (A “two-pronged plan” doesn’t quite roll of the tongue as well, after all.)

This third prong is largely aimed at solving the same problem as the second — repealing the Obamacare regulations that can’t be touched through budget reconciliation.

Congressional Republican staffers close to leadership pinpointed three main initiatives that are already being “teed up” after Prongs 1 and 2 are completed:

• Allowing insurers to sell across state lines;
• Medical malpractice reform; and
• Associated health plans, or pools for “high risk” patients that separate healthy people from those with serious medical conditions.

Part of this “third prong” approach appears designed to allow Republicans to criticize the Democratic opposition for standing in the way of their preferred health care package, should steps one and two fail to bring about the promised benefits to patients.

Substantively, though, it’s not clear if those bills would address the fundamental objections to AHCA.

Medical malpractice reform may be a worthwhile goal, Herrick said. But he also argues it would do nothing to make sure more people have health care, and would at best slow the growth of premium prices by a couple of percentage points.

Meanwhile, the associated health plans were banned under the ACA and could be brought back through new legislation. They work by separating the unhealthiest people into their own health care pool, so those without serious illnesses don’t have to subsidize the costs for everyone else (and the costs of the sickest can be addressed separately). While they may help lower premiums for the healthy, these “high risk” pools have historically left those with chronic conditions facing massive bills on their own. Democrats are fiercely opposed to the proposal.

Even “selling insurance across state lines” — a concept moderate Democrats like Sen. Heidi Heitkamp have supported in the past — isn’t really responsive to today’s health care system, Herrick said.

That idea was never about targeting the insurance companies themselves. Instead, it was aimed at preventing state health insurance commissioners from ever passing regulations that were too strict on their own state’s insurance companies. Now that Obamacare mandates that every state follow certain regulations across the country, that’s not as serious an issue, Herrick said.

The biggest issue is that Democrats say there’s no chance they’ll offer the eight votes needed to advance those bills.

“[AHCA] digs them so deep in a hole that no regulations are going to get them out of that,” Senate Minority Leader Chuck Schumer said Tuesday night when asked about the three-prong strategy. “And on the changes, they need 60 votes — and, again, until they repeal [AHCA], we think this bill is so bad, there is no way to make it better. Particularly compared to the good job that ACA is doing.”

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