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The GOP health bill doesn’t know what problem it’s trying to solve

After seven years of drafting a replacement plan, we get … this?

Have you read Sarah Kliff’s thorough look at the GOP Obamacare replacement? You have? Good. Some thoughts.

  1. Little in politics shocks me. The process House Republicans want to use for their health care bill does. After literally years of complaining Obamacare was jammed down the American people’s throats with insufficient information or consideration, the GOP intends to hold committee votes on their bill two days after releasing it, and without a Congressional Budget Office report estimating either coverage or fiscal effects. It’s breathtaking.
  2. If Republicans believed the American people — or even their own legislators — would like the results of a thorough estimate of their proposal’s effects, they would have waited for one. We’ll get a CBO report anyway, of course. My guess is it will say this: The GOP plan will lead to significant declines in coverage (Loren Adler estimates an eye-popping 15 to 20 million people will lose insurance) as well as accelerating the exhaustion of the Medicare trust fund due to the tax cuts. After years of Republicans complaining that co-pays and deductibles were too high in Obamacare, co-pays and deductibles will be significantly higher under their replacement. The plan will significantly reduce taxes on the rich.
  3. I honestly have no idea what it will do to the deficit — it’s hard to see any short-term reduction, and if there’s a long-term reduction, it will only be due to deep, deep Medicaid cuts, which will mean a correspondingly large increase in the uninsured. It’s worth noting that the GOP’s main idea for reducing health care costs — ending or capping the tax break for employer-provided insurance — has been left out of this legislation. There is simply no theory of cost control in this bill at all.
  4. Adverse selection seems like a huge problem in this plan. The individual mandate is gone, healthy people can buy coverage at any time with only a 30 percent penalty, and eliminating actuarial values makes it simpler for insurers to pull the young and healthy away from older and sick. Death spirals seem very likely in weak markets. Republicans will fully own those death spirals.
  5. The plan is strikingly regressive compared to the Affordable Care Act. Cynthia Cox estimates that a 40-year-old making 160 percent of the poverty line would get $4,143 in subsidies under the ACA, but only $3,000 under the GOP plan. By contrast, a 40-year-old making $75,000 would get nothing under the ACA, but $3,000 under the GOP plan.
  6. Hypocrisy is a minor sin in politics, but still, it is remarkable how much of it there is to be found in this legislation. A core Republican complaint when Obamacare was passed was that the law delayed many of its provisions in order to reduce public outcry and manipulate the CBO’s score. The GOP bill is similarly aggressive with such tricks, delaying changes to the Medicaid expansion until 2020 and pushing Obamacare’s tax on expensive insurance plans out until 2025.
  7. “In general,” writes Peter Suderman, “it's not clear what problems this particular bill would actually solve.” This is a profound point. It is difficult to say what question, or set of questions, would lead to this bill as an answer. Were voters clamoring for a bill that cut taxes on the rich, raised premiums on the old, and cut subsidies for the poor? Will Americans be happy when 15 million people lose their health insurance and many of those remaining face higher deductibles?
  8. Nor are movement conservatives pleased with this plan, which leaves the basic architecture of Obamacare intact, and doesn’t begin to phase out the Medicaid expansion until 2020 (raising the question of whether it will ever phase out at all). "It's subsidies for unaffordable health care, subsidies for unaffordable premiums,” said Rep. Jim Jordan of the House Freedom Caucus. Rep. Jordan Amash called it "Obamacare 2.0."
  9. To give Amash some credit, this is much more Obamacare 2.0 than I expected from the GOP. The structure and generosity of the subsidies change, but Medicaid is left alone until 2020, and the odds it changes after that are open to debate. On the regulatory side, many of Obamacare’s key protections, from essential benefits to lifetime limits to protections for preexisting conditions, remain in place. On the tax side, the Cadillac tax, to my surprise, survives, in theory at least.
  10. All this speaks to the Republican Party’s fundamental difficulty on health care, which Suderman captures well: “The GOP's real problem, in terms of passing legislation, isn't that the party can't agree on specifics, or that legislators need to bargain their way toward a compromise that gives everyone something they want. It's that they don't agree on, or in some cases even have, basic goals when it comes to health policy.”
  11. Because Republicans aren’t even trying to win Democratic votes, they’re stuck designing a bill that can wiggle through the budget reconciliation process (another thing they complained about Democrats doing). That means they can’t make major changes to insurance markets like repealing Obamacare’s essential benefit standards or allowing insurance to be sold across state lines. That last part is particularly striking, given that it was one of President Trump’s five demands in his speech last week. I’ve always been skeptical about the savings Republicans could wrest by changing those regulations, but now they can’t get those savings at all — which means sacrificing a key part of their theory of cost control.
  12. This bill has a lot of problems, and more will come clear as experts study its language, the Congressional Budget Office release its estimates, and industry players make themselves heard. But the biggest problem this bill has is that it’s not clear why it exists. What does it make better? What is it even trying to achieve? Democrats wanted to cover more people and reduce long-term costs, and they had an argument for how their bill did both. As far as I can tell, Republicans have neither. At best, you can say this bill makes every obvious health care metric a bit worse, but at least it cuts taxes on rich people? Is that really a winning argument in American politics?
  13. In reality, what I think we’re seeing here is Republicans trying desperately to come up with something that would allow them to repeal and replace Obamacare. This is a compromise of a compromise of a compromise aimed at fulfilling that promise. But “repeal and replace” is a political slogan, not a policy goal. This is a lot of political pain to endure for a bill that won’t improve many peoples’ lives, but will badly hurt millions.