clock menu more-arrow no yes mobile

Filed under:

“It won’t work.” Obamacare’s toughest critics are panning the GOP replacement bill.

Does anyone actually like this bill?

Win McNamee/Getty Images

Avik Roy, Phil Klein, and Bob Laszewski are the three Obamacare critics I follow most closely. Each of them represents a different pole of Obamacare skepticism. Roy, the co-founder of the Foundation for Research on Equal Opportunity, is a reformist conservative who admires the universal health care systems of Switzerland and Singapore and has designed his own universal health care plan for America. Klein, a writer at the Washington Examiner, is a more orthodox conservative who is less concerned about coverage but wants to see the health system rebuilt around market-oriented principles. Laszewski is a pragmatic health industry consultant who specializes in insurance market design.

All three have eagerly awaited — and in Roy’s case, worked hard to create and sell — a Republican replacement for Obamacare. None of them like the American Health Care Act, the bill Republicans released Monday night.

The conservative critique: this is Obamacare lite

“In releasing their healthcare plan on Monday, House Republican leaders sent a signal loud and clear: liberalism has already won,” Klein wrote for the Washington Examiner:

The GOP bill preserves much of the regulatory structure of Obamacare; leaves the bias in favor of employer healthcare largely intact, replaces Obamacare's subsidies with a different subsidy scheme, and still supports higher spending for Medicaid relative to what was the case before Obamacare.

Ultimately, it doesn't do much to foster the development of a free market system. Under GOPcare, individuals would not be able to take insurance with them from job to job, because tax credits would not be available to people who have an offer of job-based insurance. They would not be able to purchase whatever plan they want, because the federal government will still be dictating what has to be in insurance policies, making insurance more expensive then it needs to be. If this bill passes, everybody would have to get their insurance either through government, their employer via tax subsidy, or be left to purchase government-designed health policies using federal subsidies.

Klein goes on to argue that Obamacare lite — which this bill is — might be better than Obamacare heavy. On the other hand, “there is an argument that if conservatives know this bill is a turkey and will fail, it's better that they don't embrace it, so that the ‘free market’ doesn't get blamed for the failures of a big government policy.”

I think conservatives are going to be taking that last point seriously in the days to come. This bill doesn‘t achieve many of their goals, and it’s also extremely poorly designed. It will lead to millions losing their health insurance, millions more paying higher out-of-pocket costs, and death spirals in weak markets. Do they really want to own all that for ... this?

The pragmatic critique: it won’t work

The first three words of Laszewski’s analysis are stark. “It won't work,” he writes.

Laszewski is no fan of Obamacare. In his blog post on the Republican bill, he calls the Affordable Care Act “so poorly constructed it is literally an anti-selection machine.” The only problem? “The Republican proposal is worse.” Here’s the core of his critique:

House Republicans are proposing a very attractive program for the better off and, with the Medicaid rollback, gutting the program for the poor to be able to pay for it.

Republicans claim their new tax credits would be enough to buy a catastrophic plan even for the poorest––and in many cases that will likely be true. But, what good will it do a person making $15,000 a year to get a premium credit only large enough to buy a plan with a $3,000 or $5,000 deductible?

The House Republicans are also proposing an individual health insurance market scheme that may even be worse than Obamacare itself.

As bad as the Obamacare individual mandate was for consumers––and as ineffective as it was for insurers––it did cause those not buying health insurance some pain. The Republicans now want to create a scheme that doesn't require anyone to sign up. But when they get sick enough that they need insurance, they will be able to quickly do so by paying a paltry 12-month 30% premium surcharge.

It’s worth reading Laszewski in light of the GOP’s attacks on Obamacare. Remember this quote from Mitch McConnell, for instance?

Well, what you need to understand is that there are 25 million Americans who aren’t covered now. If the idea behind Obamacare was to get everyone covered, that’s one of the many failures. In addition to premiums going up, copayments going up, deductibles going up. And many Americans who actually did get insurance when they did not have it before have really bad insurance that they have to pay for, and the deductibles are so high that it’s really not worth much to them. So it is chaotic. The status quo is simply unacceptable.

As Laszewski’s analysis makes clear, the GOP plan makes every single one of these problems worse. It will lead to more people without insurance. It will lead to premiums going up, copayments going up, deductibles going up. It will lead to destabilized markets where the healthy hang back because there’s no individual mandate — not even a weak one, as we have now — forcing them to buy insurance. Many Americans will be shunted into bad coverage that they can’t afford to use.

The reformist conservative critique: it discredits us

The last line of Avik Roy’s assessment for Forbes is its most brutal. “Expanding subsidies for high earners, and cutting health coverage off from the working poor: it sounds like a left-wing caricature of mustache-twirling, top-hatted Republican fat cats,” he writes.

There are parts of the bill Roy likes — chief among them, the Medicaid reforms. But “those reforms are overshadowed by the bill’s stubborn desire to make health insurance unaffordable for millions of Americans, and trap millions more in poverty.”


“The critical mistake of the AHCA,” Roy argues, “is its insistence on flat, non-means-tested tax credits. The flat credit will price many poor and vulnerable people out of the health insurance market.”

The result is Republicans have proposed a reverse-Robin Hood structure: The poor get much less help than they do now, and the rich get much more. To someone like Roy who believes that conservatives are, or should be, the real champions of America’s poor, this is disastrous. It’s not just a bad idea, it’s a bad idea that discredits all their other ideas; a bad idea that confirms what liberals have always thought about them.

Making matters worse, Republicans have given up on getting any Democratic support for their reforms, which means they need to pass the bill through the narrow channel of budget reconciliation so it can’t be filibustered. But the budget reconciliation process can only absorb purely budgetary proposals. That means most of the insurance regulations Republicans wanted to repeal, or remake, are left out of the bill. Republicans are left selling insurance that must meet most of Obamacare’s standards even as they give low-income Americans much less money with which to buy it.

Who actually likes this bill?

Last night, Jon Cohn, a liberal health wonk, tweeted something apt:

There’s more to the world than wonks, of course. But who exactly is the audience for this bill? House conservatives are already calling it Obamacare 2.0. Republicans have given up on Democratic votes before even trying to secure any. Voters aren’t likely to cheer a bill that takes health insurance away from the poor to offer tax cuts for the rich. Insurers are going to look at this proposal and run in the other direction.

As I wrote last night: The only plausible goal this bill achieves is letting Republicans say they repealed and replaced Obamacare. If that’s the real motivation, then Republicans have mistaken their slogan for the goals their slogan was meant to serve. Republicans wanted to repeal and replace Obamacare because, in theory, they had something better — something people would like more, and that would achieve their goals of cutting costs and creating a real market in health insurance.

But that’s not what they have here. They’ve developed something worse than Obamacare that would prove disastrous to actually implement. That’s why Obamacare’s sharpest critics are reacting with such horror.

Correction: Roy emails to say he admires Switzerland’s healthcare system, not Sweden’s. I regret the error!

Sign up for the newsletter Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.