THE HEALTH-CARE DEBACLE WAS A FAILURE OF CONSERVATISM
Let the recriminations begin! Actually, the health-care-failure finger-pointing got under way well before Friday, when Donald Trump and Paul Ryan cancelled a House vote on the American Health Care Act. A day earlier, aides to the President let it be known that he had come to regret going along with Ryan’s idea of making health care his first legislative priority.
In the coming days and weeks, there will be more of this blame shifting, and, in truth, there is plenty of blame to go around. Ryan failed to unify the House Republican caucus. Trump’s staff allowed him to endorse a bill that made a mockery of his campaign pledge to provide health insurance for everybody. And Trump himself blundered into a political fiasco, apparently believing he could win over recalcitrant Republican members of Congress simply by popping over to Capitol Hill.
But this is just politics. The larger lesson here is that conservatism failed and social democracy won. After seven years of fulminating against the Affordable Care Act and promising to replace it with a more free-market-oriented alternative, the House Republicans—who are in the vanguard of the modern conservative movement—failed to come up with a workable and politically viable proposal. Obamacare survived, and that shouldn’t be so surprising. When it comes to health-care policy, there is no workable or politically viable conservative alternative.
Of course, that isn’t how conservative lawmakers, pundits, and policy wonks will spin this. They will argue that Trump and Ryan betrayed free-market principles: if only they had proposed the outright repeal of Obamacare, and put forward a bill that genuinely liberated the health-care industry from federal intervention, everything would have worked out well. That will be the story—and it is a fairy tale.
The fact is that the health-care industry, which makes up about a sixth of the American economy, isn’t like the market for apples or iPhones. For a number of reasons (which economists understand pretty well), it is riven with problems. Serious illnesses can be enormously costly to treat; people don’t know when they will get ill; the buyers of health insurance know more about their health than the sellers; and insurers have a strong incentive to avoid providing their product to the sick people who need it the most.
Since the days of Otto von Bismarck, most developed countries have dealt with these problems by setting up a system in which the state provides medical insurance directly, or else mandates and subsidizes the purchase of private insurance, setting strict rules for what sorts of policies can be sold. Obamacare amounts to a hybrid model. It supplements employer-provided insurance, the traditional American way of obtaining health care, with a heavily regulated (and subsidized) individual insurance market and an expanded Medicaid system.
It is far from perfect. But, in combining mandates with subsidies, regulation, and access to a state-administered system for the poverty-stricken and low-paid, it is intellectually coherent. (Many of the problems it has encountered arose because the mandate to purchase insurance hasn’t been effectively enforced, and not enough young and healthy individuals have signed up.) Since it leaves in place the basic structure of private insurance and private provision, Obamacare is also conservative. As is well known, parts of it resemble a proposal that the Heritage Foundation put forward in 1992.
Today’s conservatives act as if they can simply wish away some of the problems that Obamacare was created to deal with. The original version of the American Health Care Act left in place many of the A.C.A.’s regulations but cut back the subsidies and gutted its Medicaid expansion. Had it been enacted, it would have led to higher premiums, at least in the short term, and a huge drop in coverage—twenty-four million people over ten years, according to the Congressional Budget Office. As these implications of the G.O.P. proposal became known to the public, the plan’s approval rating fell and fell. In the end, according to a Quinnipiac poll, only nineteen per cent of Americans supported it.
The Freedom Caucus, a group of right-wing conservatives in the House, wanted a bill that stripped away more regulations, which they claimed would enable insurers to offer cheaper and more flexible plans. On the eve of the vote, Ryan agreed to change a clause defining the “essential health benefits” that insurers are required to provide if they sell policies on the Obamacare exchanges—benefits including maternity and mental-health services. But this change would have created two insurmountable problems.
Once insurers were able to craft individual policies without adhering to any list of required benefits, buyers would self-select. Young, healthy people would choose cheap, crappy policies, and older, sicker people would choose more comprehensive policies. Insurers, knowing this, would raise the prices of the good policies. “Worthless policies would get really cheap, but comprehensive policies would get astronomically expensive,” Mother Jones’s Kevin Drum pointed out. “Virtually no one would be able to afford them.The other problem was political. Americans need maternity coverage, mental-health benefits, prescription drugs, pediatric services, lab tests, and the other things included on the list of essential health benefits. When moderate Republicans in places like New York, New Jersey, and Pennsylvania heard that these services might be eliminated under the amended legislation, they abandoned it in significant numbers. It was their desertion that ultimately killed the bill.
O.K., you might say: The American Health Care Act was a disaster, but what about all the other Republican health-care proposals that are out there? Maybe one of them provides a workable alternative to Obamacare. Let’s briefly look at a few of them.
When he was in Congress, Tom Price, the Secretary of Health and Human Services, who supported the A.H.C.A., put forward a bill of his own. But it was basically a less generous version of the bill that just died: in gutting Medicaid and strictly limiting federal funding for high-risk pools to insure sick people, it would surely lead to a big rise in the number of uninsured. Something similar applies to a bill put forward by Senator Orrin Hatch, who chairs the Senate Finance Committee.
There are a few other plans kicking around conservative think tanks, some of which, like Obamacare, tie the level of subsidies to income. But all of these plans have other serious problems. In eschewing purchasing mandates, they run into the issue of younger people being unlikely to sign up for coverage. In giving insurers more freedom to offer different plans and different pricing structures, they encourage self-selection and undermine the risk-pooling that is at the heart of successful insurance schemes. And in cutting federal support for Medicaid, they dismantle the element of Obamacare that has been the most successful at insuring more people at a reasonable cost.
Another Republican plan that may now attract some attention is the proposal put forward by Senators Bill Cassidy, of Louisiana, and Susan Collins, of Maine. But, far from dismantling Obamacare, the Cassidy-Collins plan would allow big, populous states like New York and California to keep the current system in place, including the Medicaid expansion and the surtaxes on high earners. Red states that don’t like Obamacare would be able to take federal money and design their own systems to provide basic, catastrophic coverage plans to everybody.
Because it retains so much of Obamacare, this proposal seems unlikely to receive majority support inside the G.O.P. In the coming weeks, Republicans in the Senate and the House will be trying anew to come up with an alternative that they can unite around, portray as a big break from the A.C.A., and sell to the American public. The lesson of the past few weeks is that they are likely to fail. As a novice to the subject noted recently, health care is complicated. Too complicated for ad-hoc policymaking and simplistic conservative nostrums.
The Republicans Fold on Health Care
The House abandoned its legislation to repeal and replace the Affordable Care Act, handing President Trump and Speaker Paul Ryan a major defeat.
Updated on March 24 at 6:28 p.m. ET
To a man and woman, nearly every one of the 237 Republicans elected to the House last November made the same promise to voters: Give us control of Congress and the White House, and we will repeal and replace the Affordable Care Act.
Trump had initially insisted that Republicans hold a vote on the bill regardless of the outcome, wanting to see which members would defy him. He dispatched his top lieutenants to Capitol Hill on Wednesday night to urge rank-and-file lawmakers to fall in line, ending negotiations with the party’s right and left flank on further changes to the bill. But few members were persuaded, and by Friday, party leaders in the House wanted to spare their members from having to cast a vote in favor of an unpopular bill that would not become law. At a hastily arranged meeting in the Capitol basement, Ryan told Republicans he had called off the vote and said Trump was on board with the decision. Minutes later, stone-faced lawmakers left the meeting and prepared to head back to their districts for the weekend. One Republican staffer was in tears as she exited the room.
While conservative members of the Freedom Caucus withheld their support despite winning a last-minute amendment to broaden the repeal, it was the defection of more moderate and electorally vulnerable members that sealed its fate. Republicans could afford to lose no more than 22 votes to achieve a majority, and in a statement at the White House Friday, Trump estimated that they were 10 to 15 votes short. In perhaps the most ominous sign for the GOP leadership, the chairman of the powerful Appropriations Committee, Representative Rodney Frelinghuysen of New Jersey, announced he would oppose the bill on Thursday morning. In previous generations, it would be unheard of for a top committee chairman to oppose party leaders on such a major vote. Representatives Barbara Comstock of Virginia and David Joyce of Ohio followed suit about an hour later, sapping momentum from the effort less than a day after Trump delivered his ultimatum to Republicans to pass his bill or see Obamacare live on.
The White House and GOP leaders searched for votes wherever they could, but there were few lawmakers willing to suddenly support a bill they had already publicly denounced. Representative Walter Jones of North Carolina, a frequent dissenter in the party, said he waved off a last-minute call from the office of Representative Steve Scalise of Louisiana, the party whip. “I said, ‘Let me tell you: I don’t want to waste his time,’” Jones told reporters. “I don’t see anybody that was a no yesterday changing their vote.” He then ripped into the proposal and the leadership’s insistence that it pass. “This was absolutely a bad decision to move this type of bill this early,” Jones said.
Defeat on the floor dealt Trump a major blow early in his presidency, but its implications were far more serious for the Republican Party as a whole. Handed unified control of the federal government for only the third time since World War II, the modern GOP was unable to overcome its internecine fights to enact a key part of its policy agenda. The president now wants to move on to a comprehensive overhaul of the tax code, but insiders on Capitol Hill have long believed that project will be an even heavier lift than health care.
Well, we have won this battle. Twenty four million will keep their health insurance. This is a huge win for these families and the future of America.
We must remember, however, that we have not run the war. The Republicans still plan to pass a tax plan that will increase the burden of the middle class and decrease the taxes on the 1%. Trump still plans to build at Wall – at tax payers’ expense – that will do nothing to make the country safer, but will undoubtedly make us foolish in the eyes of our allies and enemies. The Republicans still plan to gut the EPA and the National Endowment of the Arts and Meals on Wheels.
We must still Resist.
But, just for today, we can celebrate.
It was the Republicans who objected to affordable health care and now they don’ want to change it. Just shows how sincere they are.