Cleaning Up the Healthcare Mess

 

Too many cooks spoil the soup. That old truism applies to the healthcare debate currently being waged in Congress.

Republicans were on the brink of a huge victory in cutting taxes and regulations that have weighed down the economy and burdened the American people with rising healthcare premiums. Yet conservative Republicans joined all the Democrats who held out for their ideological principles and thwarted passage of the reforms.

House Speaker Paul Ryan pulled the legislation at President Trump’s request when it was clear there were not enough votes for passage.

Democrats are celebrating the preservation of ObamaCare – for now. House Minority Leader Nancy Pelosi called the defeat of the AHCA “a victory for the American people.” Hillary Clinton tweeted “It’s a great day for all Americans.”

What Americans could they be talking about?

The demise of ObamaCare is recognized by all but the hard left. One out of every three counties in America has only one choice of insurance company on the ObamaCare exchanges. Some have none. Premium prices went up an average of 25% across the country this year and in some states like Arizona (116%) the increases have reached three figures. And that’s just to purchase the premium. After that you have to pay an average of $6000 deductibles for individual policies and $12,000 for families.

The only reason there isn’t widespread outrage is because most Americans (160 million) receive their insurance through their employer and pay little or nothing for the premiums. However, wages are being held down because employers have to spend more on providing health insurance benefits. Hours are being cut to avoid mandatory health insurance coverage for companies with more than fifty full time employees. Jobs are being eliminated as businesses collapse under the weight of the ObamaCare mandates.

It gets worse – soon! In 2018 there will be even fewer healthcare insurers participating on the exchanges as more and more bail out from the marketplace due to staggering losses. Molina Healthcare announced in February they will not offer healthcare insurance on the ObamaCare exchanges in 2018. Aetna CEO Mark Bertolini admitted ObamaCare was in a “death spiral” and predicted more insurers would withdraw because of the law’s poor risk pools. Aetna already dropped 70% of its ObamaCare offerings in 2017 because of losses exceeding hundreds of millions of dollars.

What went wrong?

Start with the Democrats refusing to acknowledge the need to repeal and replace ObamaCare. This left Republicans needing wide spread support within the Party to pass the needed legislation. They needed to stick together to succeed.

For seven years Republicans have had the “luxury” of being able to espouse their conservative ideology without any real impact on legislation. With Democrats in control of Congress and the White House under President Obama, nothing conservative ever made its way into the law. Even though conservatives voted more than 90 times for symbolic repeal of ObamaCare, there was never any real chance these votes would become law because Obama would veto them.

The heart of the opposition in the Republican Party is called the Freedom Caucus. This group of 29 House Republicans is sufficient to defeat any legislation that doesn’t satisfy their demands. The Wall Street Journal editorial board calls them the “Freedom-From-Reality Caucus.” Rather than compromise their ideals they crushed the chance for reform by holding out for their principles. But refusing to compromise is the difference between the opposition party and the governing party.

Conservative Demands

The opposition of the conservatives focused on two issues:

  • Essential health benefitsthis refers to the list of benefits that must be included in every ObamaCare-compliant insurance policy. The list was originally determined at the discretion of then-HHS Secretary Kathleen Sebelius as codified in the Affordable Care Act. This can be changed at the discretion of current HHS Secretary Tom Price – as planned by the Republican leadership. However, the Freedom Caucus wants that eliminated in the new legislation, not trusting Democrats who might reverse the changes by Secretary Price at some future date.
  • Lowering insurance premiums – The Freedom Caucus also wants to lower insurance premiums more than the current legislation offers. Although measures are promised by House Speaker Ryan in phases 2 and 3 which will further lower premiums (deregulation, eliminating mandates, selling insurance across state lines, actuarial rating), they don’t want to rely on these future steps.

 

The House leadership made a calculated decision when they introduced the AHCA. Knowing they could not expect any support from Democrats, they decided to propose legislation that needed the fewest number of votes for passage.

The problem concerns the rules of the Senate. To get the legislation to pass the Senate with only 51 votes, it must be approved by the Senate parliamentarian under the rules of “reconciliation.” This means the changes made must be budget-related. Since changing the essential health benefits will probably not pass parliamentarian scrutiny, this was left out of the original bill. Other desired changes such as increasing flexibility of HSA accounts, tort reform and selling insurance across state lines were also left out for the same reason.

The Way Forward

Republicans can choose one of two pathways forward:

  • Wait for complete ObamaCare collapse – President Trump has repeatedly said it’s only a matter of time until the whole ObamaCare system collapses – and then the real crisis will come. Republicans could wait for that to happen to force Democrats to come to the table to fix the problems they created in the first place.
  • Introduce new legislation with all the changes needed – Rather than craft a bill designed to adhere to the rules of “reconciliation” they could instead introduce a new bill with all the changes Republicans agree are needed, including the demands of the Freedom Caucus, and pass it through the House with the necessary Republican votes. Then send the bill to the Senate where it will need 60 votes for passage. That will put the pressure on those Democrats who are running for reelection in states won by Trump (there are ten) and if they fail to support the legislation they will be responsible to the voters for failing to rescue the healthcare system.

 

President Trump has said it may come down to the first choice – but I would prefer the second. Syndicated columnist Charles Krauthammer has advocated the second and his reasoning is sound. This approach should unite the factions in the Republican Party and show they intend to govern. That’s what the American voters asked for and that’s what they should deliver.

2 comments

  1. Dr. Roberts,

    Another alternative would be to drop the ideological position that ObamaCare must be ‘repealed’, and work with democrats to fix the parts of the ACA that don’t work. Only 17% of US voters thought TrumpCare was a good bill, and only 6% thought it was very good. Most credible analyses said it would increase costs for the most vulnerable among us and at the same time shift billions of cost to the states and give a huge cost break to the rich. President Trump ran on a populist agenda and needs to govern with moderate democrats from the middle, not the hard right. Romy

    Comment by Romy Tomlinson on March 27, 2017 at 1:26 pm

  2. I agree that the initial analysis of the bill showed increased costs for the older low-income Americans and that the tax cuts favored the rich. However, this bill was only intended as the first step in a three step process that would bring the costs down for everyone once all of the necessary provisions were passed in the final bill. The large “tax cut” you refer to was only giving back the $1.2 Trillion tax increase that was passed through to the same people in ObamaCare.That tax increase has been hurting business which hurts low-income and middle class Americans by eliminating good jobs. I am sure that the final bill would have been much better for all Americans if Republicans had trusted their leadership to the end of the three step process. Not trusting that process has defeated the bill, left all Americans with a failing system, and compromised tax reform intended to benefit especially the middle class. I am sure Trump wants to govern more moderate than the far right wants but so far the far right is defeating his plans.

    Comment by Robert Roberts on March 27, 2017 at 1:51 pm