If you've ended up here from installment #1, you already know that congressional Republicans plan to use a parliamentary tool known as 'budget reconciliation' to partially repeal the ACA. And you know that if Republicans are able to pass a reconciliation-based repeal this winter/spring, they'll create a big chaotic mess in the health insurance markets just in time for the 2018 mid-terms. (Click here for a checklist of where Republicans are in the process and an overview of what they're planning for the next two years.)
But that's only part of the story. What do the politics look like for Republicans now that their rhetoric around repeal is suddenly being taken seriously?
Republican Congressman Mike Coffman (CO) got a small taste when he was forced to sneak out of his own constituent meeting early.
But Republicans have reason to worry about much more than just contentious constituent meetings because...
There are big differences between what Republicans have planned and what Trump voters think they voted for
Congressional Republicans have pointedly refused to answer whether their plans will cover the same number of people currently insured under the ACA. (We know they don't.)
They have been careful to say that their ACA replacement plans will lead to "universal access" not "universal coverage." (Paul Waldman has a good piece on the meaningless of "access.") Meanwhile, their plans are rooted in the idea that if consumers are exposed to more "market risk" (bare bones coverage, more "cost-sharing" through higher deductibles and co-pays), they'll use less health care, which will in turn lower costs.
That premise is debatable. The ACA made preventive coverage free in part because it can be cheaper to pay for more care (particularly preventive care) upfront than to wait until small problems become big ones. Furthermore, health care is often both "inelastic" (i.e. when the price goes up, people still need life-saving care, so they have to pay whatever it costs—even if it bankrupts them) and inversely-correlated with price (i.e. the more expensive a test or drug, the better or more effective people assume it is). Health care is one of those cases where price transparency can play little role in controlling costs or can actually lead people to spend more. Even if low-income households go without necessary care, middle- and upper-income households still put upward pressure on costs.
A good explanation of Republicans' approach came from Republican Congressman Bill Huizenga (MI), who got into trouble for saying he didn't take his son to the ER for a broken arm because it was cheaper to wait until the next day.
**One thing to note: the majority of Republican replacement proposals have been built on the idea that high deductibles and skimpier coverage will lead to lower premiums, and so they provide much less financial assistance to cover premium costs, particularly for low- and middle-income households. At the same time, Republicans propose once again allowing insurance companies to charge older and sicker customers much, much more. As a result, most ACA-insured households will see both their monthly costs and their deductibles rise.**
As Ezra Klein notes, "It’s typically true in politics that when elected officials criticize a bill for its specific outcomes, they want to pass legislation that responds directly to those criticisms. But it’s not true here. Republicans are caught between the criticisms of Obamacare that are popular to make and the plans they actually want to pass." [emphasis mine]
In the realm of absurd Trump promises, the one to replace the ACA with "something terrific" is actually important because it's clear that Trump voters really do expect him to replace the ACA with something better than what they have now. In the last few weeks there have been a number of articles highlighting this disconnect, including an extensive set of focus groups conducted by the Kaiser Foundation.
Rank-and-file Republicans in the House and Senate who have run against Obamacare's flaws for years are—like the American people—only now starting to realize that their replacement proposals are built upon intentionally exacerbating all of those same flaws.
I can't emphasize this enough. The party's Mitch McConnells knew they were being cynical when they exploited high deductibles and rising premiums to score political points. But your average Republican member of Congress didn't. And neither did his or her constituents. These are the guys who have been reflexively critical of the ACA without really understanding what their own platform means. These are the guys whose votes will be needed to pass "repeal and replace."
At the same time, Republican members of Congress are very aware that they could be left out to fall.
As you probably heard, House Republicans tried to gut the Office of Congressional Ethics as one of their very first tasks. They were stopped by a blizzard of outraged constituent phone calls—which is a good reminder that constituent outreach really does work!
But just as importantly, after it was clear which way the winds were blowing, Trump tweeted out his disapproval, throwing his House teammates squarely under the bus. Being on the receiving end of a Trump twitter tantrum seems to have really impacted rank-and-file members. (Republican whisperer Robert Costa tweeted at the time: "Fascinating to discuss the effect of Trump's tweets with GOP members. They watched from afar in 2016, now it's their life.")
Members know that if an ACA repeal vote leads to massive disruptions in health care, Trump will leave them hanging. Meanwhile, hospitals, doctors, and conservative policy experts are warning that "repeal and delay" could lead to ... massive disruptions in health care.
That is making a lot of electeds nervous. House Speaker Paul Ryan (R-WI)'s message is that the ACA individual markets are entering a death spiral on their own—they aren't. But regardless of the substance, members of Congress know that the moment newspapers report Congress has "repealed Obamacare," it will become exponentially harder for Republicans to explain to voters why their bill didn't fix every problem.
If Republicans use reconciliation to pass a partial repeal and delay, we can expect them to start funneling subsidies back into insurers (the same subsidies they sued to stop) because they know market disruptions will only hurt them. (Jonathan Chait has an interesting piece arguing that if Republicans pass repeal and delay, they'll simply make the delay part indefinite.)
As I noted earlier, the success of Republicans' plan to partially repeal the ACA through reconciliation depends on the willingness of vulnerable 2018 Senate Democrats to help them with replacement. Thirteen moderate Senate Democrats sent a letter to Republicans saying they would be willing to work with Republicans on fixing the ACA—which has been their position all along. The conservative Washington Examiner alternately framed this as "Obamacare cracks show as 13 Dems say they could vote to reform health law" and "Moderate Dems threaten Republicans on Obamacare" but Senate Republicans understand that the correction interpretation is the latter one.
The Democrats wrote: “By pushing an immediate repeal through a partisan reconciliation process, we won't have the opportunity to work together and build on common ground. By moving forward with no plan in place for the future of our health care system, those who support repeal assume the responsibility of mitigating the unnecessary and avoidable chaos this will create.”
All of which is making some Senate Republicans nervous. Five Republican senators led by Bob Corker (R-TN) filed an amendment to push back Congress’s consideration of ACA repeal. And at least 10 Republican senators (including from some surprising corners) have publicly voiced concerns about separating repeal from replace. This, in turn, amplifies concerns among rank-and-file House Republicans that they will go out on a limb only to find that their Senate colleagues have cut it off and left them to fall.
Via the LA Times:
So what now?
Senate and House Republicans each completed the first step in repeal by passing a budget resolution. (As a reminder, the budget resolution authorizes the reconciliation process; the reconciliation bill is what will actually repeal parts of the ACA. See my checklist here.) This part happened mostly according to plan and Republicans have been couching the vote on the resolution as "procedural" and not "substantive."
That means: don't read too much into this vote.
Rand Paul (R-KY) joined all of the Democrats in opposition, but I wouldn't count Paul as an ally or as a reliable vote against repeal through reconciliation. Although he has been one of those calling for simultaneous repeal and replacement: "I just spoke to @realDonaldTrump and he fully supports my plan to replace Obamacare the same day we repeal it. The time to act is now."
Meanwhile, Republican senators like Susan Collins (ME), Lisa Murkowski (AK), and Dean Heller (NV) voted for the budget resolution to start the process but have raised concerns about partially repealing the ACA without a replacement plan in hand.
This is really important.
Republicans can't fully repeal the ACA through reconciliation. Period. They can only take the wheels off the car, setting up chaos.
GOP leadership can attach budget-based provisions to reconciliation—like more money for community health centers—and claim that they are doing "replacement" at the same time as repeal. That might get them enough votes to pass their reconciliation bill.
But it won't change the underlying economic reality for insurance companies trying drive a car up on blocks. And claiming that they have enacted repeal and replace leaves Republicans much, much worse off: if they've passed a "replacement" that doesn't work, they will face the wrath of angry voters.
Meanwhile, full ACA repeal with full replacement can't be accomplished through reconciliation, it requires 8 Democratic senators to get on board. That means a months-long slog to build a package acceptable to Democrats.
So far, no Republicans have put forward such a package. For example, Paul is rolling out a replacement plan that will replace the ACA's subsidies and consumer protections with "the freedom to choose inexpensive insurance free of government dictates." We know that's code for no preventive care, the return of pre-ex conditions and coverage caps, high deductibles, hefty co-pays, and more.
When Sen. Chuck Schumer says Republicans are like "the dog who caught the bus" and now they "don't know what to do," this is what he means.
See my first installment HERE on what Republicans can and can't do through reconciliation—and what that means for health care costs.
See my third installment HERE for a checklist of what Republicans have done and an overview of what they're planning for the next two years.
But that's only part of the story. What do the politics look like for Republicans now that their rhetoric around repeal is suddenly being taken seriously?
Republican Congressman Mike Coffman (CO) got a small taste when he was forced to sneak out of his own constituent meeting early.
But Republicans have reason to worry about much more than just contentious constituent meetings because...
There are big differences between what Republicans have planned and what Trump voters think they voted for
Congressional Republicans have pointedly refused to answer whether their plans will cover the same number of people currently insured under the ACA. (We know they don't.)
They have been careful to say that their ACA replacement plans will lead to "universal access" not "universal coverage." (Paul Waldman has a good piece on the meaningless of "access.") Meanwhile, their plans are rooted in the idea that if consumers are exposed to more "market risk" (bare bones coverage, more "cost-sharing" through higher deductibles and co-pays), they'll use less health care, which will in turn lower costs.
That premise is debatable. The ACA made preventive coverage free in part because it can be cheaper to pay for more care (particularly preventive care) upfront than to wait until small problems become big ones. Furthermore, health care is often both "inelastic" (i.e. when the price goes up, people still need life-saving care, so they have to pay whatever it costs—even if it bankrupts them) and inversely-correlated with price (i.e. the more expensive a test or drug, the better or more effective people assume it is). Health care is one of those cases where price transparency can play little role in controlling costs or can actually lead people to spend more. Even if low-income households go without necessary care, middle- and upper-income households still put upward pressure on costs.
A good explanation of Republicans' approach came from Republican Congressman Bill Huizenga (MI), who got into trouble for saying he didn't take his son to the ER for a broken arm because it was cheaper to wait until the next day.
Huizenga says more responsibility needs to shift to the shoulders of patients to reduce costs. One way to do that is having them pay a bigger share of their medical expenses by increasing their insurance deductibles and incentivizing them to use HSAs, health savings accounts, to sock away pre-tax money to pay medical bills.But, as this conservative pundit notes, most Republicans haven't been as open as Huizenga about their approach:
"At some point or another we have to be responsible or have a part of the responsibility of what is going on," Huizenga said. "Way too often, people pull out their insurance card and they say 'I don't know the difference or cost between an X-ray or an MRI or CT Scan.' I might make a little different decision if I did know (what) some of those costs were and those costs came back to me."
Republicans are in serious danger of repeating Obama's mistake, because they are having a tough time stating a simple truth, which goes something like this: "We don't believe that it is the job of the federal government to guarantee that everybody has health insurance."Trump and his team have repeatedly promised that no one who currently has insurance will lose it. Meanwhile, Trump, Senate Majority Leader Mitch McConnell (R-KY), and others have complained about high deductibles in the ACA, even though Republicans view high deductibles as features, not bugs.
**One thing to note: the majority of Republican replacement proposals have been built on the idea that high deductibles and skimpier coverage will lead to lower premiums, and so they provide much less financial assistance to cover premium costs, particularly for low- and middle-income households. At the same time, Republicans propose once again allowing insurance companies to charge older and sicker customers much, much more. As a result, most ACA-insured households will see both their monthly costs and their deductibles rise.**
As Ezra Klein notes, "It’s typically true in politics that when elected officials criticize a bill for its specific outcomes, they want to pass legislation that responds directly to those criticisms. But it’s not true here. Republicans are caught between the criticisms of Obamacare that are popular to make and the plans they actually want to pass." [emphasis mine]
In the realm of absurd Trump promises, the one to replace the ACA with "something terrific" is actually important because it's clear that Trump voters really do expect him to replace the ACA with something better than what they have now. In the last few weeks there have been a number of articles highlighting this disconnect, including an extensive set of focus groups conducted by the Kaiser Foundation.
Via NYT: They spoke anxiously about rising premiums, deductibles, copays and drug costs. They were especially upset by surprise bills for services they believed were covered. They said their coverage was hopelessly complex. Those with marketplace insurance—for which they were eligible for subsidies—saw Medicaid as a much better deal than their insurance and were resentful that people with incomes lower than theirs could get it. ...Jonathan Chait provides the best summation for the Republican conundrum:
But asked about policies found in several Republican plans to replace the Affordable Care Act—including a tax credit to help defray the cost of premiums, a tax-preferred savings account and a large deductible typical of catastrophic coverage—several of these Trump voters recoiled, calling such proposals “not insurance at all.” ... These voters said they did not understand health savings accounts and displayed skepticism about the concept.
When told Mr. Trump might embrace a plan that included these elements, and particularly very high deductibles, they expressed disbelief. They were also worried about what they called “chaos” if there was a gap between repealing and replacing Obamacare. But most did not think that, as one participant put it, “a smart businessman like Trump would let that happen.” Some were uninsured before the Affordable Care Act and said they did not want to be uninsured again. Generally, the Trump voters on Medicaid were much more satisfied with their coverage.
The health-care plans people like are ones such as Medicare, or employer-sponsored insurance—plans in which all customers pay the same rates regardless of age or preexisting conditions, and which don’t put them at risk of paying out huge costs if they get sick. Obamacare is less popular than those kinds of insurance because it has more market features. [emphasis mine] There’s more age discrimination, and higher deductibles designed to force consumers to be price-conscious. Republican health-care plans go much, much farther in this direction. They offer threadbare, catastrophic coverage with enormous deductibles. The English, vernacular term for the kind of insurance Republican health-care plans would offer is “crappy.” There is no world in which Republicans are going to give people “something terrific” or even close to it.And that plays into something that the Kaiser Foundation found and that Waldman notes in his piece:
So on one hand, Republicans are saying, “It’s terrible that deductibles have increased!” while what they actually want to do is increase deductibles. I should also note that the people made most vulnerable by repeal—the more than 12 million Americans who benefited from the law’s expansion of Medicaid—don’t pay deductibles. Which may explain why, as the Kaiser Family Foundation’s Drew Altman has written about focus groups conducted with Trump voters: “Those with marketplace insurance—for which they were eligible for subsidies—saw Medicaid as a much better deal than their insurance and were resentful that people with incomes lower than theirs could get it.”Interesting, you say, but how does this affect the repeal vote now?
Rank-and-file Republicans in the House and Senate who have run against Obamacare's flaws for years are—like the American people—only now starting to realize that their replacement proposals are built upon intentionally exacerbating all of those same flaws.
I can't emphasize this enough. The party's Mitch McConnells knew they were being cynical when they exploited high deductibles and rising premiums to score political points. But your average Republican member of Congress didn't. And neither did his or her constituents. These are the guys who have been reflexively critical of the ACA without really understanding what their own platform means. These are the guys whose votes will be needed to pass "repeal and replace."
At the same time, Republican members of Congress are very aware that they could be left out to fall.
As you probably heard, House Republicans tried to gut the Office of Congressional Ethics as one of their very first tasks. They were stopped by a blizzard of outraged constituent phone calls—which is a good reminder that constituent outreach really does work!
But just as importantly, after it was clear which way the winds were blowing, Trump tweeted out his disapproval, throwing his House teammates squarely under the bus. Being on the receiving end of a Trump twitter tantrum seems to have really impacted rank-and-file members. (Republican whisperer Robert Costa tweeted at the time: "Fascinating to discuss the effect of Trump's tweets with GOP members. They watched from afar in 2016, now it's their life.")
Members know that if an ACA repeal vote leads to massive disruptions in health care, Trump will leave them hanging. Meanwhile, hospitals, doctors, and conservative policy experts are warning that "repeal and delay" could lead to ... massive disruptions in health care.
That is making a lot of electeds nervous. House Speaker Paul Ryan (R-WI)'s message is that the ACA individual markets are entering a death spiral on their own—they aren't. But regardless of the substance, members of Congress know that the moment newspapers report Congress has "repealed Obamacare," it will become exponentially harder for Republicans to explain to voters why their bill didn't fix every problem.
If Republicans use reconciliation to pass a partial repeal and delay, we can expect them to start funneling subsidies back into insurers (the same subsidies they sued to stop) because they know market disruptions will only hurt them. (Jonathan Chait has an interesting piece arguing that if Republicans pass repeal and delay, they'll simply make the delay part indefinite.)
As I noted earlier, the success of Republicans' plan to partially repeal the ACA through reconciliation depends on the willingness of vulnerable 2018 Senate Democrats to help them with replacement. Thirteen moderate Senate Democrats sent a letter to Republicans saying they would be willing to work with Republicans on fixing the ACA—which has been their position all along. The conservative Washington Examiner alternately framed this as "Obamacare cracks show as 13 Dems say they could vote to reform health law" and "Moderate Dems threaten Republicans on Obamacare" but Senate Republicans understand that the correction interpretation is the latter one.
The Democrats wrote: “By pushing an immediate repeal through a partisan reconciliation process, we won't have the opportunity to work together and build on common ground. By moving forward with no plan in place for the future of our health care system, those who support repeal assume the responsibility of mitigating the unnecessary and avoidable chaos this will create.”
All of which is making some Senate Republicans nervous. Five Republican senators led by Bob Corker (R-TN) filed an amendment to push back Congress’s consideration of ACA repeal. And at least 10 Republican senators (including from some surprising corners) have publicly voiced concerns about separating repeal from replace. This, in turn, amplifies concerns among rank-and-file House Republicans that they will go out on a limb only to find that their Senate colleagues have cut it off and left them to fall.
Via the LA Times:
Some moderate House Republicans were unhappy too, including Rep. Tom MacArthur of New Jersey, a leader of GOP centrists in the House Tuesday Group. He said he would oppose the budget proposal because there was too little information about the replacement, including whether people receiving expanded Medicaid coverage or healthcare subsidies under the existing law would be protected.
“We're loading a gun here,” MacArthur said. “I want to know where it's pointed before we start the process.” [emphasis mine]
So what now?
Senate and House Republicans each completed the first step in repeal by passing a budget resolution. (As a reminder, the budget resolution authorizes the reconciliation process; the reconciliation bill is what will actually repeal parts of the ACA. See my checklist here.) This part happened mostly according to plan and Republicans have been couching the vote on the resolution as "procedural" and not "substantive."
That means: don't read too much into this vote.
Rand Paul (R-KY) joined all of the Democrats in opposition, but I wouldn't count Paul as an ally or as a reliable vote against repeal through reconciliation. Although he has been one of those calling for simultaneous repeal and replacement: "I just spoke to @realDonaldTrump and he fully supports my plan to replace Obamacare the same day we repeal it. The time to act is now."
Meanwhile, Republican senators like Susan Collins (ME), Lisa Murkowski (AK), and Dean Heller (NV) voted for the budget resolution to start the process but have raised concerns about partially repealing the ACA without a replacement plan in hand.
This is really important.
Republicans can't fully repeal the ACA through reconciliation. Period. They can only take the wheels off the car, setting up chaos.
GOP leadership can attach budget-based provisions to reconciliation—like more money for community health centers—and claim that they are doing "replacement" at the same time as repeal. That might get them enough votes to pass their reconciliation bill.
But it won't change the underlying economic reality for insurance companies trying drive a car up on blocks. And claiming that they have enacted repeal and replace leaves Republicans much, much worse off: if they've passed a "replacement" that doesn't work, they will face the wrath of angry voters.
Meanwhile, full ACA repeal with full replacement can't be accomplished through reconciliation, it requires 8 Democratic senators to get on board. That means a months-long slog to build a package acceptable to Democrats.
So far, no Republicans have put forward such a package. For example, Paul is rolling out a replacement plan that will replace the ACA's subsidies and consumer protections with "the freedom to choose inexpensive insurance free of government dictates." We know that's code for no preventive care, the return of pre-ex conditions and coverage caps, high deductibles, hefty co-pays, and more.
When Sen. Chuck Schumer says Republicans are like "the dog who caught the bus" and now they "don't know what to do," this is what he means.
***
See my first installment HERE on what Republicans can and can't do through reconciliation—and what that means for health care costs.
See my third installment HERE for a checklist of what Republicans have done and an overview of what they're planning for the next two years.
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