The Republicans' quest to repeal and replace the Affordable Care Act feels a bit like the Hindu concept of Samsara, during which individuals live, die, and undergo reincarnation. It seems like we just hit the 'die' point once more. First, conservative Senators Jerry Moran and Mike Lee sank BCRA (the Senate's replacement for the ACA), arguing that it kept too much of Obamacare in place. Then, after McConnell began a push for full repeal (with a replacement at a later date), Sens. Susan Collins, Shelley Moore Capito, and Lisa Murkowski announced their opposition, preemptively sinking McConnell's Plan B.
Two questions on everyone's mind: are Republicans capable of legislating, and will this tiresome process continue?
Back in March, Paul Ryan and his minions in the House released the American Health Care Act, aptly named to remind onlookers of America's uniquely perverse health-care system. Despite his well-documented affection for Ayn Rand, Ryan's bill was not anarcho-capitalist enough for some conservative Republicans. In particular, they criticized the tax credits in the bill as a new entitlement, and didn't think the legislation went far enough to deregulate the insurance market. The bill was also too harsh for some moderates, with the CBO projecting 24 million people to lose health insurance over the next decade. Squeezed on both sides, the measure was pronounced 'dead' in mid-March. Ryan went so far as to declare Obamacare the 'law of the land'.
However, April showers bring medical bankruptcy, and the introduction of the MacArthur Amendment gave AHCA a new lease on life. Designed to address conservative complaints, this provision allowed states to obtain waivers for certain ACA regulations, namely community rating and essential health benefits. In practice, this would mean the proliferation of shoddy, high-deductible plans and exorbitant pricing for individuals with preexisting conditions.
Despite the transformation of Smeagol AHCA into Gollum AHCA to satisfy the bloodlust of the far right, moderates got on board. This acquiescence likely sprung from cosmetic changes made at the last second, namely an extra $8 billion for high-risk pools. With enough of both factions satisfied by changes to the bill, AHCA finally passed the House in early May.
Then came the super-secret boys club of 13 Senators that released the Better Care Reconciliation Act, another gem of a bill. The CBO estimates that BCRA would increase the number of uninsured Americans by 22 million over the next decade, cut Medicaid by almost $800 billion, raise premiums and deductibles for low-income Americans, and make it easy to price out those with preexisting conditions (thanks to the absurdly easy waiver process). While the Cruz Amendment sought to emulate the success of the MacArthur Amendment by slyly making the bill more conservative, the measure failed to appease the most hard-line right-wingers. Lacking 50 votes, BCRA is dead for the foreseeable future.
Why are the Republicans failing so miserably at passing health-care legislation? While there are plenty of political reasons, the fundamental problem is that Republicans have no coherent vision for health insurance in America.
Most Republicans want at least two things out of health-care reform: less government regulation, and lower taxes and spending. However, while doctrinaire conservatives yearn for these ends exclusively, GOP moderates also care about health-care for the poor and uninsured.
These additional goals are what create the GOP's woes: you cannot simultaneously have lower taxes and spending, less regulation, and a lower uninsured rate without dramatically lowering the price of healthcare or increasing government deficits.
The intuitive reason for this is fairly simple: if you lower taxes, then the government has less money for premium subsidies and Medicaid. Either the government has to shrink these programs, cut other spending, or borrow money. Given the GOP's aversion to budget deficits, the latter option seems unlikely. Furthermore, budget reconciliation rules (the fast-track process the Republicans are using) dictate that reconciliation bills can't increase the deficit outside of the ten-year budget window.
Cutting other spending is wickedly difficult, as attested to by current budget negotiations: the Republicans are seeking to cut food stamps, TANF, and other welfare programs, along with the EPA, State Department, Energy Department, and other agencies. These budget talks illustrate that there are very few painless spending cuts available. Choosing between throwing people off of food support or health insurance is not a fun decision.
Other options for cuts, such as defense, Social Security, and Medicare, are also off the table in the current political climate. Republicans probably couldn't make these cuts even if they wanted to: reconciliation rules dictate that reconciliation bills must only alter spending and revenue in areas under the jurisdiction of the assigned committee. As such, domestic spending cuts to non-health-care-related matters would be prohibited.
The government can't reduce regulations either. Out of all the ACA's regulations, the three conservatives hate the most are the individual mandate (everyone must buy insurance or pay a fee), community rating (can't charge sick patients higher prices in a given region), and essential health benefits (insurers must cover certain core services). Repealing these regulations would bring us back to the bad old days. Repealing the individual mandate would cause premiums to spike because many healthy individuals would exit the market absent the fee (pricing some out of the marketplace). The proliferation of sparse, high-deductible plans absent essential health-benefits would attract the healthy away from comprehensive care (further spiking premiums for the sick that need comprehensive care, and pricing some out of the market). The exclusion or surcharging of individuals with preexisting conditions is fairly self-explanatory. See a pattern? Unless the government was willing to generously fund a high-risk pool to cover sicker individuals, millions would lose health insurance without these regulations.
Thus, we return to taxing and spending. Republicans could conceivably deregulate the insurance market and lower the uninsured rate, but only if they were willing to spend oodles of money on high-risk pools. However, most experts believe that the paltry funds appropriated for "state flexibility" and high-risk pools in the GOP bills are woefully inadequate. Republicans could also maintain ACA insurance subsidies that would shield poor Americans from soaring premiums, but they don't want to do that either.
There is one more variable at play, and that is the cost of health-care. Almost everyone at this point knows that health-care costs in the United States are extremely high. Theoretically, if AHCA/BCRA slashed these costs, the GOP could gut regulations, lower taxes and spending, and hold steady the uninsured rate thanks to dirt-cheap health-care. However, this is wishful thinking. While some point to over-utilization of health-care as the culprit for high costs, the real villain is pricing. As Aaron Carroll points out, everything just costs more. There are likely many reasons for this, but showering individuals with cost-sharing (as would occur under the GOP plans) doesn't seem like it will make a big difference. For one thing, health care is a problematic market, with inelastic demand, externalities, poor information, and plenty of emotions that muddy decision-making. Indeed, empirical evidence indicates that consumers rarely shop around even when they can, and many procedures are hardly optional even in the face of substantial cost-sharing. As a result, adding market pressures to consumers can only go so far. Furthermore, the ACA already introduced more cost-sharing to the health insurance market (allowing cynical Republicans to rail against high deductibles during the 2016 campaign). I would be surprised if even more cost-sharing is the magic sauce to cure soaring health-care costs.
While I'm certainly glad these contradictions have held up the GOP's legislative agenda, the ideology upon which they settle is immensely important. If they choose the more conservative vision, where health-care is merely a consumer good in which the government should have a minuscule role, they will have chosen a dark, vile path, one in which dogmatic ideology outweighs rational compassion. This route involves prizing simplistic free-market principles over robust access to health-care.
However, if they go the other route, the GOP will have essentially acquiesced to the Democrats' philosophical framework. After all, if moderate Republicans think it is a bad thing to kick the poor off of government assistance, is it not a good thing to maintain or increase government aid and expand the insured population? Obviously, there is a point at which the costs of higher taxation outweigh the benefits of improved health-care, but moderates need to contend with the logical direction in which they are heading. Instead, GOP moderates gesticulate about how precious the Medicaid expansion is to their state, while simultaneously signing Grover Norquist's anti-tax pledge. They can't have it both ways.
No comments:
Post a Comment