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The Lesson Ryan Won’t Learn

March 24, 2017

For seven years, Congressional Republicans have been obsessed with the Affordable Care Act – that is, with their desire to repeal it. After Republicans took majorities in the House of Representatives in 2010 and in the Senate in 2014, each house voted almost innumerable times for bills that would repeal Obamacare. Republican unity was ensured by the certainty of President Barack Obama’s veto, which meant that voting for ACA repeal was an act of opposition to President Obama and not an act of policy-making. While Obama remained president, Obamacare repeal bills had no substantive connection to health care policy.

Now of course Donald Trump is president. But Obama’s presidency is still recent enough that repealing Obama’s signature legislative achievement still operates as an act of opposition to the former president, feeding conservatives’ deep psychological need to erase every legacy of the Obama presidency. But since President Trump will sign pretty much any bill that Congress sends him under the rubric of Obamacare repeal, Republicans are now responsible for the policy consequences of repeal.

Here is what it looks like when Republicans take responsibility for ACA repeal: 24 million fewer Americans would have health insurance in 2026 than under Obamacare. Not surprisingly, the Republican “repeal and replace” bill was enormously unpopular: just 17 percent of Americans want the Republican bill to become law. It’s hard to find any piece of legislation that unpopular – Obamacare itself never dropped below 37 percent. Even in the reddest of red states, Republican representatives and senators were met at town halls by firestorms of opposition to ACA repeal.

Faced with a humiliating loss in the House of Representatives, Speaker Paul Ryan today withdrew the ACA “repeal and replace” bill.

The most important thing to understand about the House bill was that it wasn’t about improving Americans’ health care. Obamacare opponents have dressed up their opposition with talk about the cost of premiums, deductibles and co-pays, but that wasn’t truly their concern. If costs were the true concern of conservatives, we’d have heard lots of discussion of questions like these: are costs higher under the ACA than they would have been without the ACA; are premiums going to rise every year as much as they did last year, or was that (as many economists believe) a one-time correction for the fact that premiums rose very slowly in all the previous years of Obamacare?

The hard-right Obamacare opponents dressed up their opposition with talk about “freedom” – their professed concern being that consumers should have the freedom to buy insurance that covers what they want to cover. There’s some appeal to the proposition that men shouldn’t have to pay for maternity insurance. But the idea that consumers should have the “freedom” to buy insurance that doesn’t cover hospitalization and emergency room care is hard to defend.

In fact, the best proof that the goal of ACA repeal was not to improve health care was in the deal that Trump and Ryan made with House conservatives earlier this week – the repeal bill was revised to eliminate the mandate that insurance policies cover “essential health benefits.” The ACA requires that health insurance policies cover ten essential health benefits: outpatient services, emergency room care, hospitalization, maternity, mental health and substance abuse services, prescription drugs, rehabilitative services, lab tests, preventive care such as vaccines, and pediatric vision and dental care.

Not covering these services would certainly make health insurance cheaper, just like auto insurance would be a lot cheaper if it didn’t cover car crashes. It would be cheaper, because it would be almost worthless.

ACA opponents love to repeat their mantra, “Obamacare is a failure.” The problem is, Obamacare is a success in several important respects.

First and foremost, at least 20 million more Americans have health insurance than before Obamacare. Republicans like to claim that deductibles and co-pays are so high that the insurance has little effect, and there is some truth to that for a small slice of the insurance pool: those who don’t have group insurance policies through their jobs, and whose income is just above the maximum to be eligible for federal subsidies. People in that position have little choice but to buy the cheapest possible individual insurance policies – and of course the cheapest policies provide the least benefits.

There are a number of possible solutions to that problem. But the Republican proposal to convert premium subsidies to tax credits and then slash them drastically is no solution.

Those who gained health insurance under the ACA are more financially secure than they would have been without it. Medical debt and medical bills in collection have declined. The reduction in unpaid medical bills has to be good for the health care industry as well.

To the extent that children and young adults have gained access to health care, the ACA constituted an important measure against inequality. Employment opportunity and financial security throughout life depend in very large part on access to health care and education in youth. Access to neither should depend on the accident of birth.

Incidentally, the ACA has reduced the federal deficit below what it would have been without the ACA. This is because the ACA has reduced the rate of growth of health care costs generally, including those health care costs paid by the federal government. Federal health care cost savings under the ACA have been greater than the federal costs of the ACA – which means that the savings have been considerable.

The ACA does have problems. The individual health care insurance market remains almost impossibly complex, confusing to all but the most expert among consumers. And American health care remains by far the most expensive in the world, without achieving anything close to the world’s best outcomes. (For example: Cuban life expectancy is essentially equal to ours, but Cubans pay 93 percent less for health care than Americans do.)

Despite the individual mandate and the tax penalty that backs it up, young, healthy Americans have not signed up for insurance in sufficient numbers to maintain a sound risk balance in the insurance pool. It’s fair to wonder how much of this is due to the constant trash-talking of the ACA by its opponents, now including the President of the United States. It’s also fair to wonder how much is due to the expectation that the now-predominant Republicans would repeal the individual mandate and the tax penalty.

Those speculations aside, the problem has a number of fixes, perhaps the simplest being to increase the tax penalties.

Finally, the state exchanges for individual health insurance policies have not sustained a desirable level of competition – hundreds of counties now have just one provider in the exchanges. It’s impossible to separate out the inherent effects of the ACA from the insurance companies’ expectation that the ACA was about to be repealed. In either event, there surely are fixes to this problem that don’t involve scrapping the exchanges altogether.

Medicaid expansion has been a huge success. Medicaid is easier to understand than the individual policy market, it is government-paid (not single-payer, like Medicare, but jointly federal- and state-paid, and largely state-administered). The ACA made Medicaid benefits available to more Americans – although 19 states opted not to take advantage of it.

The only problem with Medicaid expansion is that it costs money – federal tax money. And therefore ACA opponents proposed not only to prohibit more states from agreeing to expanded Medicaid, ACA opponents proposed to slash Medicaid funding and convert the remaining funding from payments for medical care to block grants to states.

Congressional opposition to the ACA has been largely ideological, not operational. Conservatives objected to the ACA’s expansion of federal authority, increases in federal taxes, and federal intrusion in to the free market. The opposition was not founded on concern for the quality or availability of health care.

Since their problem was ideological, Republicans didn’t even try to get Democratic support for their “repeal and replace” solution to that problem. (Republicans often accuse President Obama and Congressional Democrats of enacting the ACA without Republican support, but that wasn’t for lack of trying. Democrats tried hard, for more than 18 months, to work out a bill that Republicans would support. Only when it became clear that Republicans would support no bill that substantially expanded health care did Democrats go it alone.)

What Republicans have failed to appreciate is that their constituents aren’t as ideological as they are. Their constituents want affordable health insurance, and if “freedom” means the right to choose between health care and food, their constituents will gladly do without a little freedom.

The lesson that Republicans could learn from this “repeal and replace” debacle is that they need to re-focus from negating the Obama presidency to delivering for voters – and in this case, that means making health care better, cheaper, or both. Republicans could decide to work with Democrats – to improve competition in the state exchanges, for example.

But they won’t. Neither the Congressional Republican leadership nor President Trump is anywhere close to giving up the ambition of undoing the Obama presidency. Maybe the 2018 mid-terms will sober them up. But I’ll give you odds that today’s “repeal and replace” fiasco won’t do the trick.

 

 

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