Republicare

Seven Long Years for Seventeen Short Days

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After being introduced less than three weeks ago the AHCA/Republicare was going to be voted on yesterday, but the bill now seems dead without ever seeing the floor of the House. To say the least, this is a shocking turn of events. Getting it through Congress was supposed to be the east part, and the Senate was going to be the struggle. Instead we find ourselves here. This recasts how we must view the future of multiple groups in Washington, so instead of breaking down what happened, this post will focus on what we might expect going forward.

 

Paul Ryan

In my opinion it is Paul Ryan who is dealt the biggest blow by all of this. Republicare was clearly his bill as he was easily the loudest voice trying to drum up support for it. Now he finds himself as the last remaining champion of a bill his own party shot to pieces from multiple sides of the ideological spectrum and that the American people had a 17/56 approve/disapprove opinion of.[1]

It’s also important to note his predecessor, John Boehner, had a beginning of the end that looked awfully similar to this. Boehner expressed repeated frustration at being rebuffed by the Freedom Caucus Republicans when trying to move forward on issues that benefited from party unity. February 24th of this year Boehner even commented that a replacement to Obamacare was going to be incredibly difficult because house members, “will never ever agree what the bill should be.”[2] This lack of ability to wrangle the party and whip votes is what ultimately drove Boehner out of Washington and we might be seeing the same group pull the same move against the new speaker.

Freedom Caucus

Republicare created some strange bedfellows, but probably none stranger than the elected Tea Party members known as the Freedom Caucus and those still supporting Obamacare. Their insistence that this bill was simply ‘Obamacare lite’ and ‘the largest welfare program every proposed by Republicans’ made them some of this bill’s most vocal opponents. The death of this bill is going to make this group feel emboldened and like they will be able to pull this administration further to the right.

On the morning of the second day this bill was supposed to get a vote, Trump tweeted:

Even accusations that they’d be cast as pro-choice couldn’t sway them though. There are interesting dynamics at play here because in many of their districts, they won their elections in landslides, but Trump beat Clinton by similar numbers. Trump was speaking specifically of the chairman of the Freedom Caucus Rep. Mark Meadows(R-NC) when he said, “I’m gonna come after you, but I know I won’t have to, because I know you’ll vote ‘yes,’”[3] Will Trump attempt to primary out some of the people who opposed him in this bill? Would he succeed if his approval among Republicans starts to slip while Reps remain popular in their own districts? It’s tough to say and I’m not quite ready to start forecasting 2018.

Donald Trump

Truthfully, I believe Trump is happy this is done. You could tell right away that this wasn’t a fight his heart was in because of how the White House rebuffed labeling the bill TrumpCare.[4] If a man who is willing to put his name on average steaks sold at the Sharper Image actively fought putting his name on this, it was obvious what his opinion of the whole thing was.

Now, I don’t think he was happy to take the loss on this, but look at his reactions following Jeff Sessions recusing himself from the Russia investigation compared to this Friday afternoon. Either he’s pivoted to become much more presidential, or this loss really didn’t bother him much. Trump can now shift the focus to tax reform which is an issue that the American people give him more credibility on and that is a much more personal fight for him.

The question remains though, how much political capital did this fight cost him? The Freedom Caucus played chicken with Trump and he was the one to blink first. The storied deal making abilities of the man got put to their first legislative test and he was found woefully lacking. If anyone has proven they can brush off a failure and stumble forward it’s Trump, but this could signal to the rest of his party that he’s not invincible and could be challenged more regularly.

Democrats

Finally we get to the group that Trump blamed for the whole thing falling apart.[5] It seems like the current GOP plan is to let Obamacare continue on, possibly guarantee it fails but more on that in a moment, and then tell the American people that the group that doesn’t have control of a single branch of government was the one that orchestrated it all. Trump challenged the Democrats to reach across the aisle and bring him their plan and that’s exactly what they need to do.

Republicans are going to catch a great deal of flack for promising that they had a replacement ready to go seven years ago. They just needed to be given the house, the senate, and the presidency first. It seems increasingly likely that for the vast majority of that time there was no plan but to criticize, so Democrats now need to bring forward their plan. Every Democrat I’ve heard openly admits that Obamacare has flaws that need to be addressed so they should write the bill that they would have introduced if Clinton had won the election.

Doing so would help demonstrate that they intend to remain a governing party and not just turn into an opposition party. Failure to do so will also assist Republicans in their claims that every negative truth and fiction about healthcare in this country is entirely on their heads.

ACA/Obamacare

“We’re going to be living with Obamacare for the foreseeable future.” Those were Paul Ryan’s words at the brief press conference he held after the plan to vote on Friday was scrapped.[6] Trump echoed similar sentiments in his words to the media. With no replacement to vote on, the plan from the GOP is clearly to wait until Obamacare gets so bad that everyone else will come to the table and work with them.

It is something of a strange stance because if we take Trump at his word that Obamacare is a disaster for people, businesses, and this country, but he’s content to just leave it in place for now, that seems incredibly heartless. Either its destroying the economy and the American way of life and therefor needs attention immediately, or it’s none of those things.

More importantly though, there are actually many things this administration has the power to do on its own to either help Obamacare better serve the needs of the people or to undercut it entirely. As HHS Secretary Tom Price put it:

There are also plenty of things happening on the state level with Medicaid tied to Obamacare that this administration could bolster or hamstring.[7] It would be very easy for Trump and other Republicans to say they’ll just wait for Obamacare to fail while actively working behind the scenes to guarantee it does just that and for the fifth consecutive election, campaign on the idea that the American people need to grant them more power for them to come up with a replacement plan.

Final Thought

If you would have polled any politician the day after the most recent election, I would bet 95% would have agreed that Obamacare was virtually dead and gone. I know I would have laughed in your face if you would have told me that Republicans wouldn’t even vote on either repeal or replace. You could easily argue that both Clinton’s and Obama’s attempts at healthcare fixes cost their party a majority in Congress in the following election. Normally I would suggest history will repeat itself, but nothing about this last week has made me want to use the word normal unless it’s proceeded by the letters ‘ab’.

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The CBO’s First Findings on the AHCA/RepubliCare.

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The Congressional Budget Office(CBO) released its findings on the American Health Care Act(AHCA) which is also being called TrumpCare, RyanCare, and RepubliCare depending on who you ask. Their full summary can be read here. It is the first part of the GOP replacement for Obamacare and Paul Ryan wants the bill voted on in the house by Easter, but before we look at the findings, let’s recall some key things about the CBO.

The agency’s director is Keith Hall. He is an economist and was George W Bush’s pick for Commissioner of the Bureau of Labor Statistics. He has many traditional Conservative Economist beliefs including raising the minimum wage is bad and regulations are harmful. In February of 2015 House Republicans appointed him as director of the CBO.[1] This is important given that we should expect an agency under this man’s watch to either be neutral and data driven, or to lean right in their analysis.

Over the weekend several key Republicans preemptively took shots at the CBO and what they might find. From White House Budget Director Mick Mulvaney, “I love the folks at the CBO, they work really hard, they do, but sometimes we ask them to do stuff they’re not capable of doing, and estimating the impact of a bill of this size probably isn’t the – isn’t the best use of their time,” From White House Economic Adviser Gary Cohn, “We will see what the score is, in fact in the past, the CBO score has really been meaningless.”[2] The White House was clearly bracing for this report, so let’s dig in to what it says.

Number of Insured

In January the President said, “We’re going to have insurance for everybody. There was a philosophy in some circles that if you can’t pay for it, you don’t get it. That’s not going to happen with us.”[3] According to the CBO there will be 14 million more uninsured people next year and 24 million more uninsured people by 2026. Both of those numbers are compared to the projections for uninsured under Obamacare. Twenty four million people is the rough equivalent to the combined populations of Vermont, Alaska, North Dakota, South Dakota, Delaware, Montana, Rhode Island, Maine, New Hampshire, Idaho, West Virginia, Nebraska, New Mexico, Kansas, and Wyoming. Those 14 and 24 million are largely from one demographic though, the poor.

As you can see, the CBO estimates those living at 200% or less of the federal poverty level are hit the hardest. That would be a single person making $23,760 a year or a family of four making $48,600 a year. Particularly troubling is that age 50-64 column where the uninsured rate nearly triples.

Insurance Premiums

This one is more complicated. The CBO estimates that by 2019, premiums on the individual market place would increase 15-20% over the Obamacare numbers, but would come in 10% under the 2026 Obamacare estimates. Once again though, there is a group paying a disproportional penalty. Prior to the release of the CBO numbers, the AARP ran some estimates too and found a 64-year old earning $25,000 a year would see an increase in their premiums of $7,000.[4] The CBO disagreed and predicted a 64-year old earning $26,500 a year would have an increase in their premiums of $12,900. They would go from a net premium payment of $1,700 under Obamacare to $14,600 under the AHCA. That would mean a full 55% of their income would be going to their insurance premiums. The AARP had come out strongly against this bill before and I imagine there will be some heavy lobbying from them now.

Impact on Deficit

Over the next decade, the AHCA is expected to reduce the federal deficit by $337 billion over ten years. It was nearly a guarantee that this bill would cut from the deficit since it is being passed under reconciliation rules. This bill is technically a budget bill which is why it only needs a simple majority in both the house and the senate and therefor avoids the potential of a filibuster from the Democrats.

The bill largely accomplishes this with cuts to Medicaid. I was impressed they managed to remove the tax hikes from the ACA for top earners and still hit that number. This bill give a tax cut to the top 1% of earners of $33,000 and a tax cut to the top 0.1% of earners of $197,000. Less taxes on the wealthy and a budget deficit reduction are bound to get some big cheers from the GOP.

Expected Debate Points

The question now is will the tax hikes and deficit reduction be enough to sell the American people on the idea of 24 million people losing coverage and premiums increasing by over 700% for some of our citizens. There are three ways I’ve seen it spun so far.

  1. The CBO is wrong in general. I gave some quotes at the start of this article from this weekend. Since the report has been released, Health and Human Services Secretary Tom Price has stated, “We disagree strenuously with the report,”[5] The tricky part is cherry picking what to reject. It’s tough to say the report is entirely awful except for the part about the deficit reduction. It should also be noted again that the person running the CBO was appointed by Paul Ryan and is himself a lifelong conservative, so it would seem strange if he was biasing the numbers to hurt the party.
  2. The CBO doesn’t have all the numbers. It is true that the CBO estimate is just based on this bill and it isn’t the entire GOP plan. Trump has claimed there will be Phases 2 and 3. Those phases will be trickier since they can’t be passed under reconciliation rules and therefor can be filibustered by the Dems. Republicans are claiming that the rest of the plan, which hasn’t been released and we can’t see, will solve the issue of the rise in the uninsured. This sets up a dangerous showdown later on because if the AHCA passes as is then I’d predict Trump putting major pressure on the Dems to pass the rest. He’ll say if they don’t vote for it then all the uninsured will be their fault, essentially taking those 24 million people hostage to pass whatever is in the remaining two phases of the plan that we might not even get a chance to see publicly until after a senate vote on what has been proposed so far.
  3. The numbers don’t matter. There is a group of Republicans who philosophically believe that health care is not something the government should provide at all. They believe it should be entirely left to the free market. I’ve seen comments today on conservative message boards praising this bill as fighting back against tyranny and that this is people reclaiming their liberty. To this set of people it could remove coverage from every single person in the country, but they’d still think it would be better for everyone because it reduced the deficit and allowed capitalism to solve the issue. I don’t want to spend too much time rebutting this, because I disagree fervently with this stance, but it’s still important to remember that several congressman and senators are approaching the healthcare problem with this mindset.

Final Thoughts

In January, Obama had a message for the GOP, “I am saying to every Republican right now: If you, in fact, can put a plan together that is demonstrably better than what Obamacare is doing, I will publicly support repealing Obamacare and replacing it with your plan.”[6] The numbers from the CBO make it clear that Obama will not be supporting this bill. The numbers also make it clear that Trump’s campaign promises of providing better and cheaper healthcare coverage for everyone are not fulfilled by this bill. Is it possible Phases 2 and 3 could solve all the issues? Theoretically yes, but like the CBO I can only go off what has been released, and if this is the best the GOP can do after promising for seven years they had the silver bullet for our country’s healthcare woes, we just needed to give them full control over the whole government, then we’ve been severely lied to.