Why repealing Obamacare is proving so difficult

“Do not confuse motion and progress. A rocking horse keeps moving but does not make any progress.” Alfred A Montapert

Alfred Montapert’s quote about not confusing motion and progress is an apt description of current House effort to get the failed Obamacare replacement process–one of the most significant setbacks for the Trump Administration–back on track.  The behind-the-scenes negotiations to craft a new version of the House GOP replacement bill have yet to produce progress on a consensus bill.

Republicans are struggling to repeal and replace Obamacare for three primary reasons. First, the stated goal of providing better coverage at a lower cost is exceedingly difficult if not impossible. Second, without Democratic support, Republicans face procedural rules that limit the scope of what can be changed. Finally, the Republican Caucus is not monolithic and deep policy disagreements  among hardliners and moderates have made consensus challenging.

First, President Trump has said he wants to broaden healthcare access and provide better coverage for Americans at a lower cost. But these goals are inconsistent. The Affordable Care Act created new markets for the uninsured – with subsidies for those with moderate incomes to make insurance affordable – and it offered the states money to expand the Medicaid programs. But it’s simply not possible to roll back coverage and not affect healthcare access. Also, it’s equally difficult to improve access or coverage without increasing beneficiary out-of pocket or federal costs. Americans across the political spectrum support health coverage for the uninsured and a legislative push to reduce Obamacare’s substantial costs will ultimately impact beneficiary coverage. This is one of the reasons that curtailing entitlements is politically challenging.

Second, Obamacare repeal faces procedural barriers. Many Republican candidates campaigned on complete repeal of Obamacare. The fact remains that full repeal of Obamacare would take 60 Senate votes to overcome a Democratic filibuster.  To counter Democratic opposition, Republicans can proceed under budget reconciliation procedures that end filibusters with only 51 votes. However, those procedural rules limit provisions to items that directly affect federal revenues or outlays. Under Senate reconciliation rules, various insurance market reforms are prohibited. House conservatives bristled at the idea that key elements of Obamacare were not repealed under Speaker Ryan’s American Health Care Act (AHCA). They could not understand why an unelected Senate Parliamentarian should decide the content of their Obamacare repeal legislation.

The second time around we expect to see a House bill that is much broader in scope, the reconciliation rules be damned. The current House thinking appears to be to repeal portions of the ACA and attempt to lower costs regardless of whether those provisions impact outlays. Under this approach, the House will pass a broader bill and let the Senate figure out the budget procedures.

Third, consensus on how to proceed in the House remains elusive. Several modifications to the Ryan’s AHCA replacement have been discussed. First, conservatives are particularly interested in rolling back Obamacare’s essential health benefit requirements, which they believe dramatically increased health premiums. The White House conceding to repeal the essential health benefits in the AHCA caused problems with Republican moderates. Second, conservatives are pushing for state flexibility on Obamacare’s “community rating” provisions which require insurance companies to charge the same premium price to individuals regardless of health condition.  The new bill likely will give state waivers from ACA insurance if they can show that exemptions would improve coverage and lower costs. However among non-Freedom Caucus Republicans, there’s opposition to changes that would let insurers charge higher premiums to older adults, and many disapprove of cuts to Medicaid for low-income people. Third, moderates had raised concerns about the prior bill replacing the ACA’s subsidy system – created to help low and some middle income families purchase insurance on the state exchanges – with refundable tax credits.

On the advent of President Trump’s Inauguration, we expected a drawn out Obamacare fight between Republicans and Democrats, but not a major fight within the GOP. Obamacare repeal efforts in the House are far from dead. Speaker Ryan reminded participants in a donor event in Florida before Easter that Obamacare repeal and replacements were a major campaign promise made by President Trump and scores of GOP members in last year’s election. But Ryan’s AHCA was criticized for making the individual insurance market even less stable than under Obamacare. And every concession to Republican hardliners created additional problems for moderates, which is one reason Ryan’s AHCA failed to gain traction. Health care changes may slip on the national agenda but will reemerge because the ACA’s problems are not going away. The trick is to craft Obamacare alternatives that prove to be more popular- and that can pass Congress.

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Mark Weller

About Mark Weller