Vote it down and start over with full repeal.
We can now say with confidence that congressional Republicans will neither repeal nor replace Obamacare. Instead, they will try to “fix” it—which is impossible.
This morning Senate Republicans released a 142-page discussion draft of their counterpart to the House-passed AHCA bill.
While the House bill was lousy, the Senate bill is worse.
[Update, June 26: They’ve just released an updated version of the bill. The only difference is the insertion of a backdoor individual mandate (sec. 206). That makes it even worse, still.]
(For the reader’s convenience, I’ve compiled a brief list of all bill sections, at the end of this article.)
Neither the House nor the Senate bill repeals Obamacare, but at least the House version comes close to replacing it with something better (namely, more state flexibility to get out from under Obamacare’s onerous and costly federal insurance regulations). The Senate bill, compiled by a small group of Republicans convened by Senate GOP Leader Mitch McConnell of Kentucky, doesn’t even try to replace Obamacare. It merely tries to “fix” it. Except it doesn’t even do that, really.
McConnellcare leaves virtually all of Obamacare’s heavy-handed and unnecessary health insurance market regulations in place, including the most destructive one: the “community rating” price control mandate that prevents insurance rates from being set according to risk and thus, in combination with the mandate that forces insurers to take all comers (“guaranteed issue”), encourages people to wait until they get sick to seek coverage. Which in turn necessitates a mandate to purchase coverage. Which in turn necessitates mandates regarding what must be covered. Which in turn necessitates fights over abortion and contraception, and so on and so forth. Result: endless controversy, without any regard to what patients and doctors actually want. In short, the opposite of what any sane person would want.
McConnellcare is Obamacare with lipstick.
To be fair, it does have some good parts:
- It zeroes out Obamacare’s individual mandate penalties (sec. 104).
- It establishes Medicaid per-capita caps (sec. 133).
- It creates optional Medicaid block grants for states (sec. 134).
The latter two provisions are intentionally postponed till after the 2020 presidential election.
Additionally, the bill has some worthwhile tweaks to Health Savings Accounts (sections 121, 122, and 123).
But as for the rest? Meh.
Do the small handful of good changes count as progress? Sure.
Are they enough to make the bill supportable by those who support free-market, patient-driven health care and/or smaller, constitutionally limited government? No.
McConnellcare will not reverse Obamacare’s hefty premium hikes, nor halt the slow-moving collapse of its exchanges, nor make health care cheaper or better.
It will not make government smaller or reduce meddling in our lives by public and private insurance bureaucracies.
If this is what we’re going to get for our seven years of labor in the “repeal and replace” vineyard, we might as well walk away. Kill the bill and let congressional Republicans wither on the vine.
Passing nothing would be better for the country than passing a bill that “fixes,” and thus endorses and preserves, Obamacare.
Obamacare can’t be fixed.
Now, to be sure, this Senate draft is not the last word. Improvements are possible. We can amend it on the Senate floor, and in a conference committee with the House (if it gets that far).
But right now, things look pretty bleak for free-market health reformers.
Republicans can afford to lose only three of their members, if they want to pass a bill. In the 100-member Senate, assuming all 48 Democrats keep their vow to vote “no” on any Republican health reform bill, stopping the McConnellcare bill will only take three “no” votes from among the 52 Republicans. While ordinarily, under its filibuster/cloture rule, the Senate requires 60 votes (a three-fifths majority) to move a bill forward, this bill only needs 51 votes, since it is being considered under special “budget reconciliation” rules. The Constitution allows the Vice President to vote when necessary to break a tie. So adding it all up, Senator McConnell, the GOP leader, can afford to lose only three votes from his caucus.
Within hours of the release this morning, four conservative senators (Paul, Cruz, Lee, and Johnson) announced they oppose the bill, which none of them had a hand in drafting, “in its current form.” Several non-conservative senators quickly followed suit. Presumably most if not all of these senators are signaling a willingness to negotiate changes to the bill as the price of their ultimate support.
At this point, I find it hard to see Senate Republicans, as a group, agreeing to any changes that make any real difference for patients and doctors. Most senators don’t really work for patients or doctors, after all. They work, in effect, for the most powerful special interests, including of course the health insurance industry, which, by the way, gets upwards of $200 billion in ten-year tax cuts and subsidies in this bill. And judging by the Senate bill, I would say many Senate Republicans just don’t view Obamacare as that big of a problem. They are okay with cosmetic changes. Why would they risk additional criticism from the press and the Left by moving the bill rightward?
Early next week, we’ll see what the Congressional Budget Office (CBO) says about the bill’s likely effects on federal spending and deficits, and on the number of Americans with health insurance coverage. While CBO’s projections on insurance coverage have been unreliable, and should by no means be taken as gospel, they do provide a metric for gauging the bill’s chances.
If CBO predicts a significantly higher level of “coverage loss,” or a significantly higher level of premium increases, for the Senate bill than it predicted for the House version—which seems quite possible, given the Senate bill’s lack of an equivalent of the individual mandate, and its reductions and shifts in federal premium and Medicaid subsidies—then I don’t see how the bill passes.
And if McConnellcare fares worse than Ryancare on both coverage and costs, then I think we’ll be able to declare the Republican “repeal and replace” effort officially dead.
[Update, June 26: CBO’s report shows the bill to be, on the whole, comparable to the House bill—neither better nor worse, really. As already mentioned, the Senate also today inserted a backdoor individual mandate into the bill (sec. 206), which CBO takes account of in its estimates.]
But wait. There is another option.
Just pass the House bill.
For most conservatives, that represents the absolute minimum of acceptable reform.
Yes, I know. The Senate is too proud to do that. And too liberal. But hey, I’m trying to be creative here.
Even better idea: Start over, with a bill that repeals Obamacare “root and branch.”
Yes, we can repeal every word of Obamacare with only a simple majority in the Senate, under “budget reconciliation” rules, assertions to the contrary notwithstanding. But to do so, 51 senators have to agree.
The truth is Obamacare needs to be repealed “root and branch,” for two reasons.
First, the federal government has zero jurisdiction to regulate or subsidize health insurance, outside the context of federal employment.
And second, federal meddling in health insurance adds zero value for patients and doctors. The states and the private sector can handle those matters just fine.
One final thought. I’m now convinced the Senate filibuster rule has outlived its usefulness and needs to go. Without it, members of Congress could be considering a real health reform bill, or a series of bills, right now under normal rules, with normal amendments and debate, rather than trying to twist the legislation into a pretzel to satisfy the rules of “budget reconciliation” and the six-part “Byrd Rule test.” Any more, the filibuster only serves to lock in the Left’s gains. Take it away, and senators will no longer be able to hide their real intentions behind procedure. They would have to be honest when breaking their promises.
Dean Clancy, a former senior official in the White House and Congress, writes on U.S. health reform, budget, and constitutional issues. Follow him at deanclancy.com or on twitter @deanclancy.
Trumpcare: Senate Republican Discussion Draft
Proposed substitute amdt. to H.R.1628, 115th Congress
[Updated June 26, 2017]
Section Summaries
101. Tax credit: Recapture of tax credit overpayments.
102. Tax credit: Restrictions on premium tax credits.
103. Tax credit: Modifications to small business tax credit.
104. Insur. regs: Zeroing out of indiv. mandate penalties.
105. Insur. regs: Zeroing out of employer mandate penalties.
106. Insur. regs: New state stability and innovation program. *
107. Implementation: Creation of new fund.
108. Tax cut: Delay of “Cadillac” tax on high-cost health plans.
109. Tax cut: Repeal of tax on HSA OTC purchases.
110. Tax cut: Repeal of additional HSA withdrawal penalty.
111. Tax cut: Repeal of FSA contribution limitations.
112. Tax cut: Repeal of tax on prescription medications.
113. Tax cut: Repeal of medical device tax.
114. Tax cut: Repeal of health insurance tax.
115. Tax cut: Repeal of elimination of Part D-related deduction.
116. Tax cut: Reduction of med. exp. deduct. threshold.
117. Tax cut: Repeal of Medicare tax increase.
118. Tax cut: Repeal of tanning tax.
119. Tax cut: Repeal of next investment tax.
120. Tax cut: Repeal of tax on salaries of industry executives.
121. HSA reform: Increase of maximum contribution amount.
122. HSA reform: Additional catch-up contributions.
123. HSA reform: Special rule for certain health expenses.
124. Medicaid: 1-yr suspension of Planned Parenthood.
125. Medicaid: Sunset of existing expansion.
126. Medicaid: Reform and phaseout of expansion.
127. Medicaid: Restoring fairness in DSH allotments.
128. Medicaid: Reducing state costs.
129. Medicaid: Safety net funding for non-expansion states.
130. Medicaid: Changes to eligibility determinations.
131. Medicaid: Optional work requirement.
132. Medicaid: Provider taxes.
133. Medicaid: Per-capita caps.
134. Medicaid: Flexible block-grant option for states.
135. Medicaid: Quality performance bonus payments.
136. Medicaid: Treatment of certain Medicaid waivers.
137. Medicaid: Ensuring adequate consultation with states.
138. Medicaid: Optional aid for certain psychiatric services.
139. Insur. regs: Small business health plans.
201. Implementation: Elimination of existing fund.
202. New money for states to meet opioid crisis.
203. New money for community health centers.
204. Insur. regs: 5:1 community rating price controls.
205. Insur. regs: Med. loss ratio to be set by states.
206. Insur. regs: 6-mo. lockout period for non-continuous coverage.
207. Insur. regs: Changes to ACA 1332 innovation waivers.
208. Insur. regs: Funding for ACA cost-sharing subsidies.
209. Insur. regs: Repeal of ACA cost-sharing subsidies.
* Placed under CHIP, which has permanent Hyde protections.