Rand Paul’s Long Play
How Paul Was Able to Secure His Own Version of American Healthcare By Undermining His Own Party
Earlier this month, Trump signed an executive order introducing Association Health Plans, promising to revitalize bloated insurance markets by allowing individuals to shop for insurance plans across state lines. This move will likely undermine a critical provision of the Affordable Care Act, the county-specific insurance exchanges it outlines, and represents yet another setback for the ACA, whose untenability Trump has fervently sought to demonstrate — if not outright cause. Perhaps unexpectedly, this mandate also represents a major political victory for Senator Rand Paul.
Senator Paul, who has long championed Association Health Plans since the idea first appeared in his ill-fated “Obamacare Replacement Act”, was integral to the defeat of his Republican colleagues’ botched attempts at Obamacare repeal in the Senate. Accused at the time of letting “the perfect to become the enemy of the good”, his staunch opposition to both the Better Care Reconciliation Act (BCRA) and later Graham-Cassidy critically endangered Republican prospects of acting on campaign promises to repeal and replace the ACA. However, in light of Trump’s recent executive order, his defiance of party dogma has proven politically prescient.
In order to understand the genesis of this executive order, it is important to first understand its predecessor. Paul submitted “Obamacare Replacement Act” to the Senate in January to little excitement. Among other considerations, the bill included provisions for removing the individual mandate, stripping the Affordable Care Act of its protections against discrimination on the basis of pre-existing conditions, and importantly elaborating the development of Association Health Plans as a kind of collective bargaining unit. Once enacted, these organizations would enable participants to vie for insurance plans irrespective of state, theoretically enhancing competition between insurance providers. The bill faltered, only attracting one co-sponsor, and died before it could reach a vote on the floor.
In the aftermath of his bill’s failure, Paul remained stubbornly committed to the realization of Association Health Plans. This is observed in a July letter penned to party leader Mitch McConnell, wherein Paul outlined his opposition to BCRA, citing the absence of Association Health Plans as principal among his reasons. Weighing BCRA’s pending failure and the numerous objections to its provisions, McConnell instead opted for the so-called “Skinny Repeal” bill, which would have repealed the ACA without offering a replacement. Though Paul supported this proposal — it’s ratification would not have directly threatened the realization of his Association Health Plans at a later date — he would return to defy the party agenda again when it came time to vote on Graham-Cassidy.
Paul’s strategic genius came in recognizing that should Republicans fail to enact healthcare reform before the September 30 Senate deadline on budget reconciliation, they would lose their ability to unilaterally pass healthcare legislation without threat of a Democratic filibuster — he was able to facilitate as much by withholding his critical vote. Understanding the ensuing difficulty Republicans would face in the legislative branch, Paul shifted his strategy accordingly and turned to Trump.
As Graham-Cassidy lay in its death throes, Paul, having frustrated efforts to repeal the ACA in the Senate, tapped into Trump’s willingness to undo Obama’s legacy by any means necessary. In obviating reliance on the Senate, Paul was forced to adapt his January proposal to the executive. He accomplished this by advocating Trump reinterpret a federal labor law called the Employee Retirement Income Security Act (ERISA), which allows employers with employees in multiple states to shop for insurance plans in any of those states. Paul suggested Trump hijack ERISA by loosening the definition of “employer” to afford groups of individuals with common interests the same right, circuitously realizing Association Health Plans.
Trump’s subsequent readiness to indulge Paul should not have been surprising in light of comments he made during the second presidential debate, telling Anderson Cooper, “We have to get rid of the lines around the state, artificial lines, where we stop insurance companies from coming in and competing… We want competition.”
The actual consequences of this executive order remain unclear. Proponents tout that the mandate hypothetically costs nothing to enact, and is a potent way to stimulate competition in the insurance marketplace.
A more likely result will be continued hikes in premiums, as skittish insurers attempt to hedge their bets in an increasingly hostile marketplace. The order also threatens continued insurer participation in some of the shakier Obamacare exchanges by siphoning healthier participants away. Insurance giants such as Blue Cross Blue Shield have already vocalized opposition to the executive order. Paradoxically, insurer anxiety was a prominent reason for the increased premiums the order cites as its justification.
Another challenge lies in defining “Association Health Plans”, which remain problematically ambiguous — as a result, their purported benefits could be unevenly distributed among marginalized communities that may not as readily mobilize to form collective bargaining units. Skeptics also worry that Association Health Plans may not cover the same essential benefits laid out by the ACA. When contacted by NPR correspondent Ari Shapiro to ascertain whether they would promise the same basic protections guaranteed under the Affordable Care Act, Paul was unable to say so.
These uncertainties did little to deter Trump from taking another shot at Obama’s signature political achievement. In video of the order’s execution, you can see Paul standing alongside Trump in the Roosevelt Room, smiling triumphantly as he accepts the signatory pen from the president; it appears as though Paul has secured a legislative victory in the end by not passing any legislation at all.