GOP Health Care Plan Still Going Nowhere
According to the Washington Post, the Freedom Caucus and the White House are close to reaching a deal on health care reform. Just like their previous efforts, this is doomed to fail. The reason is that all the Republican health care bills have been more vulnerable from the left than the right. Moving farther to the right to accommodate the Freedom Caucus therefore only makes the bill harder to pass. The White House/Freedom Caucus negotiations are pure theater, whether they realize it or not.
The reporting on the new “plan” will likely focus on rules for the insurance exchanges set up by the ACA. The new plan seems to give states the option of rescinding the ACA’s essential health benefits, meaning that insurance companies would be free to offer plans that don’t cover, for instance, pregnancy and maternity care, mental health benefits, hospitalization, and so on. There’s good reason to give these changes attention, because they would make health insurance much more expensive for the people who would need these services. The policies surrounding the exchanges — the insurance regulations, the mandate, the subsidies — also tend to get more coverage because they are complicated and interesting, at least to the sort that cares about these things. These changes alone would probably be enough to sink the new GOP bill.
But the more important issue is much simpler than that, and is less amenable to compromise within the GOP. The main driver of the CBO’s projection that the GOP’s first Repeal and Replace plan would cause 24 million to lose health insurance by 2026 was not changes to the exchanges but the rollback of Medicaid coverage. Medicaid expansion is the part of Obamacare that costs the most money, and also the most popular and effective part, because it gives a lot of people pretty decent insurance.
Every GOP plan rolls back the Medicaid expansion, and in fact shrinks Medicaid to a shell of even its pre-Obamacare self. The reason is that the main goal of health care reform for many in the GOP is to eliminate Obamacare’s taxes on the wealthy — the 0.9% tax on wage income above $250k, and the 3.8% tax on investment income above $250k. Eliminating those taxes means losing a lot of revenue. In order to make the bill budget neutral (so that it can pass via reconciliation), the GOP needs the Medicaid rollback.
No amount of creative regulation of the exchanges can get around this point. The GOP wants badly to cut ACA taxes on the wealthy — without that, the whole project is not worth doing. In order to do that, they must cut Medicaid. Cutting Medicaid throws millions of people off of health insurance, which is very unpopular. Not just for moderate Republicans in the House, but even conservatives in the Senate like Tom Cotton. Therefore the bill has no chance of passing. Therefore nobody wants to stick their neck out for it. Therefore it will keep dying death after death, only to be revived by the whichever Republican desires to torture their colleagues with it.
Perhaps some day the GOP will realize that their only play is to cooperate with Democrats to make the exchanges work better. But that day is not today.
