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Paul Ryan’s Triumph

He struck a delicate balance in the House. But does the Senate have a different center of gravity?
Ryan Triumphant

Well, they pulled it off. House Republicans, who occupy 238 of their chamber’s seats, managed to eke out a 217–213 majority for the Obamacare repeal they’ve been promising for years.

In all seriousness, this is a triumph for Paul Ryan & Co. Because the original version of the American Health Care Act failed with conservatives and moderates alike, the leadership had to move the legislation to the left and right simultaneously. It was no small feat to assemble just the right combination of amendments, a mix that allows states to aggressively roll back sacrosanct Obamacare regulations but also requires those states to take steps to help the uninsured.

But now that the confetti has settled, I’ll ask two impertinent questions. Given that the Senate won’t even use the House bill as a starting point—though it will incorporate elements of the AHCA as it sees fit—how good are the chances that the two chambers will eventually see eye to eye? And given that the American public would like to see universal health coverage, a goal Trump has claimed to support as well, can the AHCA be any more popular than Obamacare has been?

Let’s start with a quick overview of what the AHCA does. Here’s what remains unchanged since it flopped in March: It eliminates the individual mandate, but those who go without insurance will have to pay a 30 percent surcharge for a year if they decide to sign up later. It eliminates Obamacare taxes that targeted the wealthy. It allows insurers to charge the oldest enrollees five times what they charge the young, instead of three times as under Obamacare. Instead of giving tax credits that vary dramatically with income to ensure everyone can afford coverage, it provides flatter credits that rise with age and gently phase out at high incomes. And it eliminates the Medicaid expansion and puts the entire program on a per-capita budget. (Medicaid is currently an open-ended guarantee by the federal government; if a state spends more, it gets more federal funding.)

According to the Congressional Budget Office, those provisions would increase the number of uninsured Americans by 24 million in 2026. On the plus side, they would also reduce the deficit $150 billion by the same year.

That score was published before the new amendments giving states waivers from major Obamacare regulations, though, and it’s not entirely clear how those changes will affect the numbers. (We’ll have a new score before the Senate votes on anything.) But since most of the original bill is untouched, it’s likely that there are still enormous coverage losses, at least according to the CBO’s methodology. And as the Committee for a Responsible Federal Budget explains, if the amendments do increase coverage somewhat—for example, if states get waivers and use them to offer super-cheap plans to the young and healthy—the tax credits these people use will eat away at the previous version’s deficit savings. In fact, if coverage goes up 6.5 million or more relative to the previous version, all the deficit reduction will be wiped out.

So back to those questions. Even aside from the simple fact of coverage losses, liberals have several lines of attack that could resonate with the public, and with Senate moderates trying to decide how much of the House bill they can include in their own legislation. If more than two GOP senators refuse to back the effort, it dies, because Republicans are starting with just 52 votes.

Take preexisting conditions, the subject of much discussion this week. The amendments dealing with this issue are not as bad as some make them out to be, but they do raise serious policy questions. Basically, if they wanted to, states could lift Obamacare’s ban against charging sick people more for insurance—though this would apply only to customers who had not maintained continuous coverage, a situation that would be easier to avoid than it was before Obamacare, thanks to the AHCA’s tax credits. Further, states that went this route would have to take measures to help those at risk of being uninsured. They would have several options, the most hyped of which are called “high-risk pools.”

The problem is that many states had high-risk pools before Obamacare, and they didn’t work very well. As the name implies, the idea is to take all the sickest uninsured people and put them in a separate pool so they don’t drive up premiums for everyone else—but this is an incredibly expensive pool that requires substantial government subsidies. States that operated these pools usually underfunded them, offering plans with unaffordable premiums, poor coverage, and sometimes even waiting lists. Health-care experts across the spectrum say the federal funding in the GOP bill, despite an increase won by the party’s moderates, is probably not enough to solve this problem. The ultimate fear is that some states could end up where they were before Obamacare, when there were perhaps a few million sick Americans who couldn’t get coverage.

Medicaid will also prove fruitful for those trying to sink the bill. All the way back in March, four GOP senators objected to the way the House bill treats the program. Don’t forget that a lot of red states chose to expand Medicaid even after the Supreme Court said they didn’t have to.

The structure of the tax credits also bothers some moderates. While older people can be charged five times as much, their credits are worth only twice as much. And because the AHCA’s credits vary less with income than Obamacare’s do, they do less to help the poor.

Still another line of attack comes from a Thursday morning Wall Street Journal story. According to the report, thanks to some obscure legal quirks, the AHCA could allow employer plans to enforce annual and lifetime coverage limits that were banned under Obamacare. It’s unlikely that many employers would want to do this, and Republicans say it stems from a misreading of the law and in any case could be fixed through executive regulations. But at the very least, the pure politics of a threat to employer plans is not good.

A few other odds and ends regarding the Senate: Some moderate Republicans object to the fact that the bill defunds Planned Parenthood. And in order to pass the bill with 50 votes, instead of stopping a filibuster with 60, the Senate will use the “budget reconciliation” process, which limits what can be included in the bill. If the Senate parliamentarian decides that key elements of the legislation aren’t directly budget-related, Republicans will have to either remove those elements or take the dramatic step of overriding the parliamentarian. Finally, while moderates will probably be the biggest threat, Freedom Caucus-style conservatives in the Senate, such as Ted Cruz, could refuse to back the bill if it drifts too far left.

The consensus—among observers and among senators themselves—is that whatever the Senate ends up with will not look very much like what the House just passed. This could put both houses in a very difficult place. If the House struck a delicate balance to get to a 217–213 vote, and the Senate has to strike a completely different balance to get to, say, 51–49 (or even 50–50 with the vice president breaking the tie), there may be no policy mix acceptable to both unless legislators start caving on issues they care about.

Or as Rep. David Brat (R-Va.) asked the Washington Post, “Have you been watching for the last few months how tight this is, and you’re going to shift this one [way] or the other? … Good luck, you don’t have to be Einstein to game theory that one.”

Robert VerBruggen is managing editor of The American Conservative.



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