In a statement made Monday night, Senators Mike Lee of Utah and Jerry Moran of Kansas have dropped their support of the Senate health care bill. This decision comes at a devastating time for Republicans, who have suffered countless setbacks in their attempts to pass a repeal-and-replace plan for the Affordable Care Act.
Why have these bills taken so long just to fail? In light of today’s news, our first weekly trip down the long and winding road takes us back through the last six months of health care debate. Laying out the differing proposals, why one succeeded, why most failed, and what comes next for GOP repeal-and-replace bill.
The Long and Winding Road: Trumpcare
Six months of failure with no end in sight
Since taking on the Affordable Care Act, the Republicans have struggled to find a solution they can unanimously agree to. The program has been a sticking point for Republicans since its inception. Conservative legislators question both the costs associated with the program and the care requirements made against the insurance companies — most famously, the requirement to cover birth control options. Despite their rhetoric, in the seven years since the plan was adopted no coherent bill was ever crafted.
Included with these critics is Commander-in-Chief Donald Trump, who made clear in his 2016 run that repealing the ACA would be a central part of his agenda. He too afforded no coherent plan for the repeal.
Despite a lack of alternative, he made his opinion of the ACA clear during the October 9th presidential debate in 2016:
“Obamacare is a disaster. You know it, we all know it. It’s going up at numbers that nobody’s ever seen, worldwide. It’s — nobody has ever seen numbers like this for health care. It’s only getting worse… We have to repeal it and replace it with something absolutely much less expensive. And something that works, where your plan can actually be tailored. We have to get rid of the lines around the state, artificial lines, where we stop insurance companies from coming in and competing.”
Since winning the election, President Trump has pushed the Republican-controlled Congress to move quickly on repealing the ACA. However, responding to political pressure from constituents, the president made clear in his instructions that he would not tolerate a delay in the replacement plan. In order to get support from the White House, the two would have to occur simultaneously. Unfortunately for the President, Republican leaders still could not find consensus over what to replace it with. Because of these conflicts, it was not until early March that the first repeal-and-replace plan was introduced.
The American Health Care Act: Version 1
— Paul Ryan (@SpeakerRyan) March 7, 2017
The first iteration of the American Health Care Act (AHCA) was introduced on March 6th in the House of Representatives. Amongst several other changes to the ACA, the bill would get rid of the federal mandates requiring both individuals to acquire coverage, and employers to provide coverage. Instead, allowing insurers to levy a 30% surcharge on those who let their coverage lapse for more than 63 days. However, it would only apply to those who bought individual and small group policies.
The AHCA would repeal the ACA’s taxes on corporations, and cut taxes on the wealthy by approximately $592 billion.
It would repeal Obamacare subsidies, which were tax credits based on a person’s income and cost of coverage in their area. Instead, they would provide refundable tax credits based on age and income, meaning older Americans would be afforded more money than younger. It also repealed cost-sharing subsidies; those that provide financial assistance to those who earn less than $30,000 annually. More than half of those enrolled in Obamacare benefit from these subsidies.
The bill also would change the structure of Medicaid funding, providing block grants or fixed amounts per enrollee (the per-capita cap), to states rather than basing funding on enrollment numbers. In return for these changes, the bill expanded the Health Savings Account (HSA), which encourages people to save money for healthcare expenses, and lifted the contribution cap on Flexible Spending Accounts (FSA)
Why didn’t it pass?
Before this bill even reached the floor, the AHCA already had dissenters. Predictably, Democrats opposed the bill, as did many Republican Governors who’d taken advantage of a Medicaid expansion during the Obama-era. The CBO score didn’t help either — it estimated that 24 million more people would be uninsured by 2026 under the bill.
However, the true nail in the coffin for this version of the bill came from the far-right House Freedom Caucus, who claimed this bill didn’t go far enough. Republican leadership was then forced to pull the bill from consideration on March 24th, rather than having it voted down in the House.
Why the bill failed, however, may have been as much about political factions as poor planning. The ACA took almost two years to fully complete, allowing time for expert and public commentary, critique, and careful consideration of the steps required to implement the bill. Though its flaws were many, the time spent in crafting the bill contributed to its longevity. The AHCA was put together in 2-3 months with little opportunities for consideration from experts, the public, or anyone else.
The American Health Care Act: Version 2
After a brief recess, the White House returned to their efforts to bring the far-right Freedom Caucus, and the more moderate Tuesday group, on board with the AHCA. The desire of the Freedom Caucus to remove regulations requiring coverage for folks with pre-existing conditions directly contradicted the desire of the Tuesday group, who could be facing scrutiny from their more moderate voter base.
To assuage both groups, the second version of the AHCA added the “MacArthur Amendment,” which would reinstate federal standards for health benefits, and prohibit discrimination of pre-existing conditions while adding an opt-out option for states called “The limited waiver option.”
This option would allow states to apply for waivers from either aforementioned standard. States would have to prove that the waiver was requested to:
“[R]educe premium costs, increase the number of persons with health care coverage, or advance another benefit to the public interest in the state, including the guarantee of coverage for persons with pre-existing medical conditions.”
States would also have to provide special programs, like high-risk pools, for high-cost patients. States that applied for these waivers could also be eligible for an $8 billion fund what would help defer costs for these expensive patients.
The House approved this version of the AHCA 217-213 on May 4th, before a full assessment from the CBO was released. When the assessment was released on May 24th, they estimated that the bill would leave 23 million more people uninsured than if Obamacare was left in place.
Why did it pass?
This version of the bill passed because both factions of the Republican-controlled House approved the amendments made — creating an opt-out option to appeal to the Freedom Caucus, and an extra $8 billion to appease the Tuesday group.
This win was a political one. Mounting pressure from their right-wing base and the White House meant that the passage of this bill was never truly under question. House Republicans have shorter terms and more frequent elections. House members are thus put in the position of continuously trying to maintain their elected seats, and have a vested interest in appealing to their constituents.
Ergo, if they promised to repeal-and-replace the ACA, while still fighting for their core principles, they could score a double-political win.
The Healthcare debate moves to the Senate
However, amidst the celebrations in the House for jumping this first hurdle, questions over what proposal the Senate would make was growing. Sensing a lack of support from Democrats, the bill would have to comply with special budget rules in order to pass the Senate with only 51 votes (rather than the normal 60 needed). If the bill was subject to traditional rules, it would also be open to filibuster by Democrats. By making it part of the budget, Republicans can side-step Democratic interference.
However, this also means that the bill must get at least 50 of the 52 votes from Senate Republicans, with Vice President Mike Pence casting the tiebreaker vote. In order to avoid the issues encountered by the House, Republican leadership charged 13 men with the crafting of this bill, all done behind closed doors.
More than a month out from the passage of the House bill, there was still no indication if a bill had been proposed, which began to anger Democrats and rank-and-file Republicans. Senator Claire McCaskill, a member of the Senate Finance Committee, openly criticized Republican tactics during a committee meeting.
Then came more bad news for the bill. Responding to political pressure from the public, President Trump retracted his previous praise of the House bill. During a meeting with Republican Senators on June 13th, the President referred to the bill as “mean,” and asked the Senate to be more generous in their version.
I suggest that we add more dollars to Healthcare and make it the best anywhere. ObamaCare is dead – the Republicans will do much better!
— Donald J. Trump (@realDonaldTrump) May 28, 2017
On June 22nd the Senate healthcare plan was finally presented to the full Senate, and the American public.
The Better Care Reconciliation Act: Version 1
The Better Care Reconciliation Act (BCRA) proposed by Senate Republicans is similar to the House bill, broadly. However, there are a few key differences. First, federal contributions to Medicaid would begin to decline in 2020 and phase out over the following years. This diverges from AHCA, which would cut funding fully in 2020. States could also impose a work requirement on recipients of Medicaid under BCRA.
Second, while insurance companies would still be forced to accept those with pre-existing conditions, BCRA would allow states to ask permission to reduce those levels of care, opting out of certain “essential health benefits,” thus giving insurers more discretion over what they offer. This would mean that if your state decided to opt-out of providing coverage for mental health or birth control, finding a plan that offered coverage could be substantially more expensive.
Why didn’t it pass?
Much like the House bill, there was a great deal of scrutiny on the bill from the beginning. Four Conservative Senators — Rand Paul, Ted Cruz, Mike Lee, and Ron Johnson — publicly stated that they would vote down the bill without changes made. The CBO score predicted that this version of BCRA would lead to 22 million more Americans uninsured by 2026.
Desperate to get the bill passed in July, Senate Leader Mitch McConnell postponed the vote, and instead attempted to revise the bill and have it re-sent to the CBO by June 30th. McConnell was unable to get the votes necessary to pass the bill, and thus the vote was again postponed — and the August recess pushed back — to ensure a timely vote on BCRA.
The Better Care Reconciliation Act: Version 2
The revised version of the bill was established just a few days ago on July 13th. This update includes an amendment established to court more conservative Senators. The Cruz Amendment, named after its creator, would allow for the establishment of catastrophic care plans, so long as carriers provided plans that offered “essential health benefits” and would let individuals use their HSA plans to pay premiums. This effectively eliminates protections for those with pre-existing conditions, as the system may force them to spend significantly more on plans to cover them.
The new plan does keep some of the ACA’s taxes on the wealthy intact. However, it would make the use of FSAs to pay premiums tax-advantaged, thus providing an added benefit for the wealthy who can afford to set funds aside.
Where do we go from here?
Congress must now return to reg order & listen to govs on bill to provide access to quality, affordable healthcare https://t.co/kMdW7fqOQz
— John McCain (@SenJohnMcCain) July 18, 2017
With the blow struck by Senators publicly stating that they will not support the bill, moving forward seems impossible. The options moving forward are narrow. Republicans will be forced to either re-write the bill in a manner that would sway deserters back to their side or negotiate a deal with Democrats – both of which are rather unappealing.
One thing, however, is clear. This is another false move in a long-line of set backs that have faced the Trump Administration. The key question this week will revolve around whether or not the administration continues to throw their weight behind passing the repeal-and-replace, or if they’ll move on to other Trump Administration promises – such as tax reform, immigration, and trade policy. We’ll be keeping an eye on the health care bill as it continues its progress in the Senate.
We’ll be keeping an eye on healthcare, and all of Trump’s other policies as they develop. Stay engaged with X-Ray in the Morning!
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