The Politics of the American Health Care Act

Earlier this week, House GOP leadership released their replacement for the Affordable Care Act: The American Health Care Act.  While simplicity is bliss in a name the plan is anything but simple and includes tough trade-offs.  Trade-offs that could doom the plan in the end.

So, first-off, let’s look at what is in the plan.  To the annoyance of many conservatives it keeps the current Medicaid Expansion until 2019 and even then only changes the funding formula for Medicaid (it does not shrink it).  The plan offers refundable tax credits to all Americans who do not receive employee sponsored coverage based on age and income.  Still, critics have noted the $4,000 credit for older Americans likely will not cover as much as the ACA’s subsidies for poorer Americans.

Additionally, the AHCA eliminates the individual mandate and replaces it with a 30 percent surcharge on individuals who apply for insurance after not having it for a minimum of 63 days.  Further, the Cadillac tax, delayed until 2020 under the ACA, is eliminated.  The AHCA does keep the preexisting conditions mandate under the ACA and allows kids to stay on their parents plans up to the age of 26.

On the surface the plan looks like a political winner.  It keeps a federal presence in healthcare, does not eliminate Medicaid leaving the poor in the cold and promotes consumer choice via tax credits.  However, as opposition has shown, healthcare brings many opposing factions together.  So far, we have seen four of them with many more likely to pop up.

  1. Senate Conservatives: Senate Conservatives Rand Paul and Mike Lee have denounced the GOP plan.  Rand Paul supports a clean repeal before replacement while Lee’s views are a little less well known but he opposes keeping Medicaid Expansion and worries the new tax credit would become a new entitlement.
  2. Senate Moderates and GOP Governors: On the other side of the ideological spectrum are four GOP Senators, Sen. Cory Gardner (R – OH), Rob Portman of (R – OH), Shelley Moore Capito (R – W.V.) and Lisa Murkowski (R – AK), and many GOP Governors who worry that the poorest Americans will suffer.  More importantly, GOP Governors worry the Medicaid provision will blow massive holes in their state budgets.  Obviously, when the law was being crafted, this concern was why Medicaid Expansion was kept as part of the plan.
  3. Democrats: The least surprising of any Congressional element, few if any Democrats are sure to support this law.  Even Democrats up for election in Trump states and districts next year will probably gamble they can win reelection by making the law unpopular.
  4. House Freedom Caucus: There are four vacancies in the House meaning the magic number to passing the AHCA is 216.  Thus, Republicans can afford to lose 21 votes and still pass the bill without any Democratic support.  The main opposition from within their own party is likely to come from the 30+ member Freedom Caucus.  The Caucus has been openly critical of the bill and is likely to impede its passage at the very least by offering amendments.  The one question mark with this group is Trump.  Many of these member’s districts strongly backed Trump and the President came out firmly in favor of the law.  If they push their opposition to far they could face populist challenges from the right.
  5. The American Public and Interest Groups: Yesterday, several major groups representing physicians, hospitals, insurers and seniors came out against the AHCA.  Most notably, the AARP, American Medical Association and American Hospital Association came out against ending the Individual Mandate and the proposed changes to Medicaid.  Insurance companies contend they were locked out of drafting the bill.  Among the general public, viewpoints are unclear.  But elements of the plan are likely to be popular and others not (just like in the ACA).  Either way, Republicans will need to sell the plan better than Obama and Democrats sold the ACA.

Needless to say, the politics of healthcare is complicated and fraught with landmines.  Despite campaigning for repeal for the last six years, Republicans are learning the politics of opposition are easier than governing.  The party’s saving grace might be Trump.

While Trump might not be personally popular he does seem to have the ability to sell certain products and ideas as evidenced by the campaign and recent meetings with business leaders.  Considering this, Republicans should utilize him.

Of course, the politics of one-sixth of our economy is hardly certain.  Plus, this is Trump we are talking about.  House GOP leaders have made clear this is a take it or leave package and it is unclear how Trump’s dealmaking tendencies may react.  Likewise, in the Senate, changes likely will be made that could make it more or less conservative.  How does House leadership react then?

Further, the CBO is expected to score the bill next week.  If it blows up the deficit or cuts millions from insurance rolls does leadership still try to push it through?  Or do they back off and enrage conservatives and activists who at a bare minimum want the law replaced?

I guess we’ll see!

https://www.washingtonpost.com/powerpost/doctors-hospitals-and-insurers-oppose-republican-health-plan/2017/03/08/d9f0f5c2-0426-11e7-ad5b-d22680e18d10_story.html?utm_term=.f064f74d5ee8

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