After months of confusion and secrecy, House Republicans have finally revealed their Obamacare repeal legislation. While it's useful to have House Republicans on the record with a legislative plan, the plan doesn't offer any estimate for how much it would cost, or how many people it would (or wouldn't) cover. In general, it's not clear what problems this particular bill would actually solve.
The bill would replace Obamacare's subsidies with a system of tax credits and halt the law's Medicaid expansion at the end of the decade while grandfathering in many beneficiaries over the long term and giving states $100 billion in funding to work with to care for hard case patients. All in all, it's a fairly conventional Republican plan, modified in ways designed to mitigate recent political objections.
The tax credit is, for the moment, the most controversial component of the legislation. As in previous drafts of the bill, the credits are refundable, meaning that individuals will be eligible for them even if their total tax liability is lower than the amount of the credit. The federal government would pay people, even if their federal tax bill was zero. It's a subsidy, basically, rather like the one in Obamacare. Conservative legislators have argued that such a system would be little more than Obamacare lite. Sen. Rand Paul (R-Kentucky) has complained that any refundable credit is tantamount to "a new entitlement program."
Unlike Obamacare, which bases its credits on income, the GOP bills we've seen so far are based on age. That creates another set of political headaches, because it means that wealthier folks get tax credits, and because it means that older people would get less help than under Obamacare, in hopes of creating a scheme that lures more young and health people into the system.
The bill released tonight attempts to mitigate these problems by capping the refundable credit so that households earning more than $150,000 would be reduced, and individuals making more than $215,000 would get nothing at all. But that still leaves a credit that is refundable for most people, and adds a bit of additional administrative work: Under Obamacare, judging an individual's employment and income has proven more than a little difficult, and the same would continue to be true here.
So Republicans would be replacing one set of insurance subsidies with another set of insurance subsidies, while killing the individual mandate but leaving many of the law's insurance regulations intact (with a penalty for insurance gaps). There's a reason that legislators like Michigan Rep. Justin Amash are already referring to it as "Obamacare 2.0."
Obamacare 2.0 https://t.co/p0zKkMD3UT
— Justin Amash (@justinamash) March 6, 2017
On the other hand, the bill would probably result in the disruption of current health insurance for millions (although it's hard to say with confidence how many, for reasons I'll explain in a moment), and we don't yet have an estimate as to what effect it would have on the budget.
Beyond that, the bill would provide a hefty payment to states, about $100 billion over 10 years, for states to use to fund safety nets of their own design. And then there's the bill's Medicaid rollback, another awkward balancing act. It keeps the state-level optionality granted by the Supreme Court in 2012, and allows states to keep the law's expanded funding for Medicaid beneficiaries up through the end of 2019, and for those who maintain continuous coverage after. So the enhanced Medicaid matching funds provided by Obamacare would dwindle away over time. This is as much a political compromise as an actual policy measure. Will it appease the four Republican Senators who pledged today to oppose the repeal of the law's Medicaid expansion? No one knows.
Indeed, there's an awful lot we still don't know about the bill, in part because Republicans have rolled it out in such a way as to prevent clear analysis.
With any major health care policy reform, the big questions are: How much will it cost? And how many people will it cover, and in what manner? Typically these questions are answered by the Congressional Budget Office (CBO), which provides the official estimates, and perhaps supplemented by outside organizations with various rooting interests.
But there's no CBO score of the Republican bill. And reports indicate that Republicans intend to proceed moving the bill through the committee process without any CBO score to guide them. That means that neither the public nor congressional legislators will have any real idea of what the likely effects of the bill are even as they are debating its merits.
Of course the CBO has been wrong before—in particular about health care. And of course there are reasonable issues with the CBO process, which is built to produce authoritative single point estimates rather than ranges that might better express the level of uncertainty in the estimates.
But the CBO does serve one incredibly valuable function, which is to provide an official estimate for the budgetary effects of a law, and (more or less) force everyone to stick with it, or at least make a clear argument as to why they aren't.
We don't have that here, and the result is that even though the bill is now public after a period of unusual secrecy—members of the House were allowed to read it only in a tightly controlled setting last week, while Senators were prohibited from looking at it—there's a lot we still don't know about how it is likely to work.
More broadly, it's not clear what constituency this bill is designed to satisfy, aside from Republican congressional leadership. It doesn't go far enough for conservatives, but may not be generous enough to appease more moderate Republicans either. (Democrats are, at this point, virtually certain to uniformly oppose the bill.) It's a muddled version of the House GOP plan, which was itself a muddled vision of what a political compromise might look like, in some hypothetical world where Republicans actually agreed about health policy.
The GOP's real problem, in terms of passing legislation, isn't that the party can't agree on specifics, or that legislators need to bargain their way toward a compromise that gives everyone something they want. It's that they don't agree on, or in some cases even have, basic goals when it comes to health policy. This bill, and the aura of secrecy surrounding it, seems more like a wish and a hope that this essential problem goes away rather than an attempt to truly solve it.
So what we have at this point is a bill, but not a lot of context. It's a start, and it's better than nothing. But it's not enough.