Donald Trump is forcing a vote on a hastily and sloppily rewritten health care bill that was already a mess—and was just made even worse.
Here's how things stand: Yesterday afternoon, GOP leadership announced that the full House vote on the bill that had been scheduled would be postponed for at least a day. The delay was a sign that despite days of intense negotiation with multiple factions opposed to the bill, leadership still didn't have enough votes to cross the finish line.
Late last night, President Trump, through his staff, delivered the message that he was through negotiating and would demand a vote on Friday, with no more changes. House leadership released the final amendment to the bill, which contained some changes that were, at least in theory, designed to win over members of the Freedom Caucus, the conservative faction that has been the locus of opposition to bill. A vote is expected sometime today.
The final update to the bill is a mess that wouldn't accomplish the Freedom Caucus' goals—but would likely cause confusion and quickly throw insurance markets into chaos.
The main thing the update would supposedly do is shift authority over Obamacare's essential health benefits (EHBs) to the states. In theory, this is designed to reduce federal mandates and give states more flexibility. But as Nicholas Bagley of the University of Michigan Law School points out, the updated rule might not actually give states any additional authority to set their own rules. The federal government would still be required to define essential health benefits under the major categories already included in Obamacare. And the way the new language is written, it could plausibly be interpreted to require states to write benefit requirements that comply with the federal government's EHB rules.
There's another big problem with the EHB rules: They would be susceptible to charges the federal government is strong-arming states. The new rules would encourage states to write their own rules by denying them access to premium subsidies if they don't. This might open the provision to legal challenge, along the lines of King v. Burwell, which challenged the decision under Obamacare to dole out premium subsidies to states that had not set up their own exchanges as called for by the law.
And states wouldn't have a lot of time to write the rules—which could create its own set of problems. The new rules would go into effect on January 1 of 2018, leaving states with just a few months to draft their benefit requirements. Drafting rules like this takes time, and is often contentious, more in some states than others, and it's possible that even states that moved swiftly would not have settled on rules until near the end of 2017.
The problem with that timeline is that health insurers are putting together their plans and rates for 2018 right now, and most will be finalized by the summer. But they can't put together plans and rates if they don't know what they would have to include in their plans. As Bagley notes, it is at least within the realm of possibility that insurers, many of whom are already losing money in Obamacare's exchanges already, could simply refuse to offer plans of any kind at all. "They don't know which services their states will say are essential and they don't have time to wait around while their states bicker about it. Insurers are likely to walk. All of them. The individual market in 2018 will be a ghost town."
In other words, rather than reducing health insurance premiums and increasing access to care, as Freedom Caucus members say they hope, the new rule could lead to the complete and immediate meltdown of the entire individual market. These are the sorts of problems that emerge when passing legislation becomes a purely political goal, rather than a policy objective, and when the effort is led in part by someone, in this case President Trump, who appears to have no idea what is in the bill or how it works.
The new essential health benefits rules aren't the only changes in last night's update. The new version of the Republican health care plan also adds $15 billion in new spending to a state-based fund to cover provisions that the EHB rule is designed to eliminate—a roundabout way of putting the cost of that coverage on taxpayers, while trying to eliminate it from plans.
The updated version of the bill also delays the elimination of Obamacare's Additional Medicare Tax, a surtax on high earners, until 2022. So relative to previous iterations, would result in higher taxes.
The initial bill was awkwardly constructed on its own, a hodgepodge of disconnected policy ideas that relied on a system of tax-based subsidies and regulations that mirrored the essential structure of Obamacare in ways that, if anything, made even less sense than the health law the AHCA was supposed to replace. Health policy experts and high profile activist groups on the right loudly opposed it, and Republicans in Congress, especially those in the Freedom Caucus, expressed reservations as well.
Since then, the bill has been altered in hopes of winning over dissenters. But the subsequent changes have done nothing to alter the underlying structure of the bill. The first update reduced its positive impact on the deficit. And the latest round of changes includes more taxes, the earmarking of spending designated to cover specific benefits, and a poorly drafted provision that may not actually reduce insurance mandates, but would probably blow up the individual market within a year. (In this context, it is hardly surprising GOP leadership has sought to rush the bill through to passage and avoided defending its merits.)
In any case, this is the legislative vehicle they have decided to stick with. It's President Trump's final offer, and what the House will be voting on today: a poorly constructed bill that has only been made more dysfunctional over time.