After a protracted battle with politics, Obamacare repeal died swiftly last night due to a policy complication stemming from an issue related to insurance market design. Although supporters had high hopes for the bill, in reality it may never have had a chance. In its life and in its death, it was a testament to Republican incoherence about health care.
The repeal plan, which close associates knew was never really full repeal, began life as a Republican campaign mantra—repeal and replace—which was uttered and promised by nearly every GOP politician for seven years, since the passage of Obamacare in 2010.
It was always more of a slogan than an actual plan: As early as 2011, Republicans promised that a replacement could be expected in short order, but a real candidate never arrived. It wasn't that Republicans and conservative health policy scholars never developed any alternatives. There were op-eds and white papers and even a full-fledged draft of legislation or two. But there was never any consensus on any of these options.
And, more importantly, the party could never settle on any clear systemic goals for health policy. It wasn't like not being able to pick a design for a house. It was more like not knowing whether you want to build a house or a boat or a tractor. The most basic elements of a health care plan were always up in the air.
So when Republicans won control of both chambers of Congress and the White House last year, they were caught unprepared. They admitted as much. "I didn't expect Donald Trump to win, I think most of my colleagues didn't, so we didn't expect to be in this situation," Sen. Pat Toomey said earlier this month, when asked why the health care bill had stalled.
The first version of the bill, the American Health Care Act (AHCA), faced significant reluctance from Republican lawmakers. In March, Speaker of the House Paul Ryan, who had enthusiastically backed the bill, pulled from a floor vote in dramatic fashion, and many assumed that was it was dead. Conservatives, in particular, worried that it was too like Obamacare—a repeal that was really more of a rewrite, perhaps in ways that exacerbated the problems they saw with the existing law. In May, a revised version passed on the slimmest of margins, after much arm-twisting from President Trump.
But even Trump, whose grasp of the health legislation has always been limited, didn't seem too enamored with the bill he urged wary Republicans to pass. Later, he called the bill "mean."
So it was left to the Senate to draw up a plan. The upper chamber initially promised to start fresh, but after weeks of secret meetings the legislation that was released looked a lot like the House bill—except even more like Obamacare. Conservatives senators like Rand Paul and Mike Lee weren't happy with the bill's resemblance to the law it was supposed to replace. Moderates, meanwhile, had concerns of their own, mostly about the rollback of Obamacare's Medicaid expansion. The public wasn't thrilled either; one analysis found that the bill, with 28 percent support, was the most unpopular major legislation in 30 years.
Senate Majority Leader Mitch McConnell tried to address all of these concerns. He revised the bill further to leave some of Obamacare's major taxes in place. He started whispering to moderates that they shouldn't worry about the Medicaid rollback, because it was delayed and would never happen. And, crucially, he included a provision backed by Texas Sen. Ted Cruz that would allow insurers to sell plans that did not comply with Obamacare's regulations, provided they also sold compliant plans. This would have segmented the market, creating cheap plans for healthy people and subsidized and regulated plans for the sick—turning Obamacare into a de facto high risk pool.
But McConnell, under pressure from moderates, altered the Cruz amendment in an obscure and unexpectedly important way: He included a provision required both the Obamacare plans and the non-compliant plans to be in a single risk pool. In other words, it would require an actuarial link between the expensive, regulated plans and the cheap, less comprehensive plans.
After the plan was released, no one was really sure how, or if, the idea would work. Insurance companies said that it simply wouldn't. Actuaries warned that it would destabilize the market. Conservative and libertarian wonks warned that it would raise prices for everyone. Some raised concerns that linking the two types of plans would cause both markets to crash together.
The confusion over the single risk pool was the Republican confusion over health care in distilled form: Conservatives proposed an idea intended to loosen the grip of insurance regulations, but that might have ended up more expensive in the long run. Leadership used that idea, but modified it in a way intended to appease moderates. That modification would have made the provision work at cross-purposes to its original intent, or maybe not at all. It was a compromise that ended up providing nothing for anyone.
And in the end, it was what killed the bill. "The new version still forces insurance companies to follow Obamacare's 'single pool' regulation," Sen. Mike Lee, who had said that the previous iteration was the price of his support, wrote last night, noting that the altered version would cause premiums to rise.
The disagreement over the single pools regulation may seem wonky or obscure, but it represents the whole of GOP disagreement over health care in miniature. Moderates want one thing; conservatives want another; leadership just wants to pass something and doesn't care much what it is—and the result is legislation that doesn't make any sense, as policy or as politics.
Even in defeat, that appears to be the GOP strategy: McConnell has said he plans to resurrect a 2015 bill that garnered a majority of Senate Republicans under President Obama. That bill is being described as a clean repeal, with no replace, but it is almost the exact opposite of a compromise: As a result of Senate procedural requirements, it leaves in place the Obamacare insurance regulations that conservative Republicans oppose, while rolling back the Medicaid expansion that moderates want to preserve even faster than the original Senate bill. (Months ago, Republicans passed on using the 2015 bill as a vehicle because, as one aide said, "We're not dumb.") It is possible though unlikely that this bill will pass. But in any case, it is, as always, a compromise that isn't a compromise.
The GOP health care plan passed from this world on a technicality, but it was afflicted by something deeper—a fundamental lack of vision. It was never more than a hollow campaign promise that many Republicans never really had a plan to execute, and in the end it died as it lived, in confusion and poor repute. R.I.P.
Update: The plan to vote on the 2015 repeal bill now faces three no votes, making it effectively dead. All of the firm objections so far come from moderate Republicans: Susan Collins, Shelley Moore Capito, and Lisa Murkowski.