Inside Story

Current affairs & culture from Australia and beyond

2224 words

Republicans versus voters as healthcare bill founders

2 July 2017

Lacking popular support or the endorsement of even a single state, the push for the Republican healthcare bill seems detached from reality


Senate majority leader Mitch McConnell in the grounds of the White House following a meeting to discuss healthcare legislation with Senate Republicans and president Donald Trump on 27 June. Michael Reynolds/EPA

Senate majority leader Mitch McConnell in the grounds of the White House following a meeting to discuss healthcare legislation with Senate Republicans and president Donald Trump on 27 June. Michael Reynolds/EPA

Republicans’ efforts to deliver on their longstanding commitment to repeal and replace Obamacare were derailed last week when Senate majority leader Mitch McConnell, facing a divided party room and lacking the necessary support, was forced to delay a vote on the Senate bill.

The so-called Better Care Reconciliation Act, or BCRA, faces the same problems as its counterpart, the American Health Care Act, encountered in the House of Representatives. Conservatives (who want a complete repeal of the Affordable Care Act and a reliance on marketplace solutions) and moderates (who are concerned that people don’t lose health insurance coverage) are wrestling for dominance amid growing levels of public concern about the proposed changes.

Under McConnell’s leadership, the Senate bill was developed in secret by a small, select group without input from the Republican caucus or outside experts, and certainly with no Democrat consultation. The high-handed plan was to spring the results on the Senate for a quick vote without any scrutiny.

The plan was undone with the release of an analysis of the bill by the non-partisan Congressional Budget Office, which showed that twenty-two million Americans would lose insurance coverage under the plan and that premiums and out-of-pocket costs for many of those buying policies on Obamacare’s insurance exchanges would rise dramatically. Overall the bill is as punitive as this year’s American Health Care Act and saves only $200 billion more.

At least nine Republican senators have indicated that they will not vote for the current version of the BCRA. With fifty-one votes needed under the reconciliation provisions, McConnell can only afford to lose two votes; facing revolt and defeat, he was left with no option but to postpone bringing the bill to a vote until after the 4 July recess.

In the meantime, Republican senators, returning to their home states for the Independence Day celebrations, must show up at clambakes, barbecues, fried-chicken feasts and face-to-face encounters with their constituents who are worried they will lose their current healthcare benefits. The situation is made increasingly more difficult and complicated by pronouncements from president Donald Trump, their inconsistent and disruptive leader.

In January, Trump insisted on a simultaneous repeal and replace approach; in May he celebrated the passage of the House bill and on June he condemned it as mean; he has said of the Senate bill “we’re talking about a great, great form of healthcare” and mysteriously promised “a great, great surprise”; and then conceded that “this will be great if we get it done. And if we don’t get it done, it’s just going to be something that we’re not going to like. And that’s okay.” Now Trump has tossed in a new complication – he has back-pedalled on his previous stance and suggested repealing now and replacing later.

The president is clearly ignorant of the provisions in the Senate bill and of the required procedures for bringing it to a vote. Several senators who have spoken with Trump about the evolving legislation describe him as having “little apparent understanding of the basic principles of the reforms and virtually no understanding of the details.” Others who attended a White House meeting called after McConnell announced the bill would not come up for a vote before 4 July “saw a president unable to grasp policy details or the obstacles ahead.”

Although Trump is obviously willing to overturn a series of previous commitments on healthcare in order to claim some sort of victory, he is in no position to negotiate the needed compromises or even to lobby those senators who don’t support the current bill. He and his Republican colleagues are also entirely disregarding voters’ opinions on the issues.

The Senate bill perpetuates and reinforces the political ideologies of the House bill. This is not legislation that aims to deliver improved health care to America, and indeed it eschews most of the ideas on this subject put forward by conservative policy-makers and think tanks. Instead, it is a bill with three goals: dismantling the key provisions of Obama’s legacy; undermining Medicaid, which is viewed as a form of undeserved welfare, and even as thievery from taxpayers; and delivering tax breaks to the wealthiest Americans at the expense of the healthcare needs of the poorest.

The BCRA cuts Medicaid by $772 billion over ten years (slightly less than the House bill but with even deeper cuts beyond 2026), rolls back federal funding for expanded Medicaid eligibility, and both caps and radically restructures the way in which federal funds are provided to the states for Medicaid. States will be required to determine adults’ eligibility for Medicaid at least every six months, increasing the possibility of coverage gaps.

The bill also eliminates $408 billion in health insurance subsidies for those on low incomes. As a result, those who buy insurance on the Obamacare exchanges – people without coverage from an employer or from Medicaid – will pay far more for far worse coverage, especially if they are fifty or older. The standard reference plan on the exchanges would cost thousands of dollars more and have an average deductible of more than $6000.

The value of all insurance will be undermined by the removal of the requirements that it cover a set of essential benefits (covering services for mental health and substance abuse, maternity care, cancer treatment and prescription drugs). This will mean increased out-of-pocket costs on top of premiums and deductibles.

As a result, says the Congressional Budget Office, some fifteen million people currently on Medicaid will lose that cover by 2026, as will four million people with employer-provided insurance, and fewer people will be able to afford to purchase their own insurance on the exchanges. Hardest hit would be lower-income people between the ages of fifty and sixty-four, especially those with chronic health issues, mental health disorders and addiction problems. These are the many of the same people who voted for Trump, believing that he would improve their lives and their affordable access to healthcare.

On the other hand, the BCRA will give substantial tax benefits to large corporations and very rich individuals by rolling back $550 billion in taxes imposed by Obamacare. Effectively, the Senate bill would take $1 trillion away from health coverage for the bottom half of the population to give significant tax cuts to the top 2 per cent. Tax cuts would average $45,000 for those making $875,000 a year and $250,000 for those making $5 million. This has been rightly described by Warren Buffet as a “Relief for the Rich” program.

Congressional Republicans are engaging in tortured logic, convoluted language and outright dissembling to defend their seemingly unsupportable proposals. A favoured talking point is that the number of people with health insurance is a bogus metric, and that it is access to healthcare that counts. The continuation of this line of argument is that everyone has the opportunity to buy healthcare or to access it at no direct cost through emergency care and that failure to do so is simply a matter of choice.

Responding to the Congressional Budget Office’s estimates that millions of people would lose health insurance, House Speaker Paul Ryan has said, “So it’s not that people are getting pushed off a plan. It’s that people will choose not to buy something they don’t like or want.” This ignores the fact that if this legislation were enacted some people would need to spend a major part of their income on health insurance and health care. It also flies in the face of evidence that health insurance coverage, including that provided by Medicaid, improves health outcomes.

On the specifics, Republicans claim that their proposal will lower the price of the average health plan. It is true that the average premium will decrease by 20 per cent, but this single data point obscures the fact that their less generous subsidies actually increase the costs for all but a minority (mostly younger, healthier people).

Republicans, including Tom Price, the health and human services secretary, insist that eviscerating Medicaid funding by 25 per cent does not amount to a cut because nominal funding for the program would still increase over time. They have also said any resulting shortfalls would not affect beneficiaries while claiming that those who do lose their Medicaid coverage could find work and get employer-sponsored benefits.

The conservative attitudes to Medicaid – both harsh and cavalier – fail to recognise that Medicaid is an immensely popular program that is working well and covers many of the nation’s sickest and most vulnerable people. This includes 60 per cent of disabled children, 6.9 million disabled adults, half of all pregnant women and two-thirds of nursing home residents, many of whom were once middle class but who end up relying on Medicaid coverage after their savings are exhausted. A plurality of Medicaid recipients is white, and among adult Medicaid recipients (most of whom gained coverage under Obamacare), 60 per cent work, and 80 per cent are part of working families. Many of this last group are people who live in so-called red states and who voted for Trump.

Cutting back on Medicaid will mean financial problems for nursing homes, clinics, and hospitals, more medical debts, more untreated illness and more unnecessary deaths. It is estimated that the loss of coverage by twenty-two million people would cost as many as 92,000 lives a year by 2026 under the Senate bill.

State governors are well aware of what this would mean for their budgets. A group of governors led by a pair of low-key moderates, Republican governor John Kasich of Ohio and Democrat governor John Hickenlooper of Colorado, have mounted a concerted attack on the Senate bill. The fact that no state has come out in support of the legislation has made life extremely difficult for senators.

What is making Republican legislators even more nervous is the response from their constituents. Voters are now paying keen attention to healthcare reform efforts and seeing the issues through their own experiences, not through the fearmongering and falsehoods emanating from the White House and the Congress.

Americans who once reviled Obamacare are appreciative of the benefits they are getting and fearful of losing them: a June poll shows 51 per cent now view Obamacare favourably. Trump and Republicans have claimed that Obamacare is in a “death spiral,” and have done their best to disrupt the functioning of the insurance exchanges, but the fact is that, although imperfect, Obamacare is functioning well and making a real difference to health costs and outcomes.

Recent polls show that Americans are even more disapproving of the Senate health care plan than the House version. One poll shows only 17 per cent of Americans approve of the Senate bill; another found only 12 per cent. A majority of voters say that Congress should either leave Obamacare alone or work to fix its problems while keeping its framework intact. A third poll found approval of the Senate bill was only 37 per cent among Republican voters and that 71 per cent of voters, including 53 per cent of Republicans, oppose decreasing federal funding for Medicaid. Voters surveyed also say that what happens on Obamacare repeal and replace will affect how they vote in the 2018 mid-term elections.

Small wonder then that there is a panicked effort from the Republican leadership to unite the warring factions. McConnell is wily and ruthless and he will be looking to buy votes, but he has a difficult task ahead. His first offer of $45 billion for states to spend on opioid addiction treatment has been dismissed as drastically short of what is needed.

Remarkably, there has been some discussion of leaving in place the taxes that Obamacare imposed on the investment income of the most affluent Americans. This move would only satisfy the moderates like Senator Susan Collins from Maine if these funds were used to increase insurance subsidies for lower-income groups and would infuriate further ultra-conservatives like senators Ted Cruz and Rand Paul.

It is ironic that the biggest threat McConnell could produce to bring his caucus into line is that he might have to work with the Senate Democrats. “Either Republicans will agree and change the status quo or... we’ll have to sit down with [Democratic Leader Chuck] Schumer,” he said. 

It has been postulated that McConnell, who represents Kentucky, a state that has experienced one of the biggest reductions in the rate of uninsured people – mostly because of gains in Medicaid coverage – may not wish to succeed in this effort and go down in history as the architect of health insurance loss. Regardless of motives, the wisest course with the best long-term legacy for Republicans would be to give up this increasingly desperate quest to kill off Obama’s legacy. Large numbers of Americans want to see Obamacare retained and improved; Republicans, in a bipartisan effort with Democrats, should now simply get on with the task of doing just that. President Trump can be assuaged by simply rebadging the reforms as Trumpcare. •

Read next

676 words

An influential educator

1 July 2017

A tribute to the influential educationalist and Inside Story contributor Bernie Shepherd


Understated and precise: Bernie Shepherd speaking at an Australian Education Union council meeting in 2014. Tom Greenwell

Understated and precise: Bernie Shepherd speaking at an Australian Education Union council meeting in 2014. Tom Greenwell