September 01 , 2017
Obamacare Survives
In a stunning victory for Democrats and for President Obama’s legacy, the Affordable Care Act (aka Obamacare) remained standing despite the full Republican control of the White House, House of Representatives, and Senate. This was a surprising outcome to many, who assumed that the GOP would finally gut Obamacare as they had promised for the last seven years.
President Trump had in fact run on repealing Obamacare, and promised to do so on his “first day” as President. But when they got down to it, the GOP found uprooting Obamacare much harder than anyone thought.
For seven years, the GOP had run on the mantra of “repeal and replace Obamacare”, a simple formula that left completely unanswered what they were going to replace Obamacare with. The GOP had criticized the ACA for requiring people to buy health insurance, and then giving them policies that had deductibles and co-payments that many found burdensome. They also cited the fact that even with Obamacare, there were still over 20 million people in the country without health insurance.
But Obamacare had done a vast amount of good. 25 million more Americans now have health insurance, and tens of millions benefit from knowing that they cannot be denied insurance in the future due to pre-existing illnesses, a common practice in the years before the ACA. Under the ACA, the cost pressures in health care had actually come down, with the slowest five-year growth in health care cost ever in the years 2011-2016. In fact, total Federal spending on health care is now less with the ACA than the Congressional Budget Office had projected in 2010 would be the case by 2017 without the ACA spending. Much of this is due to sharp reductions in the actual growth of Medicare spending on the elderly, much of which is due to reforms instituted in the ACA.
This success, and the popularity of the ban on pre-existing conditions as a basis for denial of health insurance, made key elements of the ACA popular with the American people. In addition, the expansion of the Medicaid program to cover Americans making up to 133% of the poverty line, was very popular in many large states with Republican congressmen and Senators. This put the GOP in a bind, the hard-core conservatives wanted to repeal Obamacare, even if it meant taking health insurance away from 25 million people, while more moderate Republicans worried that to do so would cost them re-election, and be tremendously unpopular with the voters.
What the GOP leaders wanted was a “conservative” replacement of Obamacare that would be popular with the American people. But Obamacare was a “conservative” approach to achieving near-universal health insurance. It was not possible to create another system that could be seen as conservative but did not end up taking away insurance from the poor and middle-class while giving a massive tax cut to the richest. After several failed attempts, Paul Ryan was able to get a House plan passed by a single vote margin, and that was only by promising many GOP Congressmen that the Senate would “fix” the terrible House bill, which the CBO projected would cost 25 million people their insurance.
Excited that an Obamacare repeal had passed the House Trump held a premature victory party in the Rose Garden. Unfortunately, the effort in the Senate collapsed. The Senate was not able to come up with any kind of a workable plan, and never held any hearings or public debate about alternatives. The Senate Majority Leader Mitch McConnell was reduced to taking votes on five different options. First was the House bill itself, which failed badly, then a Senate bill that McConnell had drafted in private, which also failed. Senator Rand Paul then got a vote on a repeal of Obamacare with no replacement, that also failed. Ted Cruz got a vote on a plan that allowed insurance companies to sell lousy plans if they also sold good ones, that was defeated too. Finally, McConnell gave up and put forward a “skinny repeal” bill that simply allowed the Senate the fiction that they had voted in favor of “something”. This would allow them to then go to a conference committee with the House in which a totally new and better plan would be created that everyone would love and would fulfill the GOP fantasy. Many Senators openly derided “skinny repeal” as a horrible bill, and some went so far as to demand a guarantee from Paul Ryan that the House would not simply take up the Senate Bill and vote it into law, which they could in theory do. With 52 GOP Senators, McConnell could only lose two votes, and those were going to be Susan Collins of Maine and Lisa Murkowski of Alaska. But in a dramatic late-night vote, John McCain also voted no, putting an end to the repeal of Obamacare. In private, many other Senators were glad to see the bill defeated, but they did not want their fingerprints on it out of fear of the hard-right which was livid over the failure.
Thus ends the GOP war with Obamacare. What this means is that the single greatest expansion of the social safety net since the creation of Medicare in 1965, has become permanent. It cements the legacy of Obama as one of the most consequential Presidents of the last fifty years. And it now gives the Democrats, who have been consumed with defending Obamacare, the opportunity to go even further on health care.
There are still 25 million people without health insurance. To close that final gap, the Democrats have a variety of options. One is to get rid of private insurance, and create a single-payer system, what many call “Medicare for all”. In this system, we will all pay higher taxes, which will fund Medicare for every American, but we will no longer have to buy insurance privately or through our employers. Such a change would be massively disruptive, and viciously opposed by the health insurance industry. Another option would be to allow Americans to buy into Medicaid, especially lower income Americans that are using the Obamacare exchanges to get insurance. This would be easier and less disruptive. A third idea is to allow older Americans who are below the Medicare age to buy into Medicare early. This is often proposed as allowing people over the age of 55 or 60 to buy Medicare.
The defeat of Hillary Clinton came as a great shock to Democrats, and they were dismayed at the thought of what Trump could do with a Republican Congress. So far, the answer is “not much”. Meanwhile, Trump has an approval rating in the mid-30’s. These kind of numbers auger well for Democrats to take back Congress in the next election, the House certainly, and the Senate, if they get really lucky.
