Republicans War Among Themselves Over Obamacare Replacement

Former House Speaker Nancy Pelosi was mocked for years by Republicans for saying about the Affordable Care Act, "We have to pass the bill so you can find out what is in it". How comical therefore to see Republicans doing the same. What we'll call the Ryan bill — created as much or more by the new Health & Human Services chief, Tom Price — was kept in a locked room in the House with only a limited roster allowed to read it. Not even Republican senators were allowed to see it. It's being pushed through the requisite House committees with great haste despite roaring dissension from within Republican ranks. Majority Leader Mitch McConnell says he will take the House bill straight to the floor for vote with no debate.

But now, all its secrets are out. The bill is being challenged by industry and medical groups for depriving people of access to care, by extreme right factions for being too liberal, by a public that is slowly understanding what it is about to lose with Obamacare repeal, and President Trump thinks it's moving too fast and needs negotiation, having found that "Nobody knew that healthcare could be so complicated", when everyone knows how complicated it is.

Former Speaker John Boehner is now free to speak his mind: "In the 25 years that I served in the United States Congress, Republicans never ever one time agreed on what a health care proposal should look like. Not once."

Ryan is ramming the bill through the House refusing any changes. He is rigid in the face of the critical ferment. "It really comes down to a binary choice", he said. "This is the chance, and the best and only chance we're gonna get".

But Arkansas Republican Senator Tom Cotton has been sounding an alarm: "Do not walk the plank and vote for a bill that cannot pass the Senate and then have to face the consequences of that vote".

The House bill was approved by two of the requisite committees even without "scoring" by the Congressional Budget Office (scoring estimates how many will buy insurance and how much the plan will cost) which has just been released. The CBO forecasts a drop in the number of insured of 14 million in the Republican plan's first year alone, rising to 24 million by 2026, but that the plan will see savings of $337 billion.

Before the announcement, the White House had bad-mouthed the CBO, pointing out how wide of the mark its estimates have been in the past. White House budget director Mick Mulvaney actually said, "I love the folks at CBO...but sometimes we [sic] have to do stuff we're not capable of doing and estimating the impact of a bill of this size probably isn't the best use of their time".

Press secretary Sean Spicer joined in: "If you're looking at the CBO for accuracy, you're looking in the wrong place". Two days later, pleased at the dollar estimates, Spicer repeated that the CBO is no good at estimating people but is very good at estimating cost.

Donald Trump calls the Affordable Care Act "the very, very failed and failing Obamacare law", and a "disaster", but throwing more confusion into the mix, counsels Ryan and Price to wait a year and let the country watch Obamacare implode. Otherwise, "people aren't going to see the truly devastating effects of Obamacare". Otherwise, "if we end it, everyone's going to say, oh, remember how great Obamacare used to be".

Well, yes, of course it is imploding, and the Republican zeal for repeal is the cause. With the mandate that requires everyone to buy insurance or pay a penalty gone or unenforced under one of the president's first executive orders, insurers believe they will be left with only the ill, requiring the costliest care, so they are dropping out of the exchanges.

Agreement looks beyond reach. The American Medical Association, the American Hospital Association and AARP, which represents older persons — all are alarmed that when millions lose insurance under repeal, the providers will lose the revenue needed to provide care. Governors from the 31 states states that opted for expanded Medicaid, which has given some 11 million of their citizens access to healthcare they never had but will disappear come 2020, are lobbying the Senate. Republican Congress members brave enough to stage town hall sessions during the recent one-week break were met with raucous crowds shouting their outrage at losing the insurance they finally gained under the Affordable Care Act. Hard-right Republicans that still haven't heard that Obamacare is now more popular than ever said those must have been Democrats bused in from elsewhere. No sign of buses, however.

At the other end of the spectrum, the extreme right, with backing by the billionaire brothers Charles and David Koch, the Club for Growth and Heritage Action for America, is against the bill primarily because, in place of the subsidies that helped people buy insurance, the replacement bill offers refundable tax credits — "Obamacare-lite" they call it, because, like the subsidies, to them it's just another entitlement.

What especially bothers them is that the tax credit will be an outright payment to the over 40% of Americans who make so little in income that they pay no income tax from which to deduct their credit. Trump had said some time ago, "if you can’t pay for it, you don’t get it [is] not going to happen with us".

Mark Meadows, Chairman of the Freedom Caucus, and representing a safely gerrymandered district in western North Carolina ironically filled with churches teaching Christian principles, and backed by the district's overabundance of unaffected Medicare retirees who safely exercise their ideological purity at the expense of others, says he wants a "clean repeal" with evidently little concern for any replacement. He leads the fight against the Ryan plan, would strip away the tax credit, and cancel the federal government funded Medicaid expansion, in combination leaving around 20 million Obamacare subscribers with nothing. What would be left to be called replacement? Insurance. Buy some if you have the money. Health savings accounts. Start one if you have the money.

The president is faced with the task of bringing these factions together, or see the enterprise fail. He says he intends to hold the stadium-size rallies that worked in his campaign to pressure the way-right faction to come to terms.

So says Trump. Try to find the beauty in this: Insurers price their products based on the age of the client, as one might expect. Under the Affordable Care Act, they are limited to charging the oldest age group three times what they charge the youngest. In the Ryan/Price package the ratio is 5 to 1. Extraordinarily prejudiced against older people, this huge difference is sure to price their millions out of the market, leaving them in their later years hoping nothing goes wrong before reaching Medicare age.

The tax credits to help pay for that insurance are also geared to age. What has critics dumbfounded is that the credits' ratio is only 2 to 1; the oldest will get a maximum of only $4,000, just twice the $2,000 that the youngest would receive, to pay for insurance that costs five times as much as what the young would pay.

More bafflement: Why are the credits based only on age? Because insurers price their products based on age. A customer's income is irrelevant to insurers. But how can the government justify handing out taxpayer money based on what makes sense for the insurance business and to people who don't need the money?

Of course, the amounts are so low that this becomes an academic quibble. The credits don't begin to pay the tab for America's expensive health insurance, which derive from America's out of control health care costs. Whereas the Wall Street Journal celebrates the "Historic Health-Care Moment" and avoids making comparisons, the New York Times gives several examples of the complete inadequacy of the subsidy Republicans are offering. Here's one:

A 60-year-old earning $20,000 in Lincoln, Neb., currently gets a subsidy of $18,470 [!] to help her buy insurance, with extra subsidies to help her pay deductibles and co-payments, according to calculations made by Kaiser [Family Foundation, a health research group]. Under the new legislation, she would get a subsidy of $4,000, and no help with cost sharing.

Note that we're in Lincoln, Nebraska, because the Affordable Care Act's subsidies are attuned to the different insurance costs across the nation. The replacement plan pays no attention to that.

Here's more: Individuals earning more than $75,000 a year get no tax credit. For couples the cutoff is $150,000. The hard limits make the same mistake of Obamacare's requiring that companies with over 50 employees pay for health insurance for those working over 30 hours a week. Companies began shifting to part-time to stay under the 50-employee bar. With the Ryan plan credits, where's the fairness of an all or nothing cliff at those two thresholds instead of a gradual phase out based on income? It's an inducement for people with income near the cutoffs to cheat.

Recall that Trump said, "Insurance for everybody". But those over the thresholds will not even get the plan's paltry assistance. Price, in his Senate confirmation hearings, constantly used the code word "access" to health insurance. After hearing it once too often, Bernie Sanders interrupted with, "I have access to buy a ten million dollar house, but I don't have the money".

And there's this: The Affordable Care Act greatly expanded Medicaid by raising eligibility to those making 138% of the government's poverty line and paying 100% of the cost for three years and 90% thereafter. Unbelievably, before the Affordable Care Act, the median income for working parents to qualify for Medicaid had to be less than 61% percent of the poverty line. The reform plan continues Obamacare coverage until 2020, but will admit no one new thereafter, excluding anyone whose income newly drops below the poverty line.

Health care costs vary widely by region and state. Obamacare's Medicaid pays the going local rates. But just as their tax credit is $2,000 to $4,000 no matter the local cost of insurance, Messrs. Ryan and Price prize simplicity no matter how ill it fits reality. Beginning in 2020 their plan will pay to the states a fixed rate per capita for those enrolled in Medicaid, no matter the costs regions and states are experiencing, no matter health care cost inflation. The far right is angered by this plan for a different reason. They can't believe the plan doesn't kill Medicaid expansion immediately.

Moreover, no new applicant — new adults or families who fall below the poverty level — would be admitted to the federal rolls beginning the next decade. Persons or families who lose Medicaid eligibility owing to rising incomes, but then drop again below the poverty line, would not be allowed back in. It will be left to the states to pick up the tab over and above the federal fixed amount per person for any new enrollees, and for the fluctuating needs of their citizens. That is a formula for the gradual extinction of federal involvement in Medicaid, as Republicans intend. The Center on Budget and Policy Priorities estimates that $370 billion in cost would be handed to the states over 10 years. The states won't have the money.