How Republicans Shot Themselves in the Foot on Pre-Existing Conditions

Republicans who want to blame their election shortcomings on last year’s attempt to “repeal-and-replace” Obamacare will have all the fodder they need from the media. A full two weeks before Election Day, the bedwetters caucus was already out in full force:

House Republicans are increasingly worried that Democrats’ attacks on their votes to repeal and replace Obamacare could cost them the House. While the legislation stalled in the Senate, it’s become a toxic issue on the campaign trail for the House Republicans who backed it.

In reality, however, the seeds of this problem go well beyond this Congress, or even the last election cycle. A health care strategy based on a simple but contradictory slogan created a policy orphan that few Republicans could readily defend.

A Dumb Political Slogan

Around the same time last year, I wrote an article explaining why the “repeal-and-replace” mantra would prove so problematic for the Republican Congress trying to translate the slogan into law. Conservatives seized on the “repeal” element to focus on eradicating the law, and taking steps to help lower health costs.

By contrast, moderates assumed that “replace” meant Republican lawmakers had embraced the mantra of universal health coverage, and would maintain most of the benefits—both the number of Americans with insurance and the regulatory “protections”—of Obamacare itself. Two disparate philosophies linked by a conjunction does not a governing platform make. The past two years proved as much.

A Non-Sensical Bill

In life, one mistake can often lead to another, and so it proved in health care. After having created an internal divide through the “repeal-and-replace” mantra over four election cycles, Republicans had to put policy meat on the details they had papered over for seven years. In so doing, they ended up with a “solution” that appealed to no one.

  1. Removed Obamacare’s requirements for what treatments insurers must cover (e.g., essential health benefits);
  2. Removed Obamacare’s requirements about how much of these treatments insurers must cover (e.g., actuarial value, which measures a percentage of expected health expenses covered by insurance); but
  3. Retained Obamacare’s requirements about whom insurance must cover—the requirement to cover all applicants (guaranteed issue), and the related requirement not to vary premiums based on health status (community rating).

As I first outlined early last year, this regulatory combination resulted in a witch’s brew of bad outcomes on both the policy and political fronts:

  • Because lawmakers retained the requirements for insurers to cover all individuals, regardless of health status, the bills didn’t reduce premiums much. If insurers must charge all individuals the same rates regardless of their health, they will assume that a disproportionately sicker population will sign up. That dynamic meant the bills did little to reverse the more-than-doubling of individual market insurance premiums from 2013-17. What little premium reduction did materialize came largely due to the corporate welfare payments the bills funneled to insurers in the form of a “Stability Fund.”
  • However, because lawmakers removed the requirements about what and how much insurers must cover, liberal groups raised questions about access to care, particularly for sicker populations. This dynamic led to the myriad charges and political attacks about Republicans “gutting” care for people with pre-existing conditions.

You couldn’t have picked a worse combination for lawmakers to try to defend. The bills as written created a plethora of “losers” and very few clear “winners.” Legislators absorbed most of the political pain regarding pre-existing conditions that they would have received had they repealed those regulations (i.e., guaranteed issue and community rating) outright, but virtually none of the political gain (i.e., lower premiums) from doing so.

Some people—including yours truly—predicted this outcome. Before the House voted on its bill, I noted that this combination would prove untenable from a policy perspective, and politically problematic to boot. Republicans plowed ahead anyway, likely because they saw this option as the only way to breach the policy chasm caused by bad sloganeering, and paid the price.

Lawmaker Ignorance and Apathy

That apathy continued after Obamacare’s enactment. While Suderman articulated an alternative vision to the law, he admitted that “Republicans can’t make the case for that plan because they’ve never figured out what it would look like. The GOP plan is always in development but never ready for final release.”

Emphasizing the “repeal-and-replace” mantra allowed Republicans to avoid face the very real trade-offs that come with making health policy. When a Republican Congress finally had to look those trade-offs in the face, it couldn’t. Many didn’t know what they wanted, or wanted a pain-free solution (“Who knew health care could be so complicated?”). Difficulty regarding trade-offs led to the further difficulty of unifying behind a singular policy.

Can’t Avoid Health Care

Many conservative lawmakers face something that could be described as “health policy PTSD”—they don’t understand it, so they don’t study it; they only define their views by what they oppose (e.g., “Hillarycare” and Obamacare); and when they put out proposals (e.g., premium support for Medicare and “repeal-and-replace” on Obamacare), they get attacked. So they conclude that they should never talk about the issue or put out proposals. Doubtless Tuesday’s election results will confirm that tendency for some.

Rather than using the election results to avoid health care, Republican lawmakers instead should lean in to the issue, to understand it and ascertain what concepts and policies they support. The left knows exactly what it wants from health care: More regulation, more spending, and more government control—leading ultimately to total government control.

Conservatives must act now to articulate an alternative vision, because the 800-pound gorilla of Washington policy will not disappear any time soon.

This post was originally published at The Federalist.

“Repeal and Replace” Becomes “Repeal vs. Replace”

In the past few weeks, various articles summarizing Republican moves on health care have attempted to analyze the factions and dynamics driving the debate. Why, some reporters have asked, are Republicans struggling to draft a consensus alternative to Obamacare, given that the party had seven years to create such a plan?

Apart from the point that Democrats faced their own not-insignificant divisions on health care eight years ago, much of the debate within Republican ranks has its roots in fundamental disagreement about what an alternative to Obamacare should do. If two people or factions can’t agree about the ultimate goals of legislation, it shouldn’t be surprising to find them disagreeing on the policies to include in said bill.

For all the emphasis on the “repeal and replace” slogan since the day Obamacare passed Congress in March 2010, the current debate might be characterized as “repeal vs. replace.” Repealers focus more on eradicating the law, while replacers wish to make sure that an alternative does not leave many of Obamacare’s newly covered uninsured.

Repealers
The repeal faction generally comes from the conservative wing of the party. It wants every word of Obamacare repealed — lock, stock, and barrel — and, in some cases at least, is willing to consider blowing up the Senate filibuster (aka the “nuclear option”) to do it. Repealers generally do not want to maintain many, or any, federal regulations on health insurance, deferring to the states (as was largely the case prior to Obamacare).

When it comes to alternative policies, some repealers don’t care about “replacing” Obamacare at all and would content themselves with a return to the status quo ante. Other repealers would focus more on enacting reforms to lower health-care costs rather than expanding coverage or providing subsidies to previous Obamacare recipients. Some repealers would go beyond repeal to examine prior federal encroachments on health policy that preceded President Obama’s tenure.

Of particular import: Repealers believe that repeal means the elimination of all of Obamacare’s taxes and spending — and that these should go away, not to return. That directly contrasts with the approach of replacers, who focus on another policy objective.

Replacers
Whereas repealers want to eradicate the health law’s spending and taxes — to use the Washington lingo, they would return to the pre-Obamacare fiscal baseline — replacers focus on maintaining, or at least not eliminating, Obamacare’s coverage baseline. They would like an alternative to Obamacare to at least be competitive with current law when it comes to the number of individuals with health insurance — although for different reasons. Some replacers believe in the goal of universal health coverage, while others simply believe that an alternative, to be politically viable must offer something to those currently covered by Obamacare.

Coming from more moderate or establishment wings of the Republican party, replacers focus on preserving coverage gains as an objective of any alternative legislation, whereas repealers focus solely on lowering health-care costs. To preserve Obamacare’s expansion of coverage (albeit perhaps with reduced benefits), replacers would either preserve some of Obamacare’s tax increases, or repeal them all but institute new measures to raise revenue in their place.

Replacers also would maintain a greater level of federal oversight of health insurance than repealers. They would attempt to preserve policies such as Obamacare’s under-26 insurance mandate, ban on annual and lifetime limits, and the ban on preexisting conditions; repealers would either devolve these policies to the states or scrap them entirely.

As for the president, he has — as on many issues — given mixed messages. His public statements — “insurance for everybody,” “simultaneous repeal-and-replace” — tend to put him in the replacer camp. But candidate Trump’s platform on health care, with a minimalist approach focused largely on reducing health-care costs, emphasized the repealer elements of his agenda during the contentious Republican primaries last spring.

Rorschach Test
It is perhaps oversimplifying matters to view these two schools of thought as diametrically opposed. Members of Congress could agree with elements of both factions, depending on the specific issue.

But it does not oversimplify to say that the question of emphasis — who cares more about repeal, and who cares more about replace? — has driven much of the debate since the November 8 election results gave Republicans an opportunity to impose their will on health care. It explains why some replacers have argued in favor of keeping some or all of Obamacare’s tax increases, and it explains why conservative repealers have expressed opposition to replacing Obamacare’s subsidies with another system of refundable tax credits.

The New York Times recently profiled Josh Holmes, the former aide to Senator Mitch McConnell who coined the “repeal-and-replace” phrase when working for the Republican leader seven years ago. But while the phrase proved catchy among elected leaders, it did not solve the debate about which policies to include in an alternative plan. Instead, by creating a new Rorschach test, in which candidates could emphasize either the “repeal” or the “replace” elements depending on their political views and the audience of the moment, it effectively postponed the day of decision within the party.

With views on Obamacare alternatives not fully litigated during the 2016 campaign cycle (or, for that matter, the cycles preceding it), that day of reckoning has finally arrived. Whether and how Republicans resolve the conflict between the repealers and the replacers will help determine whether the catchy phrase “repeal-and-replace” gets dubbed with a catchphrase of its own: Too cute by half.

This post was originally published at National Review.