Posts About The Takeaway

Numerous news outlets have confirmed that the Senate is planning to hold its floor vote on ACA repeal and Medicaid restructuring next week, before adjourning for the July 4 recess week, without the benefit of any public process. Although many Republican Senators continue to decry the process, their objections are obviously just for show since it would only take three of them to stop the bill in its tracks until a more deliberative process was put in place. Yet they have continued to play the part of helpless bystanders rather than exercise the power that they actually have. As a result, a bill that has the potential to affect one-sixth of the U.S. economy, and the lives of tens of millions of people, will hit the Senate floor next week with only a minimal opportunity to assess the potential damage it would do. More details could emerge as soon as Thursday, with a Congressional Budget Office score to follow shortly thereafter, but under Majority Leader McConnell’s strategy, there will be very little time between the score release and the vote, with essentially no procedural opportunity to make improvements.

In addition to answering key policy questions, the release of Senate bill language – when it finally happens – will show how Sen. McConnell has decided to approach the political divides in the chamber: specifically, whether he will follow the House path and appease his most conservative members while daring the “moderates” to vote “no;” or whether he will, instead, take to heart Trump’s recent criticism of the “mean” House bill and actually try to produce something slightly less bad while daring the right in both the Senate, and ultimately the House, to vote “no.”

Here’s a guide to what to look for whenever the Senate language finally emerges:

In General:

Despite all the talk about starting over, expect the Senate bill to largely track the House-passed bill with a bit of window dressing thrown in that Senators will point to in an attempt to save face after having verbally panned the House plan in the hours and days after its passage.

Medicaid

More than anything else, the House version of the AHCA is at its core about drastically cutting Medicaid to pay for huge tax cuts for the wealthy and for big drug and insurance corporations. There is every indication that the Senate version will follow suit. The debate in the Senate has largely taken for granted the conversion of the Medicaid program from one that guarantees matching funds to states to one that caps federal payments and shifts costs onto the states, providers and beneficiaries. Although a bipartisan group of governors has recently raised concern about this, there has been virtually no dissension within the Senate GOP. Instead, the Senate debate has revolved around the rate of growth of those federal payments and the fate of the Medicaid expansion the ACA authorized.
A number of GOP senators have indicated that they want a growth rate no worse than the House bill’s while also killing off the Medicaid expansion more slowly – e.g., a seven-year phaseout of the enhanced federal matching funds that make the expansion possible, rather than an abrupt cutoff in 2020. Some other senators have been arguing for a more miserly federal growth rate than that in the House bill.
Look for the Senate proposal to offer a slower phaseout of the expansion than the House version’s, coupled with a stingier growth in the cap after a few years of tracking the House formula. This will be portrayed as a “compromise,” but it would in actuality be a surrender on the part of those who have been arguing that the Senate should do better than the House with respect to Medicaid. Ultimately, the coverage expansion will still be totally eliminated, while funding for older adults, people with disabilities and children is squeezed even harder as it phases out. The wild card here is that the biggest losers would be the states that did not expand Medicaid in the first place. They would get nothing at all from a slower phaseout while receiving fewer federal matching funds for their existing Medicaid beneficiary population. It is not beyond the realm of possibility that this deal could cause some Senators who are normally reliable votes for McConnell to reconsider their support.
The cap growth rate and expansion phaseout are the “marquee” Medicaid issues, but a host of details will also be important, such as what the base year will be for setting the cap, what – if any – adjustments are made over time and how caps are calculated for different populations.

Lipstick on the Pig:

While the basic Medicaid deal in the Senate is shaping up to be at least as bad as the House bill’s, rumor has it that the Senate may exclude some children with special health care needs from the funding cap. In addition, there has been discussion about including a separate fund to address opioid addiction. The notion is that these modifications would allow the GOP senators to (try to) claim that they are being less “mean.”

Marketplaces

With regard to the private non-group market, expect the Senate to rely on a tax-credit structure that adjusts for income and age but is still far less generous than that currently in effect under the ACA. We also expect that states would still be allowed to waive rules related to the benefit package but that plans would not be allowed to charge higher premiums to people with pre-existing conditions. People with expensive medical needs would still be harmed, though, because without a comprehensive benefit package, a lot of the cost of care could be shifted back to individuals.

Access to Reproductive Health Services

Look for the defunding of Planned Parenthood to remain in the bill. Although senators Collins and Murkowski are likely to offer an amendment to strike that provision, such an amendment will probably fall short on a 50-50 tie. The question then will be whether either or both these senators will vote “no” on final passage, thereafter. In addition to defunding Planned Parenthood, the House bill tries to prohibit tax credits from being used for any insurance plan that covers abortion services. This provision will probably be struck as a violation of Senate budget reconciliation rules, but the Senate is looking for an alternative route to achieve the same objective.

Taxes

To the extent that there is a need for additional revenue to meet the House deficit reduction target, the Senate will likely delay the effective date of some of the tax cuts that are in the bill. In the alternative, they could temporarily suspend some of the tax cuts with an expectation that they could do a full repeal later.

Where Are the Votes?

Despite the haste, or perhaps because of it, it remains unclear whether the votes to achieve passage are there in the Senate. At the risk of oversimplifying: to get the requisite 50 votes for the Senate bill to pass – with a tie-breaking “yes” vote assist from Vice-President Pence – McConnell will have to keep at least four of the six Senators who comprise the most conservative and most moderate flanks of his caucus – Cruz, Lee, Paul on the right and Collins, Murkowski and Capito in the middle. He will also have to keep Sen. Heller of Nevada on board – the most endangered member of the GOP caucus up for reelection in 2018, being from a state that has benefited greatly from the ACA. Sen. McConnell has to do those things while also preventing any other defections from senators whose states stand to lose big time in numerous ways under this bill (which is really kind of all of them).

With thanks to Quynh Chi Nguyen, policy analyst, for her assistance.

If there is any takeaway from the double threat the AHCA, as reassessed by the CBO last week, and the Trump budget, which was also released last week, pose to our health and economic security, it is that it is vitally important to keep our eyes on what the people running the government in Washington actually do while regarding their words with extreme skepticism.

In the wake of both developments last week, we were treated to so many breathtaking whoppers that it is hard to know where to begin. If there were an award for double-speak, there would be a rich candidate pool from which to draw. Below are a few potential award winners.

Consider the double dishonesty of Paul Ryan, who continues to characterize his efforts to save the Affordable Care Act (ACA) insurance markets by destroying them as an act of compassion. Ryan continues to tout CBO's finding that in the long run, premiums would go down under the AHCA. But he ignore the fact that the decrease in average premiums stems from a combination of increased out-of-pocket costs and excluding older and sicker people from coverage entirely. Furthermore, as the CBO analysis illustrates, not only would the AHCA undermine consumer protections and slash tax credits that make coverage affordable, but under the false flag of saving us from the ACA, it would fulfill Speaker Ryan's lifelong dream of taking healthcare away from seniors, people with disabilities and low income children and families. The AHCA makes steep cuts both to the part of Medicaid the ACA expanded and the core program that has protected vulnerable populations for the last 50 years.

Or consider three health care promises of Donald Trump: not to cut Medicaid, to protect people with preexisting conditions and to make affordable coverage available to everyone, The CBO analysis and Trump’s own budget exposed these promises as lies last week (some, not for the first time). (He also promised not to cut Medicare or Social Security and has proposed or supported cuts in both of those programs.) To understand the dystopian future of health care the Trump administration envisions, you really have to read the budget proposal and AHCA together. AHCA has not even moved from the House to the Senate, and the administration is already doubling down on the cuts to Medicaid. While it is difficult to tease out exactly what the budget proposes, the reduction in federal funds to Medicaid could climb to as much as 45 percent within 10 years.

While we're discussing the Trump budget, consider the sophistry of OMB Director Mick Mulvaney -- having a Mitt Romney moment -- who advanced the bogus distinction between taxpayers and recipients of health care benefits. Mulvaney conveniently ignored the fact that the people who receive coverage via the ACA, Medicaid and Medicare all pay taxes and the millions of people with employer-sponsored insurance enjoy a large tax subsidy.

And how are we to understand the words of Freedom Caucus co-chair Mark Meadows -- who got choked up as recalled his family's struggles with illness and claimed that those experiences had sensitized him to the problems of people with people with pre-existing conditions?  Are we to believe that he really didn't know how the bill he helped shape and push through the House would affect people with pre-existing conditions? Perhaps he should be taken literally, after all, he said he was not going to make a political decision on May 24th to take health care away from sick people. Technically that was a true statement, since he had made that decision weeks earlier when he voted to pass AHCA.

Finally, consider the words of Senate Majority leader Mitch McConnell who last week said, "I don't know how we are going to get to 50 in the Senate." A true statement, and different in nature than the others, but still easily misinterpreted. It would be as dangerous to read too much into McConnell's seemingly innocuous statement as it would be to take the others’ statements at face value. Doing so could lull people into a false sense of security. Just because at this moment McConnell does not know the path to 50 votes or the content of a Senate bill should not be interpreted to mean that the Senate will not do a bill or that they will do a bill that departs drastically from the House proposal.

Although many Senators have voiced concerns about the House bill, we can no more rely on the "reasonableness" of the Senate than on the false words of Trump, Ryan and company. Remember, any lurch toward reason in the Senate runs smack into the prime directive of the modern GOP: that the solution to any problem is always a tax cut for the rich. Further, a bill in the Senate must reduce the deficit by the same amount as the House bill (now pegged at $119 billion by CBO). The combination of the deficit reduction target and the Republican Party's commitment to big tax cuts for the rich spells big trouble for people with disabilities and preexisting conditions and for people of modest income who lack employer-sponsored insurance.

The only hope to avoid turning back the clock not only on the ACA, but also on Medicaid, is a massive show of resistance. This needs to start this week when Senators are home for recess and continue until they abandon their mad project of undermining the health and economic security of millions of people.

With thanks to Quynh Chi Nguyen, policy analyst, for her assistance.

Last week’s abrupt firing of FBI Director James Comey has pushed health care out of the headlines, at least to some extent. However, the progress of the health care bill through Congress raises its own questions about the health of our democracy. Only about 20 percent of the public supports the American Health Care Act (AHCA), according to the most recent polling. And nearly the entire health care industry plus groups like AARP, American Cancer Society and National Alliance on Mental Illness (NAMI) deplore the bill. Furthermore, there is a large intensity gap, with supporters lukewarm and opponents intense in their dislike of the bill. Moreover, health care now tops the public's issues of concern, tied perhaps not coincidentally with poor government leadership.

In a functioning democracy, such massive public opposition coupled with equally unified opposition from the most affected segments of the economy would spell legislative doom. However, in the current political environment, passage of legislation that serves the narrow ideological and financial interests of only a very few is a better than even bet.

Washington DC – Home of the Whopper

But democracy still matters. And the best proof of that is that the proponents of the AHCA, both in the House and in the administration, feel compelled to continuously misstate (aka lie about) the content and the consequences of their legislation. They have claimed, for example, that no one would lose coverage as a result of the cut to Medicaid (HHS Secretary Price), that the bill was bipartisan (Rep. Denham), or even that no one dies because they don't have access to health care (Rep. Labrador). But lying has been a foundational part of the strategy to oppose the ACA since before it even became law. Remember "death panels" and, more recently, candidate Trump's promises not to cut Medicaid or Medicare (both broken, of course, in AHCA)?

In addition to the outright falsehoods, in the past week we have heard Republicans offer up statements ranging from the ludicrous to the bizarre to the reprehensible. On the ludicrous front, just a few weeks ago President Trump observed that no one could have known how complicated health care was; now he claims to know everything about it.

For an example of the bizarre, we have Rep. Mo Brooks suggesting that preexisting health conditions only afflict those who have done something wrong to deserve their illness.

As for the reprehensible, I give you Senator Hatch, perhaps channeling his inner Mitt Romney, dismissing all of the people who benefit from the ACA as people "on the dole who are trying to get every dime they can."

Sabotage Watch

While lying is a critical part of the ACA takedown strategy, it is not enough by itself. Too many people have benefited to make the lies credible to most of the public. Therefore, another essential component of the ACA takedown strategy is to undermine its effectiveness through a combination of action and inaction. In particular, by creating a climate of financial and regulatory uncertainty, the Trump administration is leading even those insurers who choose to remain in the marketplaces to seek large premium increases. If we had an administration and a Congress that tried to make the ACA work rather than undermine it at every turn, there is little doubt that more people would be covered and premiums would be lower.

Senate Off to a Shaky Start

Things did not get off to a great start in the Senate for Majority Leader Mitch McConnell when, following the House's male-dominated victory party, he appointed an all-male task force to work on the Senate version of reform. In addition, the complicated dynamics in the Senate were on full display, with Senators Cruz, Lee and Toomey all pressing to make the Senate bill even worse than the House bill by making the cut to Medicaid bigger and by rolling back even more insurance protections. At the same time, Senators Collins and Cassidy were publicly criticizing the House bill because it both cuts benefits for seniors, kids and people with disabilities to pay for tax cuts for the rich, and would undermine protections for people with pre-existing conditions.

Most pundits expect McConnell to figure out some way to thread the needle in his chamber, although it remains to be seen whether something that can pass the Senate can make it back through the House.

Meanwhile, the dodges and deceptions don't appear to be working. Public fear and anger are intense and seem to be growing. With a majority of Republicans now saying that government should guarantee access to affordable quality health care, continued embrace of the AHCA puts Republican legislators at odds not just with the general public but also with their own voters. Passage of the AHCA immediately increased Republicans' chances of losing the House in 2018, according to some election watchers. People have focused special vitriol on Rep. Tom MacArthur, who originally opposed the first version of the AHCA, for his role in getting the bill through the lower chamber. And members such as Mark Amodei from Nevada, who flipped from opposition to support of AHCA, have seen their favorability ratings drop--a warning for Senator Dean Heller, one of the most endangered members among Senate Republicans.

With at least a couple Senators nervous (and McConnell can only lose two in total), getting a bill through the Senate is already a high hurdle to clear. Getting a bill that could become an anchor around the necks of Republican candidates in 2018 through to final passage seems likely to prove a much greater challenge.

There is no need to take up too much space here reviewing the ugly particulars of the American Health Care Act (AHCA) or the devastating consequences if something like it eventually becomes law. You can find excellent roundups here and here. It is true there are some less-well-understood implications of the legislation, such as the fact that if any state receives a waiver from the Essential Health Benefits requirement it could affect coverage for people with employer-sponsored insurance in every state. However, by now, the main provisions of the bill – a dramatic scaling back of the assistance that makes health insurance affordable – are well known.

How did a worse-than-bad bill pass the House after defeat in round one?

So instead of a bill recap, let's focus on how what was arguably an even worse bill than the one that failed in the House a few weeks ago managed to pass, and how that story helps inform what might happen next in the Senate. The unfortunate but inescapable conclusion is that it is precisely because the bill was worse that it was able to pass.

The intensity and consistency of the farthest right members of the House Republican caucus was not matched by the more amorphous and individualistic concerns of the House "moderates." In the AHCA’s initial outing, the more centrist members of the Republican caucus did not have to shoulder full responsibility for the failure of the bill to advance. However, once the Freedom Caucus got on board by further undermining consumer protections, the full weight of blocking repeal fell entirely on the "moderates," who became susceptible to the following arguments:

  • If the House didn't advance a bill, the optics would be bad. After all, they had been promising "repeal and replace" for seven years.
  • Even if the "replace" part was not what House members had in mind, the Senate would fix it later.
  • Cutting taxes in the health care bill would help them deliver a big tax cut to the wealthiest households and make their tax code overhaul easier.

These arguments, combined with the fig-leaf of protection the Upton amendment provided, and perhaps not wanting to be on the wrong side of leadership, Trump and the Koch machine all at once, gave just enough members the cover they were looking for. They could ignore the massive protests back home, pass the bill and celebrate in the White House Rose Garden.

Don’t assume the Senate will “save the House from itself.”

There are a few takeaways from this story as we contemplate the future of ACA repeal in the Senate. First, disregard the common assertion that the Senate will "save the House from itself," or at least take it with a very hefty dose of salt. Although the Senate has its own dynamics that differ from the House’s, there are also key similarities. There are also procedural hurdles to overcome if "fixing the bill" extends beyond adjusting the insurance market changes to fixing the Medicaid provisions and restoring the cuts in premium assistance.

With respect to political dynamics, the Senate has its own right-versus-far-right divide. And just like in the House, the far-right members (Cruz, Paul and Lee) are much more comfortable acting as spoilers than the so-called moderates who don't like the ACA, even if the changes they seek are somewhat more modest. As it turned out, the House "moderates" were a pretty cheap date. There is reason to be concerned that many in the Senate who have expressed concerns will settle for modest, and mainly cosmetic, changes. It's also worth noting that Cruz and Lee are both on the work group drafting the Senate bill, but none of the most consistent critics – Collins, Cassidy, Murkowski or Capito – are included.

This is particularly true with respect to Medicaid. Under the AHCA, not only would cuts in reimbursement force many states to abandon the coverage gains of recent years, but capped funding also would squeeze states' abilities to maintain services for children, people with disabilities and older adults. (These are the cuts Paul Ryan has been dreaming of making since long before the ACA ever became law.)

However, despite all of the talk about the Senate writing its own bill, as a technical matter they are writing a substitute, not a truly new bill. The difference matters. Whatever changes the Senate makes cannot have any less of a net deficit reduction than the House. If the Senate wants to fix the Medicaid section, or for that matter, do better than the House with respect to premium tax credits, they also have to come up with the money – either by scaling down the tax cuts for the rich or by coming up with new spending offsets.

While a few Senators have expressed the opinion that most of the ACA taxes need to stay to pay for coverage, any move in this direction would probably lose at least all three of the farthest right members, and probably many more. Coming up with a new offset is hardly any easier, and could be even more problematic.

Senators who object to the Medicaid provisions of the bill have mainly expressed concerns about the timing of the phase out of the enhanced match for the Medicaid expansion. But if they seek to delay the phase out (let alone restore the enhanced match), the most likely place for them to go for an offset would be to cut the core Medicaid program even MORE. This would be a bad deal for beneficiaries. The end result would be that the expansion still goes away while the additional Medicaid cuts make things worse for seniors, people with disabilities and low-income families.

Added to these problems is the fact that not many Republican Senators are up for reelection in 2018, which may attenuate their sensitivity to voters concerns.

Keep up the pressure!

Although the situation is serious, it is by no means hopeless. It is likely that at least two Senators are already locked into opposition, (probably one from each camp – Collins and Paul). It only takes one more dissenter from the moderate wing to force changes. In addition, a new CBO score will remind senators and the public just how bad this bill is. Finally, the opposition was still gathering steam as the House vote was taking place. We cannot discount the breadth and power of this opposition.

To sum up, making improvements in the AHCA in the Senate will be much harder than many people imagine, but it is not impossible. Now is the time to redouble our efforts to mobilize resistance to the current legislation if we are going to avoid a catastrophic rollback of health and economic security.  

With thanks to Quynh Chi Nguyen, policy analyst, for her assistance.

Movie sequels often fail to live up to the original, and Republicans' effort to repeal the ACA falls into this familiar pattern. As bad as the original was (and it was really bad), the sequel was even worse. Not content with taking health insurance away from 24 million people, increasing premiums and out-of-pocket costs for millions more, fundamentally undermining the Medicaid program, and shifting new costs onto states and providers, last week the Trump administration and House leaders continued to try to undermine health care coverage.

Fortunately, the revised proposal was quickly rejected and "pulled from the theatre." Republican lawmakers left town with nothing more to show for their flurry of activity than what appears to be a face-saving effort to get themselves out of the corner they painted themselves into when they attacked the idea of reinsurance as an "insurance industry bailout" by renaming it an "invisible high risk pool".

As much as this was a short-lived effort to bring the bill back to the floor, it contains two critical lessons:

First, if this was not already clear enough, President Trump's commitments on health care are meaningless. The huge gulf between his words and actions has been laid bare for everyone who doesn't have blinders on to see. Despite promising otherwise during the campaign, the original ACHA, which the Trump administration enthusiastically embraced, included a massive cut to Medicaid and even a cut to Medicare. It also undermined the insurance market reforms Trump promised to preserve by allowing states to waive Essential Health Benefits.

The EHB changes already in the AHCA would have undercut the ban on pre-existing condition exclusions by allowing the sale of insurance that excludes coverage for specific benefits or diseases while also exposing people to uncapped out-of-pocket charges. The proposed change in the rating rules would compound this by allowing insurers to charge people more based on their health status. These are devious proposals: while a guaranteed right to purchase would nominally remain, it would be virtually useless since insurers could charge sicker people such high premiums that coverage is priced out of reach.

Fortunately, the new deal collapsed for the same reason as the old one -- it was caught in a squeeze between the demands of the Freedom Caucus, which seeks an even more drastic rollback, and the outrage of an activated populace determined not to allow their health care to be stripped away.

Second, as in the typical horror flick, the monster can return from the dead multiple times. Despite the first failure, the House made a second effort, driven by the Trump administration, which again demanded they put a bill on the floor before April recess.

In a strange way, this abortive effort did us a favor. If anyone was feeling complacent after the collapse of the AHCA, the revived effort should have put people on notice. While the public outcry and GOP infighting have dealt ACA and Medicaid entitlement repeal a setback, the effort is far from dead. We should expect an effort to bring a bill back to the House floor in May, following the debate on spending for the remainder of 2017, which will occur in late April, and prepare accordingly. 

More Dragons on the Road Ahead

The AHCA, in whatever metastasized form, is not the only threat. Even if Republicans in Congress abandon a straight repeal effort, there are several other critical danger points. If, and when, Congress turns its attention to taxes, they are likely to need spending offsets to pay for (wait for it…) tax cuts for the rich. That could lead lawmakers back to looking at Medicaid (or the ACA) as a pay-for. Similarly, an effort to increase military spending might also create a hunt for spending offsets and put Medicaid and/or the ACA back on the chopping block. CHIP refinancing presents another "opportunity" for lawmakers predisposed to undermining the Medicaid financing structure.

Perhaps even more dangerous than these various legislative threats is the damage Congress and the Trump administration could inflict upon the ACA through both harmful actions and "malign neglect.” By creating a climate of uncertainty about the "rules of the road," including whether they will finance cost-sharing reductions and enforce the individual mandate, we can expect more insurance carriers to drop out of the Marketplace. This could leave more counties with only one option - and others with none at all (at least temporarily). Coupled with this uncertainty, and in the absence of action to improve the risk pool or a commitment to a robust enrollment push, we expect many insurers that stay in the Marketplace could seek another year of large rate increases. This could reverse the surge in popular support for the ACA and fuel the "ACA is broken" narrative.

To be very clear, ACA defenders are in a much stronger position after the defeat of the AHCA in the House, and there are plenty of things Congress or the states could do to lower premiums and cost-sharing and expand coverage, if they are so inclined. However, the bottom line is attacks on our health security are not going to subside any time soon. If people want to keep their health care, they are going to have to keep fighting to defend it. In other words, the only way to make sure this zombie stays in the ground is to keep shoveling dirt on the grave.

With thanks to Quynh Chi Nguyen, policy analyst, for her assistance.

There are already reams of postmortems about last week’s collapse of the drive to repeal the Affordable Care Act. It will probably become a case study for students of policy and politics (file under "what not to do"). Nevertheless, with the benefit of a few days of reflection, we can reach some good conclusions about what went down and draw some lessons for the future.

Why Did the AHCA Fail?

There is no shortage of figures to credit (or blame, depending on your point of view) for the demise of the American Health Care Act (AHCA): Democrats (in general and former Obama officials, in particular); the Freedom Caucus in the House; House Speaker Paul Ryan; the organizers at MoveOn and Indivisible; the Trump administration's own incompetence; and even the GEICO lizard. So, what really killed the AHCA?

There is some truth in the answer "all of the above" (well, maybe not the lizard). Part of the reason is indeed the division within the Republican Party and the extremism and intransigence of many of its members. The reason GOP party leaders did not have a workable replacement plan ready to go by now should be obvious, and it is not solely because there was no point in doing the heavy policy and political lifting while Obama was president. Republican political leaders didn’t have a replacement plan ready because a large segment of the party is unwilling to confront the fact that the pillars of the ACA – competitive private insurance markets, tax credits for affordability and some kind of hedge against free-riding/ adverse selection--are essentially Republican health policy.

Even the minimal inclusion of these elements in AHCA, sweetened with big tax cuts for the rich and a big Medicaid cut, were too much for the Freedom Caucus. This is the same group of extremists that shut down the government back in 2013 and drove John Boehner (who must be laughing his head off) from the speakership.

In an effort to appease this faction, the “finished product” that almost reached the House floor didn’t stop with cutting the tax credits and Medicaid coverage the ACA provided. It undermined care for millions of children, seniors and people with disabilities, included a whopping premium increase for older adults and created a new opportunity for insurers to deny coverage to people with many serious and chronic conditions. “Trumpcare” (or “Ryancare,” if you prefer) was also a major economic blow to providers of care and state budgets. In short, it was not just an attack on the health and economic security of millions of people, it was a full-frontal assault on an economic sector that accounts for millions of jobs and about one-sixth of all the economic activity in the country.

But blaming the Freedom Caucus lets too many others off the hook. Let’s not forget that Speaker Ryan was actually the chief architect of the bill, which the Trump administration enthusiastically embraced.

This Is What Democracy Looks Like

Intra-party infighting has gotten a lot of press coverage, but it is only part of the story, and not the most important part. The rapid mobilization of opposition was critical. It forced Republican leaders to abandon their "repeal and delay" strategy and put an alternative to the ACA on the table. Once people got a good look at “replace” – 24 million losing coverage, $880 billion in reduced federal support to states, job losses, higher out-of-pocket costs – and heard the compelling stories of people whose health and lives would be in jeopardy, thousands took to the streets and flooded the Congressional switchboard in protest.

Nor was this just a victory of the "left" or a small set of organizations or individuals. It was a victory for an ideologically heterogeneous public engaging in civic action to stop a narrow faction of extremists bent on undermining their health care. You cannot mobilize people around something about which they do not care. Fortunately, people care about health care. Above all, as David Brooks succinctly summed up, “The Republican Health Care bill failed because it was a bad bill that had almost no authentic public support. It took benefits away from tens of millions of vulnerable people in order to give tax breaks to the rich few.” It turns out that health care is too important and too personal to be used as a stalking horse for a big tax cut for the rich.

What Were They Thinking?

In hindsight, it is less remarkable that the American people soundly rejected this atrocious legislation and more surprising that its backers had the gall to bring it forward in the first place. However, despite this ignominious defeat, there is no indication that Trump or the Congressional Republicans have shifted into genuine problem-solving mode. They are still wedded to their narrative about how terrible the ACA is and unwilling to make peace with the idea that everyone should have access to affordable, meaningful coverage. Moreover, they are still scheming to bring another terrible repeal bill back to the floor or to undermine the ACA via administrative means.

No Time for a Victory Lap

In recent days, Speaker Ryan has indicated that he is not giving up his dream of cutting people off health care, which he has nursed since his frat-party days. And HHS Secretary Price has refused to commit to effective implementation of the law. Faced with all of these threats, there is a real risk that insurers will either pull out of the program or demand another big premium increase as a hedge against the uncertainty. Activists must be prepared to expose and push back against the next wave of attacks. But we must also do more.

Despite the gains made by the ACA, there are real problems in our health care system. These problems demand real fixes, not a toxic stew of tax cuts and ideologically driven nostrums that will make things worse, not better.

That means we need to advance policies to ensure adequate choice of plans, help the people who still cannot afford their premiums and reduce high cost sharing especially for people with chronic conditions that will cause them to hit their out-of-pocket maximum year after year. We need to confront the persistent racial disparities in health coverage and outcomes. We also need to address issues the ACA left unaddressed, such as high drug prices and inadequate coverage for services that allow older adults to stay in their homes.

Making progress on these fronts will require us to internalize two important lessons from recent events.

First, be prepared. While prospects for progressive action in Washington, DC and in many states may look dim right now, articulating a vision of what we are for and doing the policy work to back it up will help us make the most of opportunity when it arrives. Being prepared also means talking to the public to ensure that the proposals we advance have popular support.

Second, build unity. Democrats were greatly aided by their unity in opposition to AHCA, as were Republicans when they were in the opposition. However, building unity around what you are for is much harder than building it around what you are against, as we just saw. A lot of work went into building not just the policy but the political consensus that resulted in passage of the ACA and it extended far beyond elected officials. That consensus, which also led to the defeat of AHCA, included a broad swath of consumer, civic, faith and patient advocacy organizations, as well as most other health care stakeholders. We need similar unity now to advance solutions that address the real pressing problems we still confront.

The recent debate has shown that people are hungry for real solutions to their health care problems, not snake oil falsely marketed as “patient-centered” care. Our task in the weeks and months ahead is to build momentum for the former while continuing to defend against the latter.

 

I would venture to guess that congressmen Paul Ryan and Joe Kennedy don't agree on too much, but one thing they do appear to agree on is that the ineptly named American Health Care Act (aka Trumpcare) is first and foremost a bill about cutting taxes. Ryan trumpeted the bill as a $1 trillion tax cut and seemed entirely unfazed by the fact that the beneficiaries of the tax break were overwhelmingly the richest households and big drug and insurance corporations. Meanwhile, Rep. Kennedy denounced the bill as "a tax cut wrapped up as health care" and called it "an act of malice rather than mercy" in a statement that went viral on YouTube.

And the Congressional Budget Office (CBO) has made it crystal clear who would pay for that tax cut: working families and especially older adults and people with disabilities. CBO projects that should AHCA become law, 24 million people would lose their health insurance – that's 80 percent of the number projected to lose coverage with a full repeal of the ACA. The financial assistance that makes coverage affordable for people who lack employer-sponsored insurance would be cut almost in half and would be restructured in a way that provides more assistance for the middle class but dramatically scales back help for people with more modest incomes.

Promises Made, Promises Broken

Ironically, the biggest losers under Trumpcare are the voters who provided President Trump with critical support during the election. For example, A 60-year-old person with an income of $30,000 would see her or his assistance shrink by an average of $6,000 per year. Many Trump supporters are now nervous that their coverage will be taken away, but in the face of all evidence to the contrary, some still cling to the hope that their candidate will not abandon them.  (Adding insult to injury for older adults, Trumpcare undermines Medicare's financial stability, despite Trump’s repeated promises not to cut the program. And the President’s budget called for eliminating federal funding for the meals on wheels program, among many other domestic program cuts.)

However, the greatest damage of Trumpcare may not be to the non-group insurance market, but to the Medicaid program. Notwithstanding his campaign promises, the legislation that Trump is backing "1,000 percent" would cut $880 billion in federal support for Medicaid. Cutting Medicaid would apparently fulfill a dream Paul Ryan has had ever since he was attending college keg parties… But the consequences for children and families, people with disabilities and seniors, should his dream become a reality, are serious. Capped funding would put states in a financial straightjacket, making it harder for them to meet the growing need for long-term services and supports or to respond to a disease outbreak like Zika or address the opioid addiction epidemic. Trumpcare would also force most states to abandon the recent expansion of Medicaid to more low-income adults.

Things Will Get Worse Before They Get Better

Not satisfied with inflicting all of these coverage losses, the most conservative members of the House are trying to make the bill even worse, and seem to be succeeding, at least for now. As the bill made its way through the Budget Committee, the committee took non-binding votes in favor of a more rapid phase-out of Medicaid funding for the 31 states that expanded the program under the ACA, making eligibility for non-disabled adults contingent on work and giving states more power to eliminate benefits or services for Medicaid beneficiaries. It is likely that some or all of these ideas will get converted into amendments in the House Rules committee where the bill is heading later this week before it goes to the floor.

While House leaders are trying to project confidence, the fate of the legislation in the House (let alone the Senate) is still unclear. Many of the most far-right members of the Republican House are still not on board. At the same time, changes meant to appease them could force some of the party's more moderate members – especially those in districts carried by Hillary Clinton – to think twice before voting to support a bill that would increase costs and cut coverage for thousands of their constituents. Many are unhappy with being asked to take a tough vote for a bill that could die or get substantially reworked in the Senate, and some have come out in opposition. Speaker Ryan is trying to keep these members on board by providing some additional help to older adults, but whether this will be enough to secure passage for the legislation in the face of opposition from health care providers, governors and concerned constituents remains to be seen.

Reviews are in on the House GOP health care plan, which has been enthusiastically embraced by President Trump, and they are pretty terrible. The plan has been panned by nurses, doctors, hospitals and insurers as well as organizations representing older adults, cancer patients and others. But don't take their word for it, most of the conservative health policy establishment also gives the bill a failing grade. Setting aside the far right ideologues (who also hate the bill, but for different reasons) ACA critics have, among other things, called the plan "worse than Obamacare itself" and say there is "little doubt it will price millions out of the health care market".

Our dystopian health care future under ACHA

Thanks to the ACA, the percentage of uninsured people in the U.S. has dropped to an all-time low. But that progress would be reversed under the GOP’s proposed plan. The Brookings Institute estimates that 15 million people would lose coverage. The combination of reduced tax credits, increased out-of-pocket costs and weak incentives to enroll would touch off an adverse selection spiral that would push premiums higher and cause even more people to drop coverage.

These changes are only the tip of the iceberg. Cuts to the Medicaid program would also force millions more to lose coverage. Cuts to Planned Parenthood would result in an increase in unplanned pregnancies and a significant decrease in health care access for millions of women and LGBTQ people. As the dominoes continue to fall, providers would begin to see revenue go down as uncompensated care costs rise, leading to service cutbacks, layoffs and in some cases, especially in rural communities, hospitals would be at a heightened risk of closure. Resources to combat the opioid crisis would be lost and states' capacity to finance long term care for older adults and people with disabilities would be undermined just as the need increases due to the aging of the baby-boom generation.

It would only get worse as it moves through the House (if it does). The bulk of the discussion in the House has been with the far-right Republican Study Committee and even farther right Freedom Caucus who are demanding more cuts to the Medicaid program. With only 22 votes to spare, it is likely that Speaker Ryan will accommodate their demands and Pres. Trump has already signaled that he is on board.

Why is the bill so bad?

Why have the Republicans produced such a bill so bad that even their own policy experts think it is a disaster? The answer is that the repeal and replace debate has always been a political exercise driven more than anything else by the needs of far-right House members in deep red districts. Their biggest fear is that what happened to Eric Cantor (a successful primary challenge from the right in case you forgot) will happen to them. Their goal is to vote on a bill that hews as closely as possible to the Heritage Action orthodoxy. Whether that bill actually offers a framework for workable health policy or even whether it ever becomes law are secondary concerns.

And while House districts are becoming less ideologically diverse, the bill that is emerging is very bad for a number of states with key Republican Senators.

Consider West Virginia; the state has seen one of the biggest drops in the percentage of uninsured in the country thanks to both Medicaid expansion and ACA tax credits. Additionally, there has been a huge expansion in access to treatment for substance use disorders. As a relatively rural state, both West Virginia’s hospitals and rural consumers would be big losers as coverage declines.

Or consider Alaska; no state in the country would feel a bigger impact from the rollback of health insurance tax credits. On average people in Alaska would receive $10,000 less than they do now.

Or take Arizona, a state with a lot of early retirees and a rapidly growing elderly population. Proposals to increase insurance costs for older adults and cut funding for Medicare could prove very unpopular. And a squeeze on Medicaid funding would undermine the state's successful Medicaid expansion as well as its ability to finance long term services and supports for its aging population.

Maine is in a similar situation even though it did not take up the Medicaid expansion. With the oldest median age population in the country as well as being a relatively low-income state, increases in insurance costs for older adults and decreased Medicaid funding would hit the state hard.

It's no wonder that senators from these states have expressed reservations about the emerging legislation. And it is still unclear that, given differing political dynamics between the House and the Senate, there is enough common ground between the two branches to get a bill through.

Sen. McConnell is a skillful and determined party leader, but success of a bill with consequences as disastrous as this one be might actually be worse for Republicans than failure. Pres. Trump has already put Plan B on the table -- let it (cause it) to fail and blame the Democrats. While they would never admit it openly, some Republican Party leaders may secretly prefer continuing to have a weakened ACA to kick around for a couple more years. If they succeed in passing a law, then they would own the consequences of Trumpcare and it ain't going to be pretty.

All this suggests that the debate over the direction of health policy is far from over regardless of the outcome of ACA repeal efforts over the next few weeks. If a bill passes, Republicans will feel a need to put lipstick on the pig (an effort that will probably be much better financed than defense of the ACA ever was). However, as coverage declines and the effects ripple through providers, state budgets and communities across the country, it will be hard for them to escape the blame. If the legislation fails, expect ongoing efforts to undermine the ACA through administrative action (and inaction) along with efforts to pin the blame for the resulting problems on the law itself. Either way expect the fight to carry right into the 2018 election.

Although it will undoubtedly undergo further revisions, we now have a pretty clear idea of what the House Republican health plan entails. At the same time, House and Senate leadership's political strategy has also come into focus.

With new information about both the policy and the politics, we can now answer the questions I posed last week: How will the Republican leadership plans solve the interlocking problems of getting their budget numbers to work and securing a majority in both houses of Congress without running into a firestorm of public opposition.

Let's take these questions in order.

Wealthy are winners, low- and moderate- income and older adults are losers

There is a two-part solution to the question of how to fill the budget hole created by the Republican commitment to give big tax breaks to corporations and high-income households. First, "replace" as little of the ACA as possible to keep spending down. So, although refundable tax credits are part of the Republican plan, the tax credits are much smaller than the ones in the ACA. As a result, individuals would on average pay an additional $2,400 and family costs would increase by over $4,000.

Two groups are particularly disadvantaged by the tax credit structure, which adjusts for age but not for income. The first is lower-income people of all ages – many will find that either they cannot afford coverage at all, or that a plan with affordable premiums comes with such high cost-sharing that it is not worth it. Since there would no longer be any penalty for being uninsured, many healthy lower-income individuals would simply go without coverage.

The second big group that gets hurt is older adults. Under the House plan, tax credits for the oldest enrollees would be twice as high as for the youngest, but premiums could be five times higher or even more at the discretion of states. That would again force many people to drop coverage. So, smaller credits and fewer enrollees means less spending to offset less revenue.

Shifting costs onto states, providers and Medicaid beneficiaries

The other part of the solution is to take a giant bite out of Medicaid. First, the Republican plan phases out the ACA's enhanced match for the Medicaid expansion population. While states would still be allowed to cover this group, it would cost them much more to do so. Secondly and even worse, there would be a huge reduction in federal support for the core Medicaid program that covers low-income children and parents, people with disabilities and seniors.

The version of the House bill that leaked last week capped federal matching payments for Medicaid beneficiaries but proposed to increase the cap at the rate of medical inflation plus 1 percentage point. While this could still cause a lot of problems for specific states and beneficiaries, this is actually higher than the average growth rate per Medicaid beneficiary (hence not generating a lot of savings). The new proposal reduces the growth rate of the cap to Medical CPI, but this is unlikely to be the final word. Of course, there is no CBO score, so what happens if the numbers still don't balance? Simply go back and cut Medicaid some more.

Damn the torpedoes, full speed ahead

So much for problem number one. What about problems two and three: public opposition and not enough votes in the Senate or the House (or both)? This is where secrecy and speed come in. Speaker Ryan and Leader McConnell are trying to jam legislation through their respective chambers before either the members, the voters or other stakeholders, including providers and governors, can figure out what is in it. That's why there was so much effort to keep the text secret until the last minute, why there will be no hearings, and why the committees are not bothering to wait for analysis from CBO, the CMS actuary or outside experts. The extensive damage the bill will cause will become clearer and clearer the more time the bill hangs out there, as will the disconnect between Trump's often repeated promises of affordable coverage for all and the reality of millions losing their coverage and rising out-of-pocket costs.

Will it work?

While we should not underestimate the pressure that party leaders can put on the rank and file to fall in line, the outcome of this debate is by no means settled. On the far-right, members are complaining that the leadership proposal does not repeal enough of the ACA and outside groups are mobilizing against the plan. Many employers also oppose the plan because in addition to the benefit cuts, it caps the income tax exclusion for employer-provided health benefits. And the deep cuts to Medicaid may be too much for governors of either party to swallow while adding new constituencies among both consumers and providers to the ranks of the opposition.

...Not if we can help it

Grassroots opposition has already had a dramatic impact on both the timing and the content of the health care debate this year. Additional pressure is needed now to slow down the renewed rush to dismantle health coverage for millions of people and force Congress to go back home and face the voters again in April before they take a final vote.

As Republicans struggle to come to agreement on how far to go with ACA repeal and what to put in its place, they are confronted with three interlocking math problems: first, how to make their budget numbers add up; second, how to put together a proposal that can command a majority in both the House and the Senate; and third, how to avoid running afoul of public opinion.

Where to Start?

Let's start with the budget problem. The budget reconciliation instruction only requires Congress to save $2 billion over 10 years, which is barely even rounding error in the context of overall federal health spending. It should be easy, right? But the complications begin immediately with the Republican commitment to repeal the taxes that helped pay for the expanded benefits in the ACA.

How to plug that hole? In the good old days of "repeal and delay" (about a month ago), you simply wiped out all of the ACA spending – including both the tax credits for marketplace coverage and all of the Medicaid expansion funds – and made some vague promises about fixing it later, someday, maybe (not!). But “repeal and delay” ran aground on the other two problems – public opinion, which is strongly against it (only 18 percent support this course), and that constituents have not been shy about making their objections known to their members of Congress.

As a result, there aren't enough votes to pass repeal and delay, so GOP leadership is in need of some kind of replacement plan. That replacement plan has to make good on Republican commitments to preserve access to coverage for people with pre-existing conditions and also has to avoid yanking Medicaid coverage (and funding) away from states. But preserving funding for the Medicaid expansion (even if the federal matching rate phases down over time) and creating a substitute for the ACA tax credits, even at reduced levels, eats up some of your savings, so you are still left with a budget hole.

How big a hole depends on how much of the expansion funding is preserved and how adequate are the new tax credits. The greater the funding preserved, the bigger the budget hole. But proposals to shrink the funding have fueled opposition in states that have benefited from the Medicaid expansion, including 16 states with Republican governors. It would also cause the number of uninsured to spike and do little to allay the public's fear that people with pre-existing conditions will again be locked out of the insurance market. 

A notable feature of the recently leaked draft House repeal-and-replace plan is that it tries to address these problems by providing more funding for the Medicaid expansion and for subsidizing private insurance than did previous proposals, such as the one authored by now-HHS Secretary Tom Price. But because at least a portion of the ACA funding is preserved, a sizable budget hole remains, although we don't know how big because no CBO score has yet been made available.

Fixing a Hole?

How is this hole to be plugged? Again according to the leaked plan, there are two additional revenue sources. One, involves cuts to the core Medicaid program; the other involves changes to the tax exclusion for employer-sponsored insurance, in the sphere of the ACA's "Cadillac tax" that places an excise tax on the most expensive health plans. But both of these revenue sources immediately run into trouble with respect to math problems two and three, above. The "Cadillac tax" is wildly unpopular with both the public and in Congress, across party lines. It is not at all clear that a majority of members will repeal the Cadillac tax only to turn around and support replacing it with something that essentially does the same thing.

On the Medicaid front, the House proposal is to continue to provide states with enhanced matching funds through 2019, but only for those beneficiaries who are currently enrolled. New enrollees would receive only the regular match rate. Starting in 2020, states would receive a capped amount for each beneficiary. The proposal calls for this capped payment to grow at the rate of medical CPI plus one percentage point. It's not clear that this adjustment factor saves a lot of money. If not, it then doesn't do much to fill the budget hole (running into math problem one).

The House Medicaid proposal differs significantly from another leaked proposal, this one developed by a number of Republican governors. In particular, the governors do not want to be forced to assume increased risk for the cost of care for beneficiaries who are jointly eligible for Medicare and Medicaid. (The "dual eligibles" account for over one-third of all Medicaid spending.) At the same time, at least some Republican governors seem perfectly comfortable with substantial Medicaid funding cuts as long as they have increased freedom to cut people off of Medicaid and reduce benefits for those who remain. Of course, this would just shift costs onto providers and beneficiaries. In essence, perhaps in an effort to keep senior citizens, people with disabilities and the providers who serve them on the sidelines, the governors' plan boils down to massive eligibility and benefit cuts for non-disabled adults and children.

Especially if the votes aren't there for tackling the tax-exclusion, then the Medicaid cuts would have to be deeper – much deeper – than what is laid out in either of the leaked draft proposals.  And benefits would likely be even skimpier both for Medicaid beneficiaries and in the private market. An analysis of the replacement plan based on documents released by Speaker Ryan suggests that millions would lose coverage. Such draconian cuts in health coverage would spark even more public outcry and could erode support in both the House and Senate, even though one House leader called a decline in coverage "a good thing" (again, see math problems two and three, above).

All in all, once the "original sin" of repealing the ACA taxes is committed, solving all three "math problems" – i.e., finding a way to make the budget numbers work while keeping a majority of support lined up in both the House and the Senate and not enraging the voters – adds up to a monstrous headache for Speaker Ryan and Leader McConnell. (Sad!)  Perhaps that's why former House Speaker Boehner predicts that the Republican effort to repeal most of the ACA will ultimately fail.

Let's hope he is right.

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