Is Senate GOP health care bill Obamacare-lite or progress?

Is Senate GOP health care bill Obamacare-lite or progress?

Thursday, Senate Republicans released their long-anticipated health care reform bill. We discussed highlights of the legislation here.

It’s worth reiterating that this bill is only the first step (so we’re told) in repealing and replacing Obamacare. The Senate GOP bill is limited in what it can accomplish for one reason — reconciliation. Senate Republicans are relying on the budget reconciliation mechanism to pass their first health care overhaul with a simple majority vote.

Reaction on the right has been mixed. Some are calling it one of the Republican’s greatest policy achievements and others are less than thrilled about kicking the Medicaid can down the road.

We’ve compiled reaction and analysis from some of the best health care policy minds on the right, starting with one of the best, Avik Roy.

Roy was a health care policy advisor for Mitt Romney, Rick Perry, and Marco Rubio’s presidenttial campaigns and runs The Apothecary blog at Forbes. He’s thrilled with the legislation, which happens to include means-tested, age-adjusted tax credits, a policy his think tank, The Foundation for Research on Equal Opportunity (FREOPP), has strongly advocated for. Age-adjusted tax credits are a departure from the House’s AHCA which instead utilized income-based tax credits.

Roy is thrilled with the Senate GOP plan for several reasons, most notably that it shifts health care back in the direction of the private consumer.

He explained his rational in more detail in this WaPo opinion piece, but here are the highlights:

The Senate bill contains a plethora of measures that will lower premiums and bring competition back to the market. In particular, the bill would end Obamacare’s destructive practice of massively overcharging young people for their coverage by overregulating the prices at which they can buy coverage. The bill provides resources to states that will help stabilize insurance markets, especially for vulnerable populations, in ways that will bring premiums down for the healthy.

The Senate bill repeals Obamacare’s Medicaid expansion — an expansion that has trapped more than 12 million people in a program that researchers have shown has health outcomes no better than being uninsured. In its stead, the Senate bill offers low-income Americans robust tax credits to buy affordable private health insurance, just as those formerly enrolled in Obamacare’s exchanges will be able to.

…

The Senate bill also substantially improves the structure of the tax credits in the House bill by adjusting their value to account for those who need more financial assistance due to ill health, old age or costly location.

The end result will be a thriving, consumer-driven individual insurance market, with as many as 30 million participants, available to the healthy and the sick and the young and the old, whose successes will lay the groundwork for future efforts at entitlement reform.

But that’s not to say that the Senate bill punts entitlement reform into future legislation. The bill not only replaces Obamacare; it also reforms the legacy Medicaid program by giving states the option of pursuing a block grant or a per-capita allotment for their Medicaid populations.

Block grants have long been a goal of conservative policy reformers; per-capita caps were first proposed by President Bill Clinton in 1995. Democrats are screaming about how per-capita caps will reduce Medicaid spending — by about 1 to 2 percent over the next decade — but they are silent about the dozens of tools that the Senate bill gives states to manage their Medicaid programs more efficiently and effectively.

Yuval Levin, former domestic policy staff advisor for the W administration, thinks the bill serves as proof that Republians might not be as eager to rid the country of Obamacare as they’ve claimed since its passage, even if it’s a better solution than its House counterpart. Levin also suggests that utlizing the reconcilliation mechanism might prove less limiting than we’ve been led to beleive.

He writes at NRO:

The case for repeal was strongest in the three or four years between the enactment and implementation of Obamacare. As more time passes since the beginning of implementation three and a half years ago, and more people’s lives become intertwined with the program for good and bad, the case for addressing Obamacare’s immense deficiencies by repeal weakens as a practical matter in favor of a case for taking them on by alteration.

I don’t think it has weakened as much as congressional Republicans do. And so I still think it is very much the case that the cause of good policy (almost regardless of your priorities in health care) would be better served by a repeal and replacement, with appropriate transition measures, than by this sort of tinkering—you’d get more coverage, a better health-financing system, and a more appropriate role for government.

Various conservative health-care wonks have proposed various ways of doing this over these seven years (I like this one, but I’m not objective, and most if not all would have made for serious improvements). Various Republican politicians have patted these wonks on the head and said “someday,” but everyone has understood that if and when an opportunity presented itself it would be shaped by its own unpredictable political exigencies.

At first this year, congressional leaders tended to describe these exigencies in terms of the limits of the reconciliation process. But with each step it has turned out that reconciliation can bear much more than they first suggested. It is surely a constraint, but if the bulk of this Senate bill passes muster under the Byrd rule then reconciliation is not nearly as tight a constraint as it was said to be a few months ago.

Levin also argues the Senate bill chips aware at the heart of Obamacare in a way the House’s AHCA did not:

But the biggest change from the House bill, and from Obamacare, might prove to be the way in which the Senate bill tries to give states regulatory flexibility and control over the individual insurance market. Here we see how more explicitly embracing the premise of this legislation—that Republicans are not repealing Obamacare, but they are addressing some of its biggest problems—can actually enable them to move more aggressively rather than less.

Reason’s Peter Suderman, who follows health care policy closely, was wholly unimpressed and panned the the Better Care Reconciliation Act of 2017 as little more an uninspired version of Obamacare or Obamacare-lite.

Suderman criticizes the bill as one that will ultimately continue to put the squeeze on middle-class families.

Taken on its own terms, this scheme undercuts the GOP’s complaints that Obamacare hurts the middle class. In addition to the higher deductibles, it creates a subsidy cliff for middle-class families purchasing health insurance on the individual market. Those who earn slightly too much to qualify for a subsidy would have to pay full price for health coverage that is increasingly expensive.

More generally, it represents a failure to think beyond the confines of the law that is already in place. At a fundamental level, the Senate plan accepts Obamacare’s premises about the nature of health insurance and the individual market. It works from the assumption that the only way to make expensive health insurance cheaper is to subsidize it through the federal government. It is a plan that subsidizes, and therefore disguises, unaffordability, rather than attempting to bring down costs directly.

Perhaps the Senate bill’s biggest departure from Obamacare is the way it would handle Medicaid. Like the House bill, the Senate plan would slowly roll back Obamacare’s Medicaid expansion over a period of years, converting Medicaid into a per-capita system in which federal matching funds are allocated on a per-person basis. It would delay the start of the phase out until 2021, scaling back funding for expansion enrollees a little more each year. In addition, starting in 2025, it would place a stricter cap on the growth of Medicaid spending than the House bill, limiting it to general inflation rather than medical inflation. In the long term, then, the Senate bill’s Medicaid cuts would be much deeper.

But even this suggests a resistance to act outside of the parameters already set by Obamacare. Not only is the phase-out slow, but the delays mean that it is susceptible to political reversals. As conservative health policy analyst Chris Jacobs wrote recently, any Medicaid rollback that is delayed until after 2020 essentially requires a Republican president to go into effect. The growth cap, meanwhile, is unlikely to happen unless a Republican wins the White House in 2024. The Medicaid provisions, like much of the bill, appear designed to frustrate nearly everyone. Backers of the expansion oppose the cuts, while critics will worry that they won’t happen at all.

The Medicaid provisions—and in particular the altered growth cap—may be best understood as budget gimmicks. On paper, the rollback reduces federal spending, generating estimates of budget savings inside the 10 year window that the Congressional Budget Office uses to score legislation. Those budget savings are necessary for Republicans to use the reconciliation process, but they assume that in the future, Congress will not reverse course. Given that many Republicans from Medicaid expansion states are wary of the rollback, and Democrats universally oppose it, this is far from certain.

Follow Kemberlee on Twitter @kemberleekaye

Donations tax deductible
to the full extent allowed by law.