Trumpcare’s Republican opponents are divided in their ideological objections to the bill. Conservatives want a health-care law that offers skimpier subsidies and fewer regulatory protections; moderates, generally, want the opposite.
But the Senate GOP’s dissidents share a common a political anxiety: They’ve spent years blaming Obamacare for unacceptably high premiums, and now they’re on the cusp of passing a bill that would do little to increase affordability for the young and affluent — while radically increasing the cost of insurance for older, lower-middle-class Americans.
Free-market fundamentalists like Ted Cruz and Mike Lee are convinced that this problem can be solved by gutting Obamacare’s protections for preexisting conditions and minimum standards for insurance benefits. Such measures would reduce premiums for typical consumers, but also radically diminish the quality of their coverage — a trade-off that voters haven’t clamored for, and that Donald Trump has portrayed as unnecessary. And then, of course, this kind of deregulation would be disastrous for people with expensive medical conditions, whose premiums would skyrocket as healthy consumers stopped subsidizing comprehensive plans.
Republican moderates, by contrast, are pretty sure that their bill is failing to make health care more affordable because it slashes hundreds of billions of dollars in insurance subsidies for the poor, so as to finance a tax cut for millionaire investors. And so they’re suggesting that maybe their party shouldn’t do that — or, at least, should do that a bit less.
Now, Ted Cruz thinks he may have discovered a way to reconcile these divergent proposals:
Here’s the Texas senator’s big idea, according to Vox:
As long as a health plan offered at least one Obamacare-compliant plan in a state, the plan would also be allowed to offer non-Obamacare-compliant plans in that state … If conservatives get that win on insurance regulations, they might be willing to accept fewer tax cuts for the wealthy in the bill. Smaller tax cuts would, in turn, free up more money for McConnell to spend on Medicaid and insurance subsidies for poor and middle-class Americans.
Cruz’s proposal makes some political sense: Moderates can say protections for those with preexisting conditions are being maintained, while conservatives can claim they’ve freed consumers from the tyranny of government regulation.
In policy terms, however, it’s just the abolition of protection for many with preexisting conditions by other means. The severely ill wouldn’t be denied access to the insurance market, but only in the sense that they are not, currently, denied access to Lamborghini dealerships.
Under Cruz’s model, many healthy consumers would avoid shelling out for high-cost, comprehensive plans. This would then make the pool of people willing to pay for such coverage disproportionately sick, which would cause the price of such plans to rise, which would make the pool even sicker, which cause prices to premiums to rise further, which would make the pool sicker still, on and on, in a death spiral, until the sick were priced out of the market completely.
The basic problem here is simple: If we’re going to be a society that doesn’t let the severely ill die preventable deaths because they aren’t rich, then we need to socialize the cost of their care. If we want don’t want to do that through high taxes and spending, then we need to do it through market regulations that force consumers to subsidize each other through premiums.
Obamacare’s great political achievement is that it has forced Republicans to concede, rhetorically, that letting the weak die isn’t an option.
And this puts the GOP’s die-hard deregulators in a bind: If they want freer markets, they need more socialized medicine.
In an interview with Vox, Cruz claims to have reconciled himself to this fact.
“If those with serious illnesses are going to be subsidized, and there is widespread agreement in Congress that they are going to be subsidized,” the Texas senator allowed, “I think far better for that to happen from direct tax revenue rather than forcing a bunch of other people to pay much higher premiums.”
The trouble for Cruz is that he’s just accidentally articulated the logic behind a single-payer health-care system — or, at the very least, made the case for radically higher levels of direct government spending on health-care than he or his party are ready to accept.
The Texas senator argues that people with preexisting conditions wouldn’t be priced out of the market because the size of Trumpcare’s subsidies would rise with the cost of their premiums. But there are two problems with idea.
First, this is a formula for radically increasing the fiscal costs of the bill’s tax credits — keeping coverage for the sick affordable without asking the healthy to share the cost is profoundly expensive.
Second, this would be a nightmare for the very people Republicans have insisted their crusade against Obamacare was meant to protect: The forgotten, middle-class folks who make just a bit too much to qualify for subsidies. These are the people who genuinely lost out from the Affordable Care Act. And Cruz’s proposal would effectively make it impossible for any such forgotten American with a preexisting condition to secure coverage.
In other words: The only way to lower the cost of insurance for the healthy, while maintaining affordable coverage for the (non-wealthy) sick — without taking measures to curb the reimbursement rates of doctors, hospitals, and drugmakers (which the GOP has shown no interest in doing) — is to increase government spending on health care above the levels set by Obama.
This is, of course, the opposite of what Republicans are trying to do.
So, Cruz’s proposal does not solve the substantive problems with Trumpcare. And it increases the risk that the legislation will run afoul of the Senate’s parliamentarian — to pass their bill with a simple majority, Republicans can only include provisions that have a direct impact on the budget. It is difficult to see how changes to the rules governing insurance markets would fulfill that requirement.
But the senator’s offer would let moderates and conservatives alike claim a symbolic victory — and avoid the ignominious prospect of working with Democrats to prop up Obamacare.
In President Trump’s America, it’s hard not to suspect that, in the end, spectacle will triumph over substance.