House Moderates Have a Bipartisan Health-Care Bill

Tom Reed and Josh Gottheimer. Photo: US House of Representatives

Ever since John McCain put Trumpcare back into a coma, congressional Republicans have been arguing about what, if anything, to do on health care. Some conservatives believe that they can still revive their party’s bid to repeal Obamacare — or, more precisely, to use Americans’ frustrations over high health-care costs as cover to retrench the welfare state. Senate leaders (reportedly) just want to euthanize Obamacare repeal and move on to cutting taxes on the wealthy and corporations.

And then, there are the few GOP lawmakers who are interested in lowering premiums for their constituents by passing small-bore, technocratic fixes to Obamacare (as opposed to trying to do so by sacrificing cancer patients’ regulatory protections on the altar of the almighty invisible hand).

A number of Republican senators have evinced interest in such an endeavor. And this week, a group of GOP moderates in the House joined Democrats in proposing a five-point plan for bipartisan health-care reform. In an op-ed for the New York Times Friday titled “Let’s Stop Bickering and Fix the Health Care System,” New York Republican Tom Reed and New Jersey Democrat Josh Gottheimer ouline the “Problem Solvers Caucus” proposal.

As that headline suggests, the editorial is written around the laughable premise that “both sides” are responsible for the current impasse over health-care reform. Reed and Gottheimer assert that Congress has failed to take action to contain premiums because Republicans have been hell-bent on repealing Obamacare, while Democrats have been intransigent about preserving the law as is, with “neither side willing to discuss anything in between.”

In reality, Democrats have long insisted that the Affordable Care Act needs tweaking, and have signaled an openness to working with moderate Republicans to pass deficit-neutral measures that would stabilize the Obamacare marketplaces. Which is to say: They’ve indicated that they are open to letting Trump (and his party) claim the political win of a bipartisan health care “deal,” in exchange for the progressive policy victory of consolidating Barack Obama’s signature law. In fact, the party’s primary think tank, the Center for American Progress, recently released a plan for bipartisan health reform that bears a similarity to (the better) portions of Reed and Gottheimer’s bill.

Republicans rebuffed this offer, and spent most of the past six months trying to gut Medicaid, erode protections for people with preexisting conditions, and cut taxes for the rich, in defiance of popular opinion, the wishes of every major stakeholder in the health-care system, and their own promises to their constituents. In other words, bickering ensued.

But whatever. We tell ourselves stories in order to legislate. If this framing provides Republicans with enough rhetorical insulation from cognitive dissonance to play ball on health care, so be it. And the Problem Solvers’ bill, itself, is built around a tacit acknowledgment that the biggest problem with Obamacare is its vulnerability to GOP sabotage.

The legislation’s first provision is to make Obamacare’s cost-sharing reductions — payments to insurance companies that defray losses incurred by covering the nonaffluent sick — mandatory. The lawmakers correctly note that uncertainty about the future of these payments is driving insurers to raise premiums. They gloss over the fact that this uncertainty only exists because congressional Republicans challenged the legality of the payments in court. A federal judge ruled in their favor, but allowed the Executive branch to continue making the payments, pending appeal. This has given the current GOP president the power to cut off the subsidies at will — one that Donald Trump has routinely threatened to use, for the explicit purpose of engineering a health-care crisis that (in his mind) would increase support for Obamacare repeal.

Regardless, the provision is sound policy, and would likely avert a double-digit-percentage increase in premiums. Reed and Gottheimer pair this proposal with one for a dedicated stability fund — essentially, money for reinsurance — that states could tap when their sickest residents amass medical bills that threaten to drive up premiums for everyone else. (This measure would also be less necessary were it not for the GOP’s attack on Obamacare’s “risk corridors”.)

The rest of the bill is composed of a medical device tax repeal and two bad but benign conservative health-care ideas.

The first is a loosening of Obamacare’s employer mandate, which requires companies with 50 employees or more to provide insurance to all who work 30 hours a week (or more). Reed and Gottheimer want those numbers changed to 500 and 40, respectively. This would likely result in a small increase in the uninsured rate.

The second conservative proposal is to give insurers the freedom to sell plans across state lines. This policy would be dangerous, if it weren’t totally ineffective.

Despite conservatives’ purported fondness for federalism, one of their favorite health-care reforms is an attack on states’ rights — specifically, on each state’s right to regulate its own health-insurance markets. Allowing insurers to sell across state lines would, in practice, mean allowing insurers in (loosely regulated) Mississippi to sell cheap, skimpy plans to New Yorkers, thereby nullifying the Empire State’s duly enacted benefit requirements. In other words: Republicans are proposing a race to the bottom that would allow red states to undermine insurance regulations all across the country.

Happily, no one actually wants to run that race. As the Upshot’s Margot Sanger-Katz explains, regulations themselves aren’t the binding barrier to selling insurance across state lines:

Selling insurance in a new region or state takes more than just getting a license and including all the locally required benefits. It also involves setting up favorable contracts with doctors and hospitals so that customers will be able to get access to health care. Establishing those networks of health care providers can be hard for new market entrants.

“The barriers to entry are not truly regulatory, they are financial and they are network,” said Sabrina Corlette, the director of the Georgetown University Health Policy Institute.

In 2012, Ms. Corlette and co-authors completed a study of a number of states that passed laws to allow out-of-state insurance sales. Not a single out-of-state insurer had taken them up on the offer. 

All things considered then, the Problem Solvers Caucus bill would likely be an improvement on the status quo. Of course, that doesn’t mean it’s politically viable.

On the one hand, now that the GOP has unified control of the federal government, the party has little incentive to deliberately make health care more expensive for its constituents. True, they’ve devoted most of this year to trying to do just that. But cutting Medicaid and Obamacare’s subsidies has a payoff for Republicans: Both clear up budgetary space for tax cuts. By contrast, a large spike in health-insurance premiums ahead of the 2018 midterms, induced by the president’s extortionate tweets, has no such upside. So, all else being equal, Republicans would probably be inclined to take the power to sabotage the individual market out of Donald Trump’s hands.

On the other hand, the GOP’s seven-year crusade to sabotage the Affordable Care Act wasn’t solely motivated by cold political calculation. Many big-dollar conservative donors believe it is morally reprehensible for the government to tax the passive income of the rich, so as to fund health care for the poor and working class. And their many failed attempts to roll back Medicare have taught them that voters do not share this view. A pragmatic, center-right lawmaker might see making Obamacare work better as the second-best option after “repeal and replace.” But for right-wing ideologues that’s the worst possible outcome: The point is to not make redistributive programs work better, but to make them dysfunctional, so as to undermine popular support for “big government.”

Given how they’ve handled health-care reform thus far, it’s difficult to see Paul Ryan or Mitch McConnell deciding they are more afraid of premium increases than of inviting the wrath of both the Koch brothers and their caucuses’ far-right factions.

There are, quite likely, majorities in both chambers to pass the Reed-Gottheimer bill, which already boasts 40 co-sponsors. But those majorities would (almost certainly) be composed of a large number of Democrats, and a small number of moderate Republicans. Thus, to allow such an endeavor to go forward would be to invite a conservative mutiny. And without Ryan’s blessing, the number of moderate Republicans willing to buck their co-partisans on health care is likely to be small, (as it was when the American Health Care Act reached the House floor).

All that said, Republicans are going to need Democratic votes to lift the debt ceiling this fall. And that could provide the donkey party with the leverage to demand Ryan & Co. appropriate the cost-sharing payments — while giving the GOP leadership an excuse to make policy that actually benefits the people they promised to serve.

House Moderates Have a Bipartisan Health-Care Bill