Politics

Half Measures

Why is the GOP trying to do some of its favored health care reform changes and not others?

McCarthy, Ryan
Speaker of the House Paul Ryan and House Majority Leader Kevin McCarthy answer questions about the American Health Care Act in Washington on Wednesday.

Joshua Roberts/Reuters

As the American Health Care Act stands right now, it is mostly a large tax cut for the wealthy paid for with Medicaid cuts. That achieves two specific and real Republican goals. It does not, however, reform individual market health care policy in a way that would drive down costs and premiums for individuals, the ostensible and stated goal of health care reform. It gets halfway there, and then gives up.

House Republican leaders are blaming Senate rules for that. They have begun emphasizing that the AHCA is only the first of three steps in reforming health care. Under the Byrd Rule, the provisions in reconciliation bills—which the Senate can pass without a 60-vote filibuster—must directly affect the budget. Items in the AHCA like cutting taxes, wiping out the individual mandate tax penalty, or cutting Medicaid would directly affect the budget. Republicans can pass those on a party-line vote with their slim Senate majority, assuming they ever resolve their own internal disputes.

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The next two phases of the plan, however, are designed to achieve the policy reforms that Republicans want but that the Senate won’t allow for in reconciliation. Specifically, Health and Human Services Secretary Tom Price wants authority to loosen regulations, and Republicans want to pass further deregulations in Congress. But, under current rules, they’d need every Senate Republican as well as eight Democrats to enact their regulatory changes.

“I would love the idea that we could repeal and replace exactly how we would want to” in the reconciliation bill alone, House Majority Leader Kevin McCarthy said at a press conference Friday morning acknowledging frustrations from conservatives about the limits Senate rules impose on them. McCarthy said it was “unfortunate” that the desires of the House were bound by the rules of the Senate, as our bicameral legislative body has historically functioned.

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House members getting snippy over constraints and badgering Senate colleagues to discard their precious gentleman’s rules is a regular facet of every reconciliation process. But the text of the AHCA as it now stands already appears to include items that could run afoul of the Byrd Rule. If the Byrd Rule governed what Republican leaders decided they could and couldn’t put into the text, then they did a sloppy job of following it. Those contradictions in the text make it harder for its messengers to promote. What kind of bill, exactly, are they selling?

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There are currently three specific items in the AHCA that don’t seem compatible with Senate reconciliation rules. The continuous coverage provision assesses a premium surcharge for those who enroll in plans after long lapses without insurance. This is not a tax like the individual mandate, the item it’s intended to replace. The surcharge is a penalty paid to the insurer. So, that’s a market regulation. The bill also eliminates the bronze, silver, gold, and platinum actuarial value tiers for health insurance plans offered on the exchanges. That is a market deregulation. Finally, the bill loosens the Affordable Care Act’s “age bands,” allowing insurers to sell older people plans at five times the cost it would sell to younger people rather than the three times that the ACA allows. That is a market deregulation.

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These three items belie the argument that other policy provisions that conservatives say they want couldn’t be in the bill because they don’t directly affect the budget. As National Review’s Yuval Levin writes, the AHCA “isn’t quite sure how aggressive to be about the Senate’s procedural rules.”

What is so budget-y about these three items that couldn’t be said of, say, getting rid of the ACA’s essential health benefits requirements? This is the provision mandating that qualifying insurance plans cover a set of 10 particular benefit areas. Republicans of various stripes want to weaken if not eliminate these requirements outright, seeing them as Washington issuing “one-size-fits-all” decrees rather than allowing consumers to tailor their plans around the benefits that suit them. That would be a market deregulation but no more so than any of the other market deregulations in the current legislation.

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The Feb. 10 draft reconciliation bill that leaked a couple of weeks ago did sunset the ACA’s essential health benefits, but the released bill only applied the sunset to Medicaid plans. An aide with the House Energy and Commerce Committee told me that the language in the draft was only included to solicit “feedback” as to the language, maybe for a later bill, and was never seriously considered to be in the reconciliation package because of the Byrd Rule. But why not try anyway, if the bill is already playing footsie with Senate rules? Why not try throwing other deregulatory measures, like allowing insurers to sell across state lines, in the bill?

This is where the American Health Care Act stops making sense. It’s easy to understand why Republicans get rid of a bunch of taxes. It’s easy to understand why Republicans chop up Medicaid. It’s much harder to see why Republicans would choose to include some rules-defying policy measures in the bill but abstain from including others, saving them to be filibustered at a later date.

Republican leaders want to sell a vision of health care reform through market deregulation, but the item they’re selling is tax cuts and entitlement reform. And then, for mysterious reasons, they toss in a tease of individual market policy changes that could be stripped out in the Senate. If conservatives protesting the bill want leaders to try moving more policy changes through reconciliation, how can leaders say no on procedural grounds when they’ve already dipped a toe in these waters?

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