As expected, Paul Ryan has released a sweeping proposal—the American Health Care Act—to remake the U.S. health care system. Also as expected, lots of people hate it. What’s somewhat more surprising is that so many Republicans seem to hate it.
Why won’t the GOP line up behind the party’s Obamacare replacement? The basic story is that ideological purists don’t like the fact that the House proposal creates a new system of refundable tax credits, which they see as tantamount to socialism. Meanwhile, Republican pragmatists from states that expanded Medicaid under Obamacare are afraid that Ryan’s overhaul will leave many of their low-income constituents high and dry. The disagreement between these two positions is ultimately a matter of political calculation. The purists, most of whom are from solidly Republican constituencies, see getting rid of Obamacare root and branch as the mission their voters sent them to Congress to accomplish, and they want to do it even if it means millions of insurance policies get canceled and swing voters go nuts. The pragmatists, who tend to be drawn from more competitive districts and states, don’t want to push things quite so far.
Normally you’d expect members of the same party to hammer out an agreement. The purists would recognize that the pragmatists need to win their races if the GOP is going to retain control of the House and Senate, and so they’d find a way to work together. That’s exactly the kind of deal Ryan is trying to forge. The problem is that the intra-Republican compromise he’s devised doesn’t make anyone happy. That’s because, to put it bluntly, Republicans have policy goals that simply can’t be achieved.
David A. Hopkins, a political scientist at Boston College, offers an elegant explanation. While the Democratic Party functions as a coalition of discrete social groups, each of which wants government to help address various problems, the GOP functions more as the agent of the conservative ideological movement. This is not to say that Democrats are never ideological. Far from it. It’s just that ideological liberals who, say, would have greatly preferred Medicare-for-all over the kludgy, compromised mess that is the Affordable Care Act weren’t willing to sink Obamacare because it was an affront to their deeply held beliefs. Instead, they sucked it up and backed the president’s health care plan, thinking it would deliver real-world benefits to their constituents. There were plenty of ideological liberals who hated having to cut deals with insurers and pharmaceutical companies and the hospital lobby yet were willing to do just that to achieve their goal of expanding coverage. Republicans, in contrast, have devoted almost no effort to placating industry stakeholders in the health sector—a sector that accounts for roughly 18 percent of GDP, by the way—nor are they delivering much in the way of tangible benefits to rank-and-file Republican voters.
It’s not that GOP lawmakers simply do the bidding of the rich, as many on the left maintain. As Hopkins notes, that explanation doesn’t explain the particulars of the Ryan bill: “The rich do benefit by receiving a large tax cut, but if Republicans only cared about that issue they would have chosen to pursue a politically easier path of merely cutting taxes on the wealthy while leaving health care alone.” There is something deeper at work, and Hopkins puts his finger on it.
Unlike ideological liberals, ideological conservatives aren’t interested in empowering the federal government to solve the problems of this or that constituency. Rather, their ultimate goal is to get the federal government out of the problem-solving business, on the grounds that problems are best solved by individuals; families; communities; and, in a pinch, state and local governments, with at most an occasional assist from the federal leviathan. This is, of course, a far cry from the status quo. The federal government is vast, and its tentacles extend into every nook and cranny of American life, whether through direct expenditures or regulations and targeted tax breaks. For ideological conservatives, the challenge is to reconcile a government-shrinking agenda with the inescapable fact that most voters are profoundly risk-averse and thus reluctant to shrink government programs that might benefit them or, for that matter, anyone who could be seen in a sympathetic light.
Ideological conservatives have spent decades trying to roll back the expansion of government, with almost no success. Most often, they’ve acquiesced to more modest expansions of government in the hopes of heading off the much bigger ones sought by their ideological rivals. Welfare reform, for instance, is occasionally cited as a government-shrinking success. The truth, however, is that welfare reform substituted one set of government social programs (cash transfers to poor households) with a different set of government social programs (refundable tax credits designed to make work pay and expanded access to subsidized medical care, among other things). For the next 20 years or so, the prospects for shrinking government will be even less auspicious, as an aging population all but guarantees that federal expenditures on Medicare, Medicaid, and Social Security—three of the most popular programs in America, all of which have long enjoyed bipartisan support—will soar. Tyler Cowen has provocatively argued that slowing down the expansion of government is the best those of a libertarian bent can do. In the medium term, at least, it’s hard to disagree with that assessment.
Where does this leave the ideological right? I see two possibilities. Ross Douthat of the New York Times has outlined the ways in which Trump’s vision of the GOP as a “workers party” could offer a way forward that is not so wedded to the cause of shrinking government. Essentially, the idea would be for Republicans to be a bit less zealously ideological and a bit more attuned to their constituents’ real-world interests. I believe this is a perfectly sound approach, and it’s one Republicans take from time to time, like when they pledge to use the power of government to combat the scourge of opioid abuse (which has devastated many heavily Republican communities) or when they decried Obamacare for trimming the future growth of Medicare to help finance coverage expansion.
But it’s rare to see much follow-through on such commitments. Republicans have shown no interest in reversing Obama-era cuts in Medicare’s future growth, a point Josh Barro of Business Insider cites as a telling example of GOP hypocrisy. Indeed, one of the more remarkable things about Ryan’s American Health Care Act is that its insurance-market reforms might particularly disadvantage older adults in rural areas earning working- to lower-middle-class incomes. This is a pretty decent description of the swing voters who won Donald Trump the White House and who’ve made the American Health Care Act something more than a glimmer in Paul Ryan’s eye.
That leads me to a second possibility, one that would be compatible with a “workers party” future for the GOP while offering a more tempered small-government Republicanism. A few years ago, Paul Ryan united congressional Republicans around a clever, widely misunderstood plan for revamping the Medicare program. The basic idea was pretty anodyne. Right now, Medicare beneficiaries may choose between traditional fee-for-service Medicare (Medicare FFS) and Medicare Advantage plans, in which private insurers offer the Medicare benefit. Ryan proposed a competitive bidding system, one in which the second least-expensive Medicare Advantage or Medicare FFS plan would establish a benchmark. If a senior chose a more expensive plan, she would have to pay the difference; if she chose a less expensive one, she’d get a cash rebate. Ryan didn’t promise huge savings relative to Obamacare. Rather, the plan anticipated that this reformed version of Medicare would cost just as much as Obamacare’s version, at least at first. But the hope was that the magic of competition would eventually yield substantial savings.
Here is how Ryan should have pitched this plan: One way or another, we are going to make sure that seniors get the Medicare benefit they’ve been promised. We believe we have a better way to deliver this benefit that will prove cheaper over time. If we’re wrong, that’s on us. If it comes to that, we’d sooner raise taxes than prevent seniors from getting their Medicare.
This is the right way for Republicans to talk about the cost of the safety net: If there’s a conflict between rich people’s money and the lives of ordinary Americans, we’re going to choose the latter every time. But Ryan couldn’t pitch his plan in these terms, because he needed to demonstrate that he could shrink the size of government. If he wasn’t going to cut Medicare and was going to cut taxes, he had to slash safety-net spending somewhere else. That’s why he proposed wildly unrealistic reductions in the growth of federal Medicaid spending. His message wound up being completely muddled. We need to cut spending because we’re facing a debt crisis … but we’re also going to cut taxes. It is vitally important that we protect the safety net for old people … but we’re going to slash it for poor people. If Ryan had taken a different tack—if he had said his goal was to ensure that poor people get off Medicaid by becoming middle-class people, and that if he was proven wrong, he’d do everything in his power to see to it that the safety net was still there for them—he might be serving as Mitt Romney’s vice president right now.
How can Paul Ryan and his allies send a more coherent message around the American Health Care Act? A good starting point would be to forget about cutting Obamacare’s taxes on households earning more than $200,000. It’s not that Republicans are opposed to cutting those taxes. It’s just that their priorities should lie elsewhere, namely in ensuring that vulnerable people don’t get screwed. If Ryan can’t get behind that message, his health care bill deserves to fail.