The repeal/replace stall on Obamacare reveals two important lessons. First, Republicans never have had a unified response to Obamacare. Second, Republicans squandered their chance under President George W. Bush to fix health insurance. Thanks to certain GOP purists, this chance was tossed while Congressional Republicans knew the issue was a top priority for Democrats when they would take control.
President Trump castigated Hill Republicans for not coming up with a single alternative to Obamacare during President Obama’s terms. He was right to do so. Between the House and Senate, there are many ‘magical thinkers’ who demand the reforms adhere to their whims – including just getting rid of Obamacare and the Medicaid expansion and let the chips fall where they may.
When Speaker Paul Ryan was the House Budget Committee chairman, his answer to Obamacare in 2011 was ‘repeal’ with some unspecified reforms to improve consumer choice (see FY 2012 Path to Prosperity, page 30).
Plus his ‘fix’ for Medicare involved seniors paying for health insurance – they would receive a subsidy (‘premium support’), with higher-income seniors receiving a smaller subsidy. As we’ve seen with Obamacare, Ryan’s ‘premium support’ scheme likely would have morphed into higher insurance premiums and increased demands for larger subsidies.
In 2012, Ryan criticized Obamacare for making people more dependent upon the government while creating a massive bureaucracy (see FY 2013 Path to Prosperity, pages 27 – 28). This time, however, he suggested some reforms, e.g., medical tort liability, allowing people to purchase insurance across state lines, and something called “access to consumer-directed health care options”. The latter is probably catastrophic insurance, which has low premiums but with very high deductibles. He also proposed changing the tax code to allow workers to choose another insurance provider if they didn’t want to buy the health insurance offered by their employers.
Further, Ryan again proposed ‘premium support’ as his fix for Medicare.
The next year, Ryan repeated his 2012 language on Obamacare and Medicare (see FY 2014 Path to Prosperity, pages 51- 52 and 38 – 41). And so forth.
Ryan’s ideas had the support of conservative think tanks, but they weren’t voter-tested. For example, what might have happened if these ideas (and other alternatives) were presented to voters in a professionally run focus group in 2013? The results would have been informative when Donald Trump became President Trump in 2017.
My guess regarding the focus groups: they would have expressed fear of losing benefits in the future. While Wall Street is going from strength to strength, average Americans are afraid of losing their jobs, or have had to accept lower-paying, part-time employment just to stay in the workforce.
These are uncertain times for people outside the Beltway and Wall Street. Fear of losing health insurance is showing its potency as Congressional incumbents survey their states or districts.
Lesson Two: One solid policy achievement by President George W. Bush was creating the Medicare Part D program covering prescription drugs for seniors – so why didn’t Republicans tackle health insurance too?
Under Medicare Part D, seniors purchase private prescription drug coverage. There’s plenty of competition, including Wal-Mart, supermarket pharmacies, and drug store chains. A survey done last year showed that almost nine out of ten seniors were happy with the program.
Some conservatives, however, are not. They’ve castigated former President Bush for creating a new entitlement program, overlooking how Part D is entirely market-based.
Medicare Part D’s success should have set the stage for a Republican approach to health insurance reform, but Bush’s nay-sayers refused. Meanwhile, Congressional Democrats made no secret that this issue was their top priority.
Did the ultra-free-marketeers believe that Democrats would never have control of the White House and Congress? Were they deaf to the signals given by Democrats such as (now former) Senator Tom Harkin?
Ultimately, the purists in the GOP (who believed Bush was a fiscal flop) left the health insurance field wide open when Barack Obama became President, and Democrats controlled both houses of Congress. President Obama saw his opportunity and he took it.
Now in late July 2017, we have an angry Republican president, with both houses of Congress under Republican control, and no palatable replacement for Obamacare.
The solution that emerges should have a bit of Democratic support with no-one losing coverage.
Republicans can wave away the Congressional Budget Office estimates as inaccurate, but the average person sees the news about how many people will lose coverage under GOP plan X, Y or Z, and wonders: will that be me? Hint to Hill Republicans: the wrong answer to this concern is ‘maybe you will, but it will reduce the deficit.’
President Trump doesn’t need to be a policy wonk to get Obamacare replaced. But he should study President Lyndon Johnson’s famously effective persuasion techniques (example here). Let LBJ be your guide: get in the game.