Obamacare has long been politically divisive. Republicans’ attempts to kill it through legal and political means have failed, but the politics of US health care reform continues.
Signed by President Barack Obama in March 2010, the Patient Protection and Affordable Care Act (ACA), commonly known as Obamacare, has divided Democrats and Republicans since the very beginning. This partisan polarization has led to a series of Republican actions to undermine Obamacare. Because Republicans could not repeal the law when Obama occupied the White House, they mobilized against Obamacare through a variety of legal and political means. The conservative legal scholar Michael Greve, of the American Enterprise Institute, whom we quoted in our book Obamacare Wars, spoke vividly about this mobilization not long after the enactment of the law:
This bastard has to be killed as a matter of political hygiene. I do not care how this is done, whether it’s dismembered, whether we drive a stake through its heart, whether we tar and feather it and drive it out of town, whether we strangle it. I don’t care who does it…Any which way, any dollar spent on that goal is worth spending, any brief filed toward that end is worth filing, any speech or panel contribution toward that end is of service to the United States.
More concretely, Republicans used the court system and the states to weaken Obamacare. For instance, a June 2012 Supreme Court decision made it possible for many Republican-controlled states to refuse to participate in the expansion of Medicaid so central to Obamacare, a move that deprived millions of low-income Americans of coverage. At the same time, an even greater number of states refused to implement their own health-insurance exchanges — regulated marketplaces where uninsured people buy coverage — which forced the federal government to step in, something that it had not anticipated and that created new policy challenges. As a consequence of these Supreme Court and state decisions, and in the context of Republican and Tea Party mobilizations against President Obama and “his” health care reform, the implementation of the reform proved highly contentious and uneven across the country.
The Trump presidency: Three challenges facing Republicans
The end of the Obama era and the beginning of the Trump presidency in January 2017 finally made the prospect of an outright repeal of Obamacare possible, especially because Trump had promised to work with the Republican-controlled Congress to get rid of his Democratic predecessor’s most ambitious domestic policy reform. As Carolyn Tuohy suggested in Policy Options at the time, important changes to Obamacare seemed likely. Yet Republicans faced three key challenges that limited their efforts to repeal and replace the ACA through the legislative process.
First, despite Republicans’ vitriolic rhetoric against Obamacare and the fact that many Republican-controlled states had refused to implement key aspects of the law, the ACA actually features pro-market elements that had received GOP support before 2010. For instance, the health-insurance exchanges and the subsidy system created by Obamacare to help the uninsured afford insurance reflected traditionally Republican policy ideas. These ideas were popularized in the mid-1990s as an alternative to President Bill Clinton’s 1993 health security blueprint and later embedded in the Massachusetts health care reform, signed in 2006 by the state’s Republican governor at the time, Mitt Romney.
In light of the Republican origins and the market-friendly nature of these major Obamacare provisions, Republicans have struggled to craft concrete and realistic alternatives to the Democratic legislation. Although it is easy for Republicans to attack Obamacare, deciding on a suitable replacement is difficult, especially because conservative and more moderate Republicans do not agree on key policy issues. Considering that Republicans have only a slight majority in the Senate, these policy disagreements matter a great deal in formulating and agreeing on concrete bills.
Second, although Obamacare remains controversial, since the beginning of the Trump administration efforts to repeal it have actually boosted support for the 2010 legislation. According to the Kaiser Health Tracking Poll, for instance, in June 2017, support for Obamacare moved above 50 percent for the first time since its enactment more than seven years earlier. This suggests that, when the threat of repeal became more apparent, a growing number of people started to side with Obamacare. One reason is that Republican proposals to replace Obamacare proved widely unpopular. For instance, in May 2017, right after the House of Representatives passed a Republican repeal-and-replace plan, a poll suggested that only 21 percent of Americans supported this initiative, which is far lower than the level of support for Obamacare.
Third, strong pressures from Republicans’ conservative base, including wealthy donors, mattered as well and caused coalition-management problems for party leaders. In early 2017, the Republican-controlled Congress seemed poised to “go big” and “go bold” on repeal, as House Speaker Paul Ryan declared. Ryan’s plan represented a dramatic retrenchment: drastically reducing tax subsidies to purchase insurance, eliminating Medicaid expansion and gutting the traditional Medicaid program’s entitlement status. Yet, polished slide decks and glossy policy briefs aside, Ryan was not in control of the legislative process. Perceiving Ryan’s bill as “Obamacare Lite,” conservatives from the House Freedom Caucus forced leaders to cancel a scheduled vote on the bill and then extracted key policy concessions, such as allowing states to gut the ACA’s consumer protections. These concessions helped Ryan secure enough votes to pass the House bill in May 2017.
Intraparty conflict also doomed repeal-and-replace votes in the Senate. After a short debate on the Senate’s legislative vehicle — the Better Care Reconciliation Act — conservatives like Mike Lee of Utah and Rand Paul of Kentucky joined with moderate Republicans to kill the proposal in a 43-57 vote. Senate leaders’ second-best option — a bill that repealed all of the ACA’s coverage provisions (including the individual mandate, Medicaid expansion and subsidies), included no replacement provisions and proposed cuts to traditional Medicaid — did not fare much better. It failed, 45-55. Finally, in a last-ditch effort, Majority Leader Mitch McConnell called up the “skinny repeal,” which eliminated only the individual mandate, the ACA’s least popular measure (it requires Americans who don’t have health insurance through other sources to buy coverage or pay a fine). This bill also failed, but only because of the unexpected “nay” of Senator John McCain of Arizona. While McCain’s vote was decisive in killing the skinny repeal, there is evidence that his main objections focused on the fact that the legislation was “rammed through” and did not “actually reform” health care.
Although the Republicans had failed at coalition management when health care was the only issue on the table, shifting their attention to tax cuts — a bedrock Republican policy — helped to seal the deal. They saw in the tax cut bill another opportunity to target the individual mandate. Despite the unpopularity of the mandate, however, the Congressional Budget Office continued to make dire predictions about the effects of repeal on insurance coverage. This may help to explain why Republican leaders folded mandate repeal into the $1.5-trillion Tax Cuts and Jobs Act. By removing the penalties imposed by the mandate (rather than repealing the mandate itself), the Republicans also generated over $300 billion in savings (because fewer Americans would purchase federally subsidized insurance) that could be put toward the proposed tax cuts, which passed in a vote along party lines before the end of 2017.
Death by a thousand cuts
The failure to repeal and replace Obamacare through legislative action does not tell the whole story of the efforts to undermine it. Importantly, key aspects of the law do not — at least not yet — work organically; rather, they rely on government actions to ensure effective functioning. These include outreach efforts to help people navigate through the system. Under the Trump administration, the Department of Health and Human Services (HHS) imposed cuts on these programs.
The viability of the health-insurance exchanges depends on getting enough people, particularly healthy people, to sign up. Ending the individual mandate removed one means of pressuring likely healthier people into buying insurance in the marketplaces. Furthermore, the Trump administration has made several decisions that will alter the quality of benefits people receive under the ACA. In the fall of 2017, the administration announced it would stop making “cost sharing reduction” payments, which had compensated insurers for the losses they incurred by reducing out-of-pocket expenses for lower-income households receiving insurance through an exchange plan. At the time, President Trump denounced these payments as a “bailout” for the insurance companies, but many observers worried that the move would further undermine already unstable insurance markets. As well, in recent months, the administration has been planning regulatory changes that would allow states to offer coverage that does not include the essential health care benefits included in the ACA and pays a smaller percentage of health care costs.
HHS has also given the green light to states to challenge one of the underlying principles of the Medicaid expansion. One of the truly novel features of the ACA was that it extended Medicaid to cover everyone whose income is below 138 percent of the federal poverty level, no matter what their personal circumstances and with no need to meet criteria of deservingness. Yet, acting on guidance issued by the Trump administration in early 2018, nearly 20 states are developing requirements for people to engage in paid work or unpaid “community engagement” as a condition of Medicaid participation.
Overall, the future for Obamacare remains highly uncertain. A resuscitation of a comprehensive repeal-and-replace legislative effort seems unlikely, at least in the short term. On the other hand, it is unclear how effectively the law can continue to function when managed, at the most senior levels at least, by people who are at best only half-heartedly committed to making it work. At the start of April 2018, the number of Americans signing up for coverage through the exchanges during the annual open enrolment period was in fact only marginally smaller than in the previous year: 11.8 million, down from 12.2 million. Whether that suggests that the exchanges have now developed a regular constituency or whether those numbers were a last gasp before a “death spiral” sets in will be seen over the coming years.
Interestingly, the people really squeezed by the changes to the exchange rules are those in households earning over 400 percent of the federal poverty level who buy their insurance through the exchanges but do not qualify for a federal subsidy. Higher health care costs for these people will provide plenty of fodder for those wishing to denounce the arbitrary nature of the insurance system, but it is too soon to tell whether they will continue to direct their criticism at Obamacare, or whether the Trump administration and congressional Republicans will now be perceived as “owning” these problems.
More generally, the politics of health care seems to be moving toward increased antagonism. Those in Congress seeking to make the ACA work have found themselves caught between conservatives still determined to bring the 2010 law crashing down and renewed enthusiasm on the left for a shift toward a Medicare-for-all arrangement. The prospect that the US might emulate Canada is still very distant indeed, but the Bernie Sanders wing of the Democratic Party could argue that a more radical transformation of the US health care system might prove a more robust reform than the compromise of state and market mechanisms represented by Obamacare. This is an excellent reason for informed Canadians to pay close attention to the ongoing politics of health care reform south of the border.
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