What’s Next for the Healthcare Debate After Trumpcare

by Benjamin Studebaker

Trumpcare has been defeated, and it went down meekly, failing even to receive a vote in the house. But this is not over–ever since Obamacare was passed, the Republicans have taken a variety of low-profile steps to weaken the law and make it less effective. Their hope now is that if they wait, the damage they’ve inflicted and continue to inflict on the system will cause it to unravel, giving them an opportunity to try again.

It’s relatively well-known that many Republican state governments declined to accept the federal funds Obamacare provided to help them expand Medicaid in their states, causing between 2.6 and 7 million more people to go without insurance, depending on whose numbers you believe. We talked about this the other day:

But this is just the tip of the iceberg.

Many Republicans like to claim that Obamacare is failing because insurance companies are leaving the exchanges, but what they don’t tell you is that companies are leaving the exchanges in large part because Republicans in congress refused to fund the part of Obamacare which was designed to prevent this. Early in the life of Obamacare, it was expected that patients with pre-existing conditions would likely sign up faster than younger, healthier patients, even in spite of the individual mandate. To help insurance companies cope with this influx, Obamacare included what’s called the “risk corridor program”. Here’s how it works: when insurance companies entered the exchanges, they would submit projections for pool quality–for the expected balance between high-cost, unprofitable patients and low-cost, high-profit patients. If it turns out that the pool is better than the company expects, it pays money into the program. If the pool is worse, they get a payout to make up for it. In the early years, it was expected that pools would under-perform, so the federal government was committed to supporting the program in the event that it ran out of funds from insurance companies.

But in 2014, Republicans threatened a government shutdown unless the Obama administration made a set of concessions. These concessions were included in what was called the “Cromnibus” spending bill. One of these concessions damaged the risk corridor program by denying the government the ability to fund shortfalls. This meant that if an insurance company’s pool was poorer than projections, it would not get paid by the program unless and until other insurance companies paid in enough money to fund the payout. The Republicans justified this move by characterizing federal funding for the risk corridor program as a “bailout” for insurance companies.

Because insurance companies now know that they cannot rely on the federal government to support the risk corridor program, they have been less willing to accept the financial risk of participating in the exchanges and they have tended to charge higher prices when they do participate. Republicans then publicize these high prices–before Obamacare’s subsidies are included–and use this to claim that the law is producing some kind of price spiral. It isn’t–the subsidies, which rise alongside premiums, have cost the government less than projected to this point:

If the cost of the subsidies is lower than expected, this means the premiums are also lower than expected. Claims to the contrary are fictitious and grounded in manipulation of data. Often times Republicans will make appeal simply to the fact that prices have increased, ignoring the important contextual fact that insurance prices were increasing before Obamacare, and have since increased at a lower rate and from a lower base than they would have otherwise:

So while the Republicans have hurt Obamacare and made it less effective than it would otherwise be, they have not caused it to fail catastrophically, at least not yet. The Trump administration will do more to weaken the system–it refuses to do advertising or promotion for the exchanges, hoping that sign-ups will stagnate and pool quality will not improve so that insurance companies will raise prices or drop out. It has strongly implied that it will not enforce the individual mandate, allowing more young, healthy people to free ride and weakening the pool.

If and when these measures do cause the law to fail, many Republicans will blame its problems on the Obama administration, pretending as if Obamacare were always fated to fall apart. They’ll point out that congress did not pass Trumpcare and attempt to use this to distance themselves from any responsibility. The truth however is that Republicans at both the state and national levels have already taken action to hurt the law. Millions more people would have received health insurance coverage if the Republicans had not taken these actions, and they would have had more choices and paid lower premiums. In a bid to politically damage the Democrats and damage this program, Republicans have willingly subjected American citizens to worse market conditions than were necessary and deprived many Americans of even basic coverage.

If the Republicans finally succeed in breaking the program, the left will struggle to get this information out to enough people–the Republicans will be hard at work claiming that collapse was inevitable, and too few Americans have a strong grip on how the law works and the history of how it’s been implemented.

Instead of attempting to defend the status quo, we should propose an alternative which makes the promise President Trump himself continually made throughout the campaign–to ensure that every American has access to healthcare irrespective of income:

I am going to take care of everybody. I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.

This stance didn’t cost him votes–it won him votes. If he really intended to take care of everybody, he could have proposed a new law that would do that. He didn’t do that because he only said this to get elected, and acting as if it were a vote-loser only turned it into a bigger vote-winner. But by popularizing the idea that everyone ought to be covered among Republican voters, Trump has inadvertently made a gift to the left–he has strengthened a public consensus for universal healthcare.

The left should capitalize on Trump’s short-term thinking by proposing a plan which actually accomplishes what Trump himself said he would do–single payer. The polling backs this up–a universal federal program is already more appealing to voters than either a repeal or the status quo:

Will Trump sign such a bill and will Republicans vote for it? Almost certainly not. But this will provide left-leaning candidates with a useful cudgel with which to pound the Republicans in 2018 and beyond. People like to vote for things and not merely against them. If the Republicans succeed in turning Obamacare into a basket case, the status quo will become a political no-go zone. The smart move will be to get behind a superior alternative, one that gives people hope for a better future. Sometimes the best defense is a good offense.

The Republicans won seats in 2010, 2014, and 2016 in part by promising their base, over and over, to replace Obamacare with something better, even though they knew they couldn’t pass any such thing while Obama was in office and had no idea what “something better” would look like. Repeatedly proposing single payer and forcing Republicans to vote against universal coverage could score the Democrats many points in the coming years and restore their long lost left wing bona fides.