It looks like Round 3 for the Republicans in their attempt to repeal and replace Obamacare. Round 1 fizzled, Round 2 made it through the House of Representatives but wouldn’t pass muster in the Senate, and Round 3 is the Senate’s turn to adjust the bill. If you couldn’t tell, things are getting complicated. To shore up support for the healthcare bill, Senators have had to make some adjustments to appeal to both moderate Republicans and far-right conservatives. Although the GOP has a majority in the Senate, just like in the House, they can only afford to lose two Republican votes before the bill dies.
Weeks ago, moderate Republicans criticized the House bill for being too harsh on Medicaid cuts, potentially stripping away healthcare from millions of citizens… including Republican voters in Southern and Midwestern states. The new bill is less draconian on the cuts, and also chips in $45 billion to deal with America’s growing opioid addiction crisis. President Trump and Senate Majority Leader Mitch McConnell (R-KY) are desperately hoping that these changes will bring moderate Republicans, like Alaska’s Lisa Murkowski, back into the fold.
To weaken the argument that the GOP healthcare bill is nothing but a handout to the rich who complained about Obamacare’s taxes, the new amendments to the bill bring back two taxes on the higher earners. Although Democrats are unlikely to have their outrage tempered, reducing the tax cuts on the rich could provide enough political cover to bring moderate Republicans back to the bill. The bill also throws in an additional $70 billion to states to “stabilize” their insurance marketplaces, which definitely sweetens the deal for moderates.
But the bill also has to throw some bones to the Tea Party, which also opposed the House bill. The House bill was considered both too heartless by moderates and too socialistic by small-government conservatives, creating a quagmire for the Republican leadership. To compensate for chipping in more federal dollars in the healthcare bill, the Senate amendments include a provision brokered by Senators Ted Cruz (R-TX) and Mike Lee (R-UT): Allow consumers to purchase the less-comprehensive health insurance plans banned under Obamacare.
The Cruz plan is the most controversial aspect of this latest version of the Republican healthcare bill. Bare-bones health insurance plans were one of the biggest complaints that led to the implementation of Obamacare in the first place: Consumers kept finding out the hard way that their insurance plans did not provide anything resembling sufficient coverage.
Critics argue that Cruz’s provision would end up splitting the health insurance market in two, with healthy people and sick people diverging into separate “risk pools.” Healthy people, now able to purchase bare-bones plans again, will abandon the comprehensive plans that sick people need, driving up premiums for the sick. The Senate bill now also allows for Obamacare-era subsidies to be used for the “catastrophic plans” that are preferred by younger, healthier citizens, which will also drive more people away from the comprehensive plans that Obamacare tried to cement in place.
By putting pre-Obamacare health insurance plans back on the market, and allowing government subsidies to be used in purchasing them, Ted Cruz has mightily tempted the Republican base. The most common middle-class complaint about Obamacare- that it drastically increased health insurance premiums- will be solved by the Cruz provision.“We’re going to cut your premiums,” will win over millions of voters, and just in time for the 2018 midterms.
Democrats will have to struggle mightily to appeal to voters and moderate Republicans in Congress, warning them that the bare-bones health insurance plans are nothing but a siren song. Millions of consumers will eagerly sign up, enjoy their low premiums for a bit, and then find themselves on the hook for thousands in uncovered costs if and when they actually get sick or hurt. Hopefully, the seven years of Obamacare implementation we have experienced will convince many citizens of the importance of comprehensive healthcare coverage.
While Cruz’s amendment may have fired up conservatives and cash-strapped citizens eager for the return of cheap insurance, the Senate bill has yet to lock in enough Republican support to pass. Critics of the original bills, such as Rand Paul (R-KY), Susan Collins (R-ME), and John McCain (R-AZ), are still demanding more changes. Others are waiting to see the Congressional Budget Office (CBO) analysis of the bill before committing to a vote.
As with previous iterations of the healthcare bill, liberals are hoping that the CBO highlights the vast potential damages of its implementation. If the CBO publicizes that the Cruz amendment would lead to many thousands of citizens finding themselves on the hook for most (or all) of the cost of unexpected medical emergencies, support for the Senate bill could sour. Certainly, liberals have no shortage of horror stories to refer to when it comes to individuals who found that their “bare bones” health insurance did nothing to help with what the insurance companies deemed “pre-existing conditions.”
Ted Cruz wants to take America back to the bad old days of health insurance bait-and-switches, and we shouldn’t let him.