As a group of Republican senators works behind closed doors to draft new health care legislation to repeal and replace parts of the Affordable Care Act, a somewhat surprising group of dissidents to the GOP effort has emerged: conservative policy wonks.
Democrats, of course, have been solidly against Republican efforts to unravel Obamacare from the beginning. But some conservatives are joining them in arguing that the health care bill passed by the House last month contains some poorly written policy that could leave more Americans uninsured than would be under the ACA, or potential alternatives. Senate Republicans are writing their own measure, but considering that the House bill is something of a blueprint, these critiques could be a sign that some conservative health policy analysts will end up at odds with conservative politicians on reform efforts. Specifically, some conservative critics want the Senate to take a different approach than the House did on one of the toughest health policy issues: how to get insurance to people who are too poor to pay for it.
Republicans have long wanted to curb the cost of Medicaid, the state and federally funded public health insurance program for the poor. Since at least 1981, regular efforts have been made to rein in the program by changing it from an entitlement, where the federal government pays a set portion of the bills no matter how many people are enrolled, to a per capita cap or block grant. Those changes would give states a limited amount of money and more control over how to spend it than they have in the current arrangement. The House GOP bill would accomplish that longtime goal while also rolling back the Affordable Care Act’s Medicaid expansion, which made everyone earning under 138 percent of the federal poverty line (about $16,600 for an individual) eligible for the program.1 The House GOP bill would freeze enrollment in the expanded program starting in 2020.
But the bill, the American Health Care Act, would cut Medicaid without adding much in the way of support for people to buy insurance. Joseph Antos and James Capretta — longtime Obamacare critics and health policy scholars at the conservative think tank the American Enterprise Institute — have criticized that part of the proposal, writing that too many low-income families would be unable to afford insurance.
Republicans often argue that income-based entitlement programs such as Medicaid discourage people from working or taking better jobs, because earning more can mean losing the government benefit.2 But in the case of the House GOP bill, argued Avik Roy, a conservative writer and health policy expert, older, working-age adults could lose coverage if they earn too much to qualify for Medicaid. That’s because the House bill provides subsidies to buy insurance based on age, not income and the cost of insurance, as is currently the case with the ACA. And lower-income, older adults will be getting a lot less in subsidies than they currently get, even though their subsidies are higher than for younger adults. According to estimates from the Kaiser Family Foundation, a low-income 60-year-old who earned slightly too much to be eligible for Medicaid would likely be on the hook for thousands of dollars a year in premiums, and in some cases, the cost could be more than her total income.
The House bill also includes a patchwork of changes to the private insurance market that would repeal some ACA regulations while leaving others in place. That approach led Chris Pope of the conservative Manhattan Institute to write that Republicans would be better off abandoning the current repeal effort altogether and instead focusing on changing policy using the powers of the federal Department of Health and Human Services. The ACA regulations must be more or less fully repealed, Pope argued, or the cost of insurance won’t drop enough to make it affordable for the majority of people buying plans on the private insurance market. Pope would like the money currently used for subsidies to go to helping people who have chronic health issues. Conservatives have joined liberals in arguing that various proposals that would keep the ACA’s protections for people with pre-existing conditions while reducing what insurers must cover are likely to punish the sick.
Of course, many Republicans support both the House bill and the GOP’s approach to Obamacare repeal. But there isn’t consensus among conservative policy wonks on the most important goals of health care reform (there isn’t consensus among liberals either). Tom Price, the secretary of health and human services, proposed bills while serving in the House that prioritized reducing government spending and regulation and targeted government aid for people with health concerns. The House bill would cut spending and regulations somewhat, and Price supports it. Roy, on the other hand, has outlined how he thinks near universal coverage could be achieved through free-market principles and conservative tools. The House bill focuses less on that approach. There is relative consensus among conservatives that the insurance market should have fewer regulations to bring down costs, but opinions vary on whether the House bill goes far enough in that respect.
It’s not yet clear where Senate Republicans will end up on this question of how much financial support should be given to low-income people. Sen. Dean Heller of Nevada, a key moderate since he is up for re-election in 2018 and represents a state that expanded Medicaid, said he couldn’t support the House bill when it was passed. He has since said he would support a phaseout of federal funding for Medicaid expansion that would take place over a longer period of time than the House bill calls for. Reports have also surfaced that the Senate bill could make deeper cuts to traditional Medicaid than the House bill would have. And it’s not yet clear how health insurance subsidies will be calculated in the Senate legislation, though it may include more support for older, low-income people than the House bill does.
Republicans will need the large tax cuts included in their health care bill to complete many of the other things on their agenda, which puts a lot of pressure on them to get a bill through Congress. There’s also a growing need for immediate fixes to some of the state health insurance marketplaces for people who don’t get insurance from an employer or a public program, where uncertainty over the future of health care reform, enrollment and payments to insurers is causing insurers to flee and rates to rise. There is some consensus among health policy wonks, however, that the Senate will need to handle policy differently than the House if it wants to not only pass a bill, but also keep its constituents insured heading into 2018.