The Twin Icebergs Dead Ahead for TrumpCare

I sure hope Republicans enjoyed their victory lap for getting the American Health Care Act (AHCA) through the House by the thinnest margin, because there are two huge icebergs dead ahead: the backlash, and the Senate.

The first iceberg ahead for the GOP is the TrumpCare backlash. House Republicans are starting this week’s recess with a big set of brutal ratings changes from the Cook Political Report. Cook shifted 20 GOP-held seats toward Democrats after the vote; Democrats need to flip 24 seats to reclaim the House. Twenty-four of the House Republicans who voted for the health-care bill come from districts where Trump carried less than 50% of the vote, 14 of them won by Hillary. Cook wrote the bill “guarantees Democrats will have at least one major on-the-record vote to exploit in the next elections,” and GOP passage of a bill this unpopular “is consistent with past scenarios that have generated a midterm wave.”

The second iceberg is the Senate itself. First, TrumpCare faces major procedural hurdles in the Senate. The GOP bill added provisions allowing states to seek waivers on essential benefits and preexisting conditions, to win over the right-wing Freedom Caucus. This will keep Republican senators from passing the bill through “reconciliation,” which is usually reserved for budget legislation.This is a problem. It means Republicans probably can pass measures impacting the Medicaid expansion, subsidies and individual mandate with a simple majority — but probably can’t pass the deregulatory features the Freedom Caucus signed on for.

TrumpCare’s politics in the Senate are deadly. Senate Democrats have made clear they’re having none of TrumpCare, and Republicans already indicated it’s DOA: they intend to scrap the bill and start over, with 10 selected by Majority Leader McConnell to lead the redrafting effort. It would take only 3 GOP “no’s” in the Senate to doom the bill, and there are already 9-10 Republicans from states that expanded Medicaid who have indicated they’re skeptical. This means it’s likely months before the outlook gets clearer. Huge issues will need to be dealt out to pass a bill through the Senate, and a House-Senate conference committee, to get any bill to Trump’s desk. Some examples:

  • MEDICAID: TrumpCare cuts $880 billion from Medicaid and repeals the expansion many GOP governors took advantage of. Cuts of this magnitude are a show-stopper for many Senators.
  • OPIOIDS: Republican senators also represent states ravaged by opioid abuse and deaths. The House measure would let states escape the Affordable Care Act (ACA) requirement that insurers cover anti-drug services, and reduced Medicaid coverage would decimate financing for opioid treatment.
  • UNINSURED: The Congressional Budget Office initially estimated the House bill would mean the loss of coverage for 24 million people. Many analysts say this number is now likely higher under the latest TrumpCare bill.
  • TAX CREDITS: Some GOP senators have already said they oppose the bill’s age-based tax credits, charging they will make coverage unaffordable for older constituents.
  • PLANNED PARENTHOOD: TrumpCare defunds Planned Parenthood for a year — a step that draws opposition from a handful of Senate Republicans, but is a must for many House conservatives.

TrumpCare also faces long odds in the Senate because it’s a moral disaster as big as its political mess. The moral issue is whether to roll back the ACA’s spending and regulations that cover so many millions of vulnerable and poor Americans. Many GOP senators and governors, for moral and political reasons of their own, are not going to accept TrumpCare’s draconian cuts to Medicaid and weakening preexisting conditions protections. The result will be a long, intense debate. From the New York Times:

Senate Republicans will face some of the same dynamics that stymied the House for weeks. Moderate senators will demand significant concessions, which in turn could alienate three hard-liners: Senators Ted Cruz of Texas, Rand Paul of Kentucky and Mike Lee of Utah. Republican senators are certain to face pressure from governors worried about constituents on Medicaid losing their coverage.

Let’s just say the Senate somehow also bridges these gaps and passes its own bill.  From there, it goes back to a House-Senate conference committee, where the House reaction to whatever the Senate produces is an unknown, to final adoption by both houses, and then — and only then — to Trump’s desk. So we’re looking at the ugliest politics on a major piece of legislation I’ve seen in 26 years in DC, a months-long debate in the Senate rewriting TrumpCare that will squander more time and political capital, and a completely uncertain outlook for a conference committee if it even gets that far.

The only thing insurers can be sure of is that uncertainty is the new normal under Trump.

Resources:

The Gorman Health Group 2017 Forum concluded last week in New Orleans with over 200 of our closest clients and partners. John Gorman provides key takeaways from the event here. Make sure to join us next year!

 

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