After weeks of suspense, built up with teases and process
controversies, there is an understandable temptation to seize upon the newly
released Senate Republican health care bill like a piece of next-generation
consumer electronics. One set of writers
reviews its features and bugs. Another prognosticates
on the market’s receptivity to this new product. Eventually, when these reviews and
predictions are starkly negative and key market participants announce that they
will have no part of it, a new line of commentary arises about how the designer
could have so badly miscalculated.
Yet this is not
the final McConnell substitute. It is
not McConnell 1.0. It is not even a
particularly serious McConnell beta. It
is just the first step in an extended dance whose basic moves are quite
well-known. Like Swan Lake, however, when entrusted to a skilled choreographer – and
Sen. McConnell certainly is that – this dance surprises and delights audiences
each time it is performed, as though they had never seen it before.
All of this must
be understood in the context of the fundamental task congressional Republicans
have set for themselves. Because their
vow to eliminate all the taxes that financed much of the Affordable Care Act is
sacrosanct, they must deliver a health care system with dramatically fewer
resources. (The money available to them
to do something more than return to the pre-ACA state is the proceeds from
ACA’s Medicare savings, which Republicans also blasted at the time but have
since found convenient to accept.) With
no substantial inefficiencies or extravagancies in the ACA to eliminate (at
least not without moving to a single-payor system, which is an obvious
non-starter among Republicans), this means that their health care legislation
must dramatically reduce the number of people insured, the amount of care
provided, or both.
The House bill
sought to minimize the total number of people losing coverage by concentrating
its coverage losses on those most expensive to insure: older and sicker people. Ironically, the headline metric that has come
to define this debate – the number of people losing coverage – would judge a
bill more harshly if it did not concentrate the losses on those most expensive
to cover.
With no
substantively good alternative, and with no appetite for making the case that
eliminating the “tanning tax” is important enough to justify these coverage
reductions, the question for Republican leaders is how to give their Members
the best possible cover to vote for a deeply unpopular bill. And here process and perceptions are
key. If you cannot plausibly argue that
your bill is “good”, put your Members in position to argue that it is “better”. (More broadly, policy analysts typically
focus on proposals’ cardinal value, but the political process tends to work
more in ordinal terms – which makes setting an advantageous point of reference
crucial.)
Initial reactions
to the McConnell substitute are scorching, from both left and right. Many have called it harsher than the House
bill, which it probably is. Sen.
McConnell is likely delighted with those reviews. Careful observers over the years recognize
that Sen. McConnell thinks more moves in advance than Gary Kasparov ever did.
Sen. McConnell is
repeating the same three-step that allowed Speaker Ryan to pass a dreadful and thoroughly
unpopular bill through the House. Start
with a basic bad bill, one you know pretty much everyone will hate. Deliberately follow an objectionable,
secretive process. Allow Members from
across your caucus to denounce it on both substantive and process grounds. Then you start appeasing your Members, group
by group. First you move the bill much
farther to the right, picking up the Tea Party factions. This, in turn, causes even more furious
denunciations by self-styled moderates.
Have one or two of them declare solemnly that they will refuse to
support the bill, with a day or two of congratulatory media stories about how
those moderates stood on principle. This
role was played by Rep. Fred Upton in the House and now seems to have gone to Sen.
Dean Heller and perhaps Sens. Rob Portman and Shelley Moore Capito. Then leadership gives the moderates token
concessions that are easy for reporters to describe but that do not alter the
fundamentals of the bill (and hence do not cost you the ultra-conservative
support that you just picked up). Having
sung the praises of the principled moderates much of the media will be loath to
admit that they gave in for cosmetic changes – especially if the final
substitute is introduced only just before the decisive vote. Throughout all of this, the process
objections, which had been central to the critique of the initial bill, largely
melt away as the legislation is repeatedly rewritten in response to Members’
complaints. Here, too – in procedural
terms – the Members can claim credit for making the legislation “better”.
The process of
sequentially placating Right and Left works because the two sets of Members are
trying to appease fundamentally different kinds of people. The right-most Members are responding to
cohesive, well-funded advocacy groups with the policy expertise to analyze any
legislation’s practical effects. The
moderates are appealing to swing voters dependent on media accounts and with no
real capacity to see how all the pieces fit together. By moving the initially released bill to the
right, the Tea Party Members show their value to their funders, producing a
“better” bill. By adding high-profile
but wildly inadequate funding to the legislation – subsidies for high-risk
pools, opioid treatment, slowing the elimination of the Medicaid expansion, or
whatever – the moderates produce a “better” bill for their constituents.
Because no
Republican bill that repeals the ACA’s revenue provisions will be better than
current law, the object of these initial leadership drafts is to provide an
alternative point of comparison for the bill that Members will actually vote to
pass. The plethora of seeming oversights
and blunders in the initial McConnell substitute therefore are not indications
that the Majority Leader does not know what he is doing – they are signs that
he very much does.
Those appraising
the initial McConnell substitute also ought to bear in mind the lack of a
meaningful political difference between a bad bill and a very bad bill,
especially in a highly technical area like health care. Media accounts typically limit themselves to
no more than three alleged defects in any bill; even advocacy groups rarely
include more than five or six top-level complaints in their point papers. The difference in public reception between a
bill with five defects and one with twenty-five defects therefore is not that
great. But by starting with a very bad
bill, the leadership gives Members many more opportunities to fight for, and
win, improvements.
Commentators also
should not assume that the initial McConnell substitute accurately reflects the
results of his staff’s private consultations with the parliamentarian about
which provisions Senate rules will permit on a “reconciliation” bill shielded
from Democratic filibustering. He has
strong incentives both to overstate and to understate what the parliamentarian
is willing to allow him to do. He can
blame the parliamentarian for blocking some politically hazardous provisions
that some senators desire, dissuading them from demanding those provisions as
the price of their votes. In addition,
if senators think he cannot add this or that provision to the bill, they may be
tempted to justify their “no” votes on that basis. If Sen. McConnell can pull those provisions
out of his hat at the last minute, the senators may feel trapped because they
have abandoned other possible grounds for voting against the bill. On the other hand, including some provisions
that he knows will be subject to lethal points of order on the floor may give
him more material to trade away with senators that do not realize the
provisions are doomed anyway.
Finally, one
should not necessarily assume that all provisions are designed to work in
straightforward ways. The McConnell
substitute would eliminate the individual and employer mandates to purchase
health insurance without any semblance of a substitute. When combined with requirements to cover
essential benefits and prohibitions on discrimination against people with
pre-existing conditions, this would seem to open the door to opportunistic
enrollment in insurance just when someone needs expensive care. If so, it would risk destabilizing the
individual insurance market.
This instability could,
however, give states strong incentives to seek the broad waivers that ACA
allows and that Sen. McConnell’s proposal would expand. If the ACA’s standards for these waivers were
diluted or ignored, they could become de
facto block grants. Republican
strategists have long favored converting anti-poverty programs into block
grants, which become difficult to defend politically as states’ practices
diverge. (President Trump’s budget
proposes to eliminate or dramatically reduce several block grants created by
his Republican predecessors on the grounds that insufficient evidence
demonstrates their value.) If the “regular”
health care system becomes increasingly non-functional, states across the
political spectrum may opt for waivers (which receive less federal funding than
would otherwise flow to states).
Alternatively, if
the lack of protections against opportunistic timing in purchases of health
insurance are combined with the right for insurance companies to sell across
state lines (another frequent feature in Republican health care proposals) and
the ability for states to waive protections for people with pre-existing
conditions of the kind in the House bill, the result would be that virtually
all individual health insurance policies would be written from states
eliminating those protections/ The Koch
brothers and other groups pushing to deregulate health insurers surely can put
that together, but many media accounts likely will not.