Why Obamacare Repeal Won’t Die

Why Obamacare Repeal Won’t Die

At a rally to Save the ACA, San Francisco, January 15, 2017 (Tom Hilton / Flickr)

Why is it that every time liberals think the Republican effort to repeal Obamacare has collapsed, it comes back to life, taking one step closer to Congressional passage and President Trump’s signature? This first happened in late March, when the House initially failed to muster the votes to pass a “repeal and replace” law, only to squeak it through in early May. And on July 18 it happened again. Senate Republicans could not marshal the votes to pass Majority Leader Mitch McConnell’s bill slashing Medicaid and many of the taxes to pay for it, reducing subsidies for individuals who buy insurance on the exchanges, and eliminating the mandate requiring people and small businesses to buy it.

But liberal celebrations were cut short when President Trump and the GOP regrouped later that week. Despite numerous obstacles, including John McCain’s illness and unhelpful rulings from the Senate parliamentarian, McConnell forged ahead, narrowly winning a vote on July 25 to proceed with debate on some sort of a bill, any kind of a bill, that he can then take to a conference with the House.

The zombie-like resilience of the GOP repeal-and-replace effort would be the stuff of a Hollywood epic—and here John McCain’s heroic and impassioned return to the Senate surely takes center stage—were it not so potentially devastating to tens of millions of Americans. Indeed what is absolutely astounding is the degree to which the repeal of Obamacare remains alive despite setbacks that would have long since doomed any other legislation. The repeal bills that have been scored by the Congressional Budget Office (CBO) are preposterously unpopular with the general public; they shift nearly a trillion dollars from the poor to the rich and deprive more than 20 million Americans of health insurance. The legislation has virtually no support from the key stakeholders and industry groups most affected, and in both the House and the Senate, Republican leaders have pushed forward the legislation in a most irregular fashion, without hearings, committee markups, or any attempt to entice even a handful of conservative Democrats. And of course, President Trump has remained ignorant, confused, and largely distracted from the actual legislative effort. He wants a “win” but cares little about its content or character. Trump’s episodic interventions have therefore been ham-handed and contradictory.

And yet this monster fails to succumb. It bleeds, it sustains ugly scars, yet it staggers on. There are four basic reasons for its death-defying resilience.

First, Republicans have an overwhelming incentive to pass something called “Repeal Obamacare,” not just for the sake of partisan ideology and commitment, but for their very political survival and success in 2018 and beyond. And this incentive is not that of conservative ideologues alone, but extents well into the ranks of GOP “moderates.” In a recent interview Josh Holmes, a former staffer to Majority Leader McConnell, was asked why so many in the GOP thought it better to pass a hugely unpopular bill than just do nothing. Why do they have more to lose by not passing a bill than by pushing one through? Holmes’s answer was instructive. First, over several election cycles, the GOP has defined itself on the basis of Obamacare repeal. It is foundational, like anti-Communism of old, and more important than any contemporary polling. Failure to repeal would create what Holmes called a “catastrophic narrative” over the next few election cycles because it would demoralize and fragment the GOP base. The cold reality is that despite all the confusion and division, the phrase “President Trump’s efforts to repeal Obamacare” still tests in the mid-90s among core Republicans, now and for the foreseeable future.

This helps explain why a Senator like Nevada’s Dean Heller voted with McConnell to advance the Obamacare repeal legislation on July 25. Heller is probably the most vulnerable Republican Senator up for re-election in 2018. Nevada went for Hillary Clinton in 2016 and the Republican governor there is adamantly in support of continued Medicaid funding. And Heller is no ideologue of the GOP right. Nevertheless, if he is to have any chance of winning, he must retain support from the overwhelming majority of Republican voters—and they still favor repeal. Heller undoubtedly expects that he can have his cake and eat it too. In the sausage-making process that will generate a consensus GOP bill over the next week or two, Heller and other so-called moderates expect McConnell to toss them a few tens of billions of dollars—for opioid treatment or in support of rural hospitals—in order to enable them to file some of the sharp edges off any repeal bill.

Second, the GOP is determined to cut taxes for the donor class. With the waning of the culture wars, tax reduction for the rich remains one of the few planks upon which party moderates and conservatives can agree. Medicaid, both the expanded version legislated by the Affordable Care Act and traditional Medicaid that existed for decades before the new law, is a de facto single-payer program for the poor and the bottom half of the working class. It is expensive and paid for by some of the most progressive taxes enacted since the Second World War. Thus, it is not surprising that every iteration of a GOP repeal bill takes direct aim at Medicaid, slashing about $750 billion out of its budget over a ten-year span. Add to this the $425 billion that a GOP repeal bill plans to cut from the exchanges, mainly subsidies designed to make the individual market affordable for those families earning less than $92,000 a year, and we are talking real money—$1.2 trillion over a decade. All this reduces the federal deficit by several hundred billion dollars, money that Republican leaders plan to “spend” when they enact their big tax bill after the August legislative recess.

These savings are of course politically useful to McConnell. By restoring some of the progressive taxes that currently pay for part of the Medicaid expansion, the Senate leader gets about $200 billion extra to pay off moderates like West Virginia Senator Shelley Capito, whose vow to “push for policies that result in affordable health care coverage for West Virginians, including those who are in the Medicaid population and those struggling with drug addiction” sounds very much like she is courting a legislative bribe

And there is a racial twist to all this. Liberals and the left like to highlight the 22 million people who will lose health insurance over ten years, and in recent months they especially like to point out that among those who will be deprived of coverage are many Trump supporters in Appalachia, who may now be rethinking their commitment to the GOP. That’s all true, but Republican strategists also know that the overwhelming proportion of those losing health insurance, especially among Medicaid recipients, are low-income minority people who are either Democratic voters anyway or are simply unlikely to vote. And while reporters and academics like to highlight the white working-class folks who will be deprived of Medicaid in Southern Ohio or Eastern Kentucky, the typical low-income Medicaid client is much more likely to be a Latino family living in East L.A. or an African-American family on the South Side of Chicago. Both districts are already solidly Democratic and therefore irrelevant to the political calculus of GOP strategists worried about 2018 or 2020.

A similar set of measuring tools holds for the GOP effort to end the prohibition against denying insurance coverage to people with preexisting medical conditions. “Guaranteed issue,” the legal and economic mandate that required insurance companies to sell a comprehensive policy to anyone regardless of their pre-existing health condition, had once been one of the few parts of Obamacare that enjoyed near universal applause. There was no obvious price tag attached to this mandate, nor any obvious class bias. Indeed, the proscription against denial of coverage on account of a pre-existing condition had a particularly beneficial impact on those middle-aged and more affluent Americans who before Obamacare had been shut out of the health-insurance market, even when they could afford it. Under Obamacare, all exchange policies had to offer ten essential benefits to any policyholder. This increased the overall cost of the average insurance policy, but also made sure that those with pre-existing conditions could actually buy one.

It therefore seemed that conservatives were shooting themselves in the foot when they demanded, first in the House bill, and now in versions of the Senate legislation, that the government no longer mandate that insurance companies cover such essential benefits or guarantee issue of an affordably priced policy for all. Most on the left thought of this GOP gambit as another example of free-market ideology run amuck, which was not really at variance from House Freedom Caucus efforts to eviscerate any and all Obama-era regulations governing the sale and subsidy of private insurance. In the Senate, Ted Cruz has put forth an amendment allowing insurers to once again sell whatever bare-bones coverage they desire, with just one ineffectual condition: that insurance companies would have to offer one plan that complies with Obamacare’s existing comprehensive benefits standard.

Most insurance companies have denounced this plan, arguing that the scheme will segregate the insurance market into one for the young and healthy, who are unlikely to need or want comprehensive coverage, and a smaller and much more expensive market for the old and sick, who will see their premiums, even with government subsidies, skyrocket.

But from the GOP point of view there is a profound logic to the Cruz/Freedom Caucus gambit. One of the real problems with the exchanges, especially for those not eligible for a government subsidy, has been the high premiums and even more burdensome deductibles. By allowing insurance companies to sell stripped-down policies to healthy young adults, the GOP right-wingers will demonstrate that for a considerable slice of the population, perhaps 30 or 40 million in all, their bare-bones plan will in fact reduce unsubsidized insurance costs, even as a smaller and less healthy slice find themselves in what amounts to a high-risk pool inadequately funded by federal or state governments. Insurance executives and social policy academics, not to mention liberal politicians and the sick themselves, may well decry the perversity and irresponsibility of such a dichotomous scheme, but GOP partisans are certain to crow in every campaign cycle that they have achieved what Obamacare could not: eliminated the individual mandate, revived the free market, and actually lowered premiums for tens of millions of grateful— and healthy—constituents. And the CBO agrees: in the out years it forecasts that insurance premiums will decline between 10 and 30 percent, albeit for policy-holders with a barebones, high-deductible policy.

Finally, Donald Trump has made a powerful contribution to the continuing vitality of an Obamacare repeal law. That’s not because of any skillful or persuasive jawboning on his part, but because his multiple scandals and misadventures have proven so mesmerizing that those who are most hostile to the GOP effort have repeatedly taken their eye off the ball. Too many liberals and leftists have been seduced by an impeachment psychosis that distracts them from the actual political fights, like that over Obamacare, where their voices and votes really count. Beyond the Beltway, the defense of Obama’s healthcare law remains the most efficacious mobilizer of liberal sentiment, but one would hardly grasp this from the news coverage on a liberal network like MSNBC. The Obamacare fight resembles trench warfare during most news cycles: a war of position and logistical mobilization. In contrast, the Trump-Russian imbroglio is a continuously evolving, ever newsworthy carousel of tweets, hearings, betrayals, scandals, and foreign intrigue.

Thus on July 24, the day before the crucial vote that would determine if the Senate would begin debate on an Obamacare repeal bill, I watched some of the news shows on MSNBC. Chris Matthews of Hardball led with a discussion of a Trump tweet referencing the president’s effort to denigrate Attorney General Sessions. That was followed by discussion of a USA Today poll that found 42 percent of all Americans in favor of impeaching the president. Matthews then reviewed the transgressions of various Trump associates, including his son-in-law’s denial of any campaign collusion with the Russians. Only during the third news segment, a half an hour into the show, did Matthews discuss the impending healthcare vote in the Senate, and this for but six minutes. Matthews put no experts forward to discuss the likely votes of Republican Senators, the changing internal makeup of McConnell’s legislation, or much else of any substance. Matthews did interview a GOP congressman, one not involved with the Senate fight, concluding the segment with his own assertion that divisions within GOP ranks would doom McConnell’s effort to get a Senate vote sufficient to begin the debate. Following a commercial break, Matthews reverted to Trumpmania, with a long segment on the president’s threat to pardon his family, his associates, and himself.

This pattern was repeated on shows hosted by liberals Chris Hayes and Rachel Maddow. Trump’s tweets and misadventures dominated the coverage, with the Senate Obamacare vote earning less than ten minutes on each show. Poignantly, when Maddow put Democratic Senator Ron Wyden on the show for a brief appearance, his assessment of McConnell’s prospects was considerably more realistic than that of the blithe news anchors chortling over GOP legislative confusion. Wyden seized his few minutes of broadcast time to implore liberal viewers to continue to put pressure on wavering GOP senators. He knew the fight was far from over.

And so it remains. Obamacare is indeed far from perfect—it needs a drastic and progressive overhaul. But its essential architecture, especially that of single-payer Medicaid, is highly progressive. That defense of this program has been and will remain an exercise in trench warfare: not just in Congress but in every state and county and at every town hall and demonstration. We face a determined and resourceful enemy. Recognizing that, and understanding the motivations and strategy of our opponents, represents an important step toward holding down the fort.


Nelson Lichtenstein is Distinguished Professor of History and Director of the Center for the Study of Work, Labor, and Democracy at the University of California, Santa Barbara.