The Healthcare Bill Debacle: Ryan Edition

Having addressed Pres. Trump’s role in the failure of the House GOP’s healthcare bill (AHCA) yesterday, it seems only fair to assess House Speaker Paul Ryan’s role, as he had slightly different motives to make many of the same mistakes.

Tim Alberta‘s port-mortem included what I think is the key point: “In dissecting Ryan’s lackluster marketing of the health care initiative, both his allies and adversaries in the Republican conference reached the same conclusion: He had taken support for granted. After all, this was essentially the same bill written by Price when he was in Congress; it became the de facto proposal of the House GOP in its ‘Better Way’ agenda, which Ryan argued throughout 2016 was a governing document that his colleagues universally supported. ‘We all ran on this,’ Ryan said repeatedly over the past several weeks.

“Except that many House Republicans never saw it that way. In fact, some conservatives spent the past year using ‘Better Way’ as a punch line to tease the speaker for convening wonky groups to dream up big policy proposals—but never hold votes on any of them. If there had been committee hearings and floor votes, some conservatives argue, these differences would have surfaced much sooner. ‘We ran on these principles, but not on this bill,’ Meadows told me last week. (Meadows was, however, once a co-sponsor of Price’s bill in Congress.)”

Ryan should have recognized that even last year’s repeal bill vote was not live ammo.  Indeed, he probably did realize it.

Avik Roy noted that “despite repeated promises to bring the Obamacare replacement before a vote, Ryan did not do so, because there wasn’t enough consensus in the House as to how to replace Obamacare,” adding: “The lack of consensus wasn’t created by Ryan. Because the U.S. health care system heavily subsidizes health coverage for retirees and upper-middle-class workers, many Republican voters are fine with the status quo ante, and opposed to changes that help others at their expense.”

Roy argues that Paul Ryan and other GOP leaders never made the moral case for helping the uninsured, which is true enough.  But the immediate problem for AHCA was that the bill, like Obamacare itself, was a two-headed beast — and Ryan seemingly only cared about one of the heads.

The reason for Ryan to try to cram AHCA through Congress in 18 days was that his primary concern was banking its deficit reduction before proceeding to tax reform which, despite the rhetoric, is going to be difficult to make revenue-neutral.  Thus the focus of Ryan and House leadership was on reforming Medicaid, which was the source of the big savings in the bill.  This also makes sense when you consider that Ryan is very much about entitlement reform (as am I).

Given that focus, it’s no surprise that the Medicaid piece of AHCA was pretty darned good (at least from my point of view; the coverage losses put off moderates).  It’s also no surprise that the Medicaid piece was where Ryan and the White House were most willing to accept suggestions from the House Freedom Caucus (HFC).  But Medicaid was just one head of the beast.

In contrast, the parties dispute whether Ryan or Trump ever really offered the HFC much on the essential health benefits regulations that were a core part of the other head of the beast — reforming the failing individual health insurance market.

Telling conservatives that you’re repealing the individual mandate only works as a selling point if you assume they’re yahoos who — after losing the mandate issue in the Supreme Court — don’t care that AHCA simply substituted a less effective insurer surcharge that would accelerate the death spiral by about two million more people deciding to forego coverage.

Had Ryan been willing to negotiate with the HFC and arrived at the point where he wasn’t going to be able to get enough of their votes short of repealing guaranteed issue and community rating (the essence of covering those with pre-existing conditions), he and others would have a much stronger case for blaming the HFC as intransigent.  We’ll never know if Ryan could’ve gotten more votes by not forcing 50-year-old men to buy maternity coverage.

But Ryan seemingly wasn’t interested in negotiation (and as noted yesterday, Trump wasn’t capable of it).  Instead, Ryan was interested in Medicaid reform and deficit reduction.

That’s how you wind up with the insurer fine standing in for the ACA mandate and refundable tax credits standing in for ACA subsidies on the other half of the bill.  BTW, means-testing those credits was one of the few concessions HFC got on the individual market side of AHCA.  But those bent on placing all the blame on HFC don’t want to admit that accepting the tax credit framework was already a concession by the HFC.

It’s also how AHCA wound up with scores showing that near-retirees would see their insurance premiums increase 760% in the short-term.  It’s how you don’t bother to ask the Senate parliamentarian whether regs can be repealed in reconciliation bills.  It is the tell that Ryan’s attention was elsewhere.

This failure has far-reaching ramifications, not least for Ryan himself.  His Speakership isn’t in danger; we’ve just had a lesson in the difficulty of finding a suitable compromise within the House GOP caucus.

No, the ramifications come from the failure of the Medicaid piece of AHCA.  Although White House spox Sean Spicer is already hinting that the GOP will eventually revisit healthcare reform, and Ryan agrees,  there’s little chance that Ryan’s ideas will be treated as Gospel when they do.

More immediately, that failure will affect the tax reform effort, as Ryan likely feared.  Indeed, the current proposals floating around don’t contain much in the way of tax relief for the middle class, and the populist Trump may insist on adjustments that are likely to further box in the GOP absent those Medicaid savings.

Further into the future, the AHCA debacle is likely to reinforce Trump’s natural inclination to resist reforming Medicare and Social Security, which is Ryan’s real dream.

In sum, by trying to stampede his caucus into a bill that was not well thought-out with regards to one of the heads of the beast, Ryan may have doomed himself to presiding over another decade of accumulated debt and unreformed entitlements while the clock on the debt bomb continues its inevitable countdown.  That’s his punishment as well as ours.

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