House Speaker Paul Ryan, R-Wis., is making an aggressive effort to convince conservatives that his current plan to overhaul the healthcare system is "what good conservative healthcare reform looks like."
But the reality does not match the rhetorical case Ryan is making.
"It repeals Obamacare's taxes; it repeals Obamacare's spending; it repeals Obamacare's mandates," Ryan told reporters this week. "It creates a vibrant market where insurance companies compete for your business. Where you have lower costs, more choices, and greater control over your healthcare. And it returns power—this is most important—this returns power from Washington back to doctors and patients, back to states. This is what good, conservative healthcare reform looks like."
Let's take these comments apart piece by piece.
To start, it is true that the House GOP proposal appeals most of Obamacare's taxes, leaving the "Cadillac Tax" on high value employer health plans technically in place, but delaying it so long into the future (until 2025!) so there's no reason it will ever actually get implemented.
Though a Congressional Budget Office score does not yet exist, it's safe to say that it reduces spending relative to Obamacare, but it does not, by any stretch of the imagination, repeal all of Obamacare's spending. The bill would keep Obamacare largely intact between now and 2020, and presumes that Republicans would have the political will to let spending cuts go into effect during a presidential election year.
Assuming they do, after 2020, it still makes allowances for enhanced Obamacare-level spending to cover individuals who signed up for expanded Medicaid by that time. And it replaces Obamacare's subsidies to purchase insurance with a new federal subsidy scheme.
In addition, the bill introduces new spending that wasn't even in Obamacare. For instance, it proposes $10 billion in "safety net funding" for states that did not expand Medicaid and $100 billion in spending aimed at stabilizing insurance markets. It used to be that Republicans believed that market forces were the best way to stabilize markets, not a massive injection of federal funds.
And though it repeals the penalties attached to Obamacare's individual and employer mandates it retains other mandates that have driven up the cost of health insurance: such as the requirement that insurers cover individuals with pre-existing conditions and mandates on what types of benefits insurers must offer.
As a result of the spending and regulations that are retained by the bill, the rest of Ryan's comments cannot possibly be true.
If the federal government is dictating the design of insurance policies and imposing regulations that naturally drive up the price of insurance, then the market won't be vibrant, consumers won't have more choices, and they won't experience lower costs. Meanwhile, the plan engages in another bit of social engineering in an effort to coerce younger and healthier individuals to the market: if individuals go more than roughly two months without health insurance in a given year, they'll have to pay a 30 percent premium surcharge if they then apply for insurance.
It's true that the Medicaid reform, should it be enacted in 2020 as written, does provide more flexibility to the states by giving them a fixed amount of money per beneficiary and allowing them more control over the design of their programs. But given that the federal government, under this bill, would still be usurping the ability of individuals to purchase the type of insurance they want, handing out subsidies, and throwing money at insurance markets in an effort to stabilize them, it's hard to see how this removes control of the overall healthcare system from Washington.
The current healthcare plan proposed by Republicans, in preserving a lot of spending and regulations, was designed to blunt Democratic attacks that they are stripping health insurance away from millions of people. But by providing less generous subsidies than Obamacare, the GOP is already subjecting itself to such an attack. Because it repeals Obamacare's taxes but retains a significant amount of spending, it isn't clear it would reduce the deficit. If it doesn't, Democrats could be able to use a score from the Congressional Budget Office to make the following politically potent attack: the Republican plan throws millions of people off of health coverage while increasing deficits.
If Republicans were to have pushed a true free market plan, it would have removed the regulations and mandates on the type of insurance that must be sold and drastically reduced spending through Obamacare. By reforming the tax code, it could have used money from changing the bias in favor of employer-based coverage to help individuals purchase coverage in an open market. To be sure, under this scenario, Republicans would still be fighting off attacks that their plan covers fewer individuals than Obamacare. But they'd also be able to credibly argue that their plan reduces premiums, increases choices, reduces spending, and cuts deficits. This would all fit into the narrative that they've been trying to push for months: Obamacare was an unsustainable promise, they inherited a mess, and they had to act responsibly to clean it up.
If Ryan wants to limit his argument to insisting that this is the best Republicans can come up with given the fragile Senate majority and the complicated parliamentary maneuvering required to secure passage, it would still be a faulty argument, but at least it would be within the realm of debatable. But calling this federal healthcare scheme "conservative" just because Republicans were the ones to concoct it is a farce.
Editor's note: In the absence of a CBO estimate, I softened the language predicting how the bill could be scored.