The word around Capitol Hill is that Republicans are preparing to revive the dormant American Health Care Act after members return from their Easter break. Lawmakers have tried adding some conservative muscle to the bill in an effort to make weight. But a central reason why the AHCA could be back in the ring is that it now has some added clarity.
Take the legislation’s treatment of health care consumers with preexisting conditions—which has come to mean those with an expensive medical issue who might be denied insurance if they weren’t already insured. The original text authorized money for the creation of a “stability fund” for states to directly subsidize such individuals, as well as the insurers who cover them. State governments could use the money to establish reinsurance programs and high-risk pools, with the goal of sequestering costly patients and their premiums from the broader coverage pool. By design, the burden for subsidizing those with preexisting conditions would be transferred from younger, healthier consumers to taxpayers en masse.
House speaker Paul Ryan touted this plan during a 23-minute PowerPoint presentation about the bill in March. “We want to protect people with preexisting conditions. We think that that’s very important. That has actually been a cornerstone of Republican health care proposals all along,” he said. All well and good. But the fund contains just $100 billion over nine years, much less than what policy experts, including those like James C. Capretta and Tom Miller on the right, have said would be necessary for such an approach to “function properly.” And the AHCA left in place Obamacare’s mandates on insurers for covering those with preexisting conditions, making the fund appear like a supplement to the current law. The former issue could be enough to make moderates uneasy. The latter was evidently enough to make many conservatives oppose the bill.
To the rescue came four GOP lawmakers and Vice President Mike Pence, who has been a facilitator for conversations about how to change the legislation. Prior to the two-week Easter recess, Congressmen Gary Palmer and David Schweikert, both of the conservative House Freedom Caucus, proposed a federal risk-sharing program to further offset the cost of insuring pricey individuals. It’s a $15 billion expense from 2018 through 2026, and it could be supplemented by leftover resources from the stability fund. It would come under state control starting in 2020. The idea has party-wide support, according to Republican leadership; it was adopted in the Rules Committee before members flew back home for the recess.
On the issue most pertinent to Freedom Caucus leaders like chairman Mark Meadows, there appear to be the makings of agreement on granting states the power to waive certain Obamacare regulations. The thinking is that this approach could pass Senate muster. According to draft principles of an amendment to the AHCA from Meadows and moderate Tuesday Group co-chairman Tom MacArthur, state governments could seek “limited waivers” from two mandates of particular interest to conservatives: “community rating,” which requires insuring groups at the same price no matter what their individual differences in age, sex, health status, etc., and a portfolio of “essential health benefits” required in all plans. (The amendment still prohibits considering gender in calculating premiums.) Preventing insurers from differentiating premiums based on health status while still forcing them to cover all comers has long troubled conservatives who worry that such policy leads to economic disaster. The Meadows-MacArthur document, first published by Politico, retains Obamacare’s “guaranteed issue” of insurance. But tampering with community rating would make plans more expensive for higher-risk consumers. Pumping money into risk pools figures to offset that.
Republicans are playing soft-toss with an egg on this one. A March CNN poll found that 87 percent of Americans support “maintaining the protections offered to people with pre-existing conditions under Obamacare.” The mechanism for those protections is complex and rarely discussed in the mainstream media; it’s unlikely even 8.7 percent of Americans understand the details. But word spread even before last week that the White House and the Freedom Caucus were discussing the waiver idea, and ominous headlines permeated the press. Not just from partisan shills, either: The excellent New York Times health care reporter Margot Sanger-Katz, for example, wrote a piece headlined “Republican Health Proposal Would Undermine Coverage for Pre-existing Conditions.” Imagine you’re a GOP lawmaker having to defend why you support “undermining” a major provision of law supported by 9 out of 10 constituents.
Still, waivers offer a selling point to anxious moderates, Yuval Levin wrote in National Review. They’re not necessarily just for doing away with Obamacare’s preexisting conditions protections—they’re for allowing states to adopt protections of their own, which presumably could include forms of community rating and essential health benefits requirements at their discretion.
The Meadows-MacArthur principles imply that states are only eligible for waivers if they can demonstrate to health officials in Washington that their ideas would improve their markets. The waiver approach “tells states they will be given what the Freedom Caucus wants to give them only if they can show that they would use it to achieve what the Tuesday Group wants to achieve,” as Levin put it.
The Tuesday Group is concerned about access and the Freedom Caucus about cost and flexibility. According to Ryan, the divide between the factions “is narrowing quite quickly.” But that’s still not enough to characterize chatter about an AHCA sequel as anything more than speculation. Republican disagreements were “narrowing” before part one fell apart, too.
Chris Deaton is a deputy online editor at The Weekly Standard.
