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March 23 2017

Trump is struggling with the Art of the (Republican healthcare bill) Deal

via Washington Examiner
by Hadley Heath

On Thursday, President Trump met with members of the House Freedom Caucus to try to find consensus on the Republican effort to repeal and replace Obamacare. Negotiations were unsuccessful, and the House vote on the GOP bill, called the American Health Care Act, was postponed until Friday.

This may surprise some of Trump's most ardent supporters who see him primarily as a deal-maker and successful businessman, but it's no surprise to those of us who understand how daunting a task Republican lawmakers face when it comes to the healthcare issue.

There are primarily two challenges the repeal and replace effort must overcome. First, Republicans must find consensus. Second, their plan must pass muster with the Senate's rules regarding budget reconciliation one way or another. This means Republicans are now having two internal debates about policy and about strategy, but the two debates are strongly tied.

Free-market, limited-government conservatives can find a lot to like about the American Health Care Act: It repeals most of the taxes, spending, and mandates in Obamacare, resulting in a deficit reduction. And it reforms the Medicaid program.

But the key disagreement hinges not on taxes, spending, or mandates, but on the parts of Obamacare the American Health Care Act doesn't change: the regulations. Obamacare heavily regulated insurance plans, telling insurers what services they had to include in every policy (called "Essential Health Benefits") and strictly limiting how insurers could sell and price their plans.

Importantly, Obamacare required all insurance companies to offer policies to every consumer ("Guaranteed Issue"), and the law forbade insurers from using risk factors like health status, health history, gender, and to a limited extent, age, to determine how much individuals should pay for their plans ("Community Rating").

Conservatives would like to see these regulations repealed, because they are primarily responsible for today's high premiums and failing insurance "markets," but this is where the legislative strategy discussion – the inside baseball – becomes important.

Speaker of the House Paul Ryan and other House GOP leaders didn't include the repeal of these regulations in the American Health Care Act because they plan to use the budget reconciliation process to pass it, and they say the regulations can't be included.

The process for "regular order," or the process by which laws are usually passed, effectively requires 60 "yes" votes in the Senate (or otherwise the bill could be filibustered). For anyone keeping score at home, yes, the Affordable Care Act did pass the Senate with 60 votes, on Christmas Eve 2009, before Democrats lost their short-lived supermajority in the upper chamber in January 2010.

In contrast, the budget reconciliation process allows lawmakers to pass a budget bill with a simple majority in both houses (so, only 51 senators need to vote yes). But importantly, this process is supposed to be used only to pass provisions that impact the federal budget. It's not clear whether the regulations in Obamacare pass muster in this regard, although there's ever-increasing cause to believe they can.

Here's the rub: Some conservatives suspect that moderate Republicans are simply using the argument about the (unknown) limits of budget reconciliation as political cover: In other words, they don't want to vote to repeal the regulations that, while disastrous for health insurance markets, are popular with the American public.

Those on the Right need not level accusations against one another's motives: It's possible that House leadership was sincerely working under a certain assumption (that major regulations could not be included) about reconciliation when they first drafted the American Health Care Act. That doesn't mean the bill can't be amended or that a deal is somehow now out of sight.

If Trump wants to see a tremendous, beautiful deal on health care, he should think big, maximize options and use his leverage to undo the law's harmful regulations, since these are the sticking point for conservative members — more importantly, because repealing them would be the best policy. The pressure shouldn't be on conservatives to accept a half-measure if full repeal is in sight. The pressure should be on moderates to accept full repeal and fulfill the promise that is largely responsible for handing Republicans the House, Senate and presidency.

This means Trump should encourage Representatives and Senators to explore every (legal) possible avenue and find the limits of the reconciliation process. If in the end, the process prohibits conservatives from getting what they want, at least the exercise will have demonstrated as much, and trust within the party can be restored.

If the process proves successful, Republicans will be able to keep their promise of repealing all of Obamacare, and we will all be better off with freer health insurance markets where insurers can offer diverse plans at more affordable prices.

Hadley Heath Manning (@HadleyHeath) is a contributor to the Washington Examiner's Beltway Confidential blog. She is a senior policy analyst and director of health policy at the Independent Women's Forum, and a Tony Blankley Fellow at the Steamboat Institute.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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