Oliver Goodman, Managing Editor, JHU
Earlier this week, Senator Mitch McConnell announced there would not be a vote on the Graham-Cassidy health care bill, the latest iteration of the Republican repeal and replace agenda. McConnell ditched the effort after Senator Susan Collins (R-ME) declared her opposition to the bill, joining Republican stalwart John McCain of Arizona and libertarian physician Rand Paul (R-KY).
The bill’s main focus was to repeal the individual mandate and employer mandates, both pillars of the Affordable Care Act. The individual mandate requires that individuals purchase health insurance—and imposes a penalty, classified as a tax by the Supreme Court, on those who do not. The employer mandate dictates a basic level of coverage that employers must provide as part of employee health plans; it also stipulates what rates are affordable for firms with certain numbers of employees. The Graham-Cassidy bill would also phase out the Medicaid expansion that the Affordable Care Act provided, cutting federal funding to states by $215 billion between 2020 and 20261.
The Graham-Cassidy bill has been received more warmly than the Senate’s first attempt at healthcare legislation earlier this summer, but has still only earned approval from 20% of Americans2. Many are concerned over a provision, publicly highlighted in a Jimmy Kimmel monologue, that allows States to decide whether or not patients with pre-existing conditions must be covered, overriding specific protective measures in the Affordable Care Act.
That said, coverage for pre-existing conditions is the front on which much of the controversy regarding healthcare reform takes place; 90% of Americans believe that pre-existing conditions should be covered, and Barack Obama made this issue a focal point of his campaign in 2008.
The dismal approval ratings of both Senator McConnell’s earlier bill and the Graham-Cassidy bill beget the question: why pursue such an unpopular policy initiative? The answer to this is twofold.
First, Republicans who campaigned on a repeal-and-replace agenda are eager to demonstrate that they can competently govern. Adding to this urgency is President Trump, who has expressed dissatisfaction with the leadership skills of both Speaker Ryan and Senate Majority Leader McConnell who have failed to unite their party behind a bill.
The accelerated and highly partisan nature of this process is the main reason for Senator McCain’s objection to the bill, and he’s not alone; 42% of American’s disapprove of the speed at which Republicans have attempted to push this bill through Congress.
The second reason for pursuing such an unpopular healthcare agenda is purely fiscal. In fact, the process through which this bill has been introduced is called reconciliation, and is an inherently fiscal exercise. Budget reconciliation is a process intended to reduce the national deficit by giving directives to Congressional committees on how much money to save.
The rules of reconciliation both expand and constrict Republican options in this circumstance. They give Republicans a filibuster-proof method of passing a bill: only a simple majority of votes is required to pass a reconciliation bill, but the reconciliation period ends September 30th and only legislation directly related to the budget can be included. This means that only the monetary enforcement mechanisms of the Affordable Care Act can be stripped away, not the regulative structure of the bill.
Republicans are also using Reconciliation as a way to reduce debt before they attempt tax reform. In fact, the deep cuts to Medicaid that make the bill so unpopular are a method of cutting government spending before they introduce a tax reform bill that the Urban Institute and Brookings Institution Tax Policy Center already predicts will shrink federal revenues by nearly seven trillion dollars over the next decade3. Tackling healthcare before tax reform was an effort on the part of Republican leadership to balance their budget sheet, coupling a spending cut with a decrease in tax rates.
With tax reform up next on the agenda, it seems that passing a repeal-and-replace bill is a lost cause for Republicans. This is not a surprise; despite controlling both arms of Congress and the Presidency, the Republican party is in a structurally weak position to pass a health care bill right now. To illustrate this, simply look at the Senators opposing the bill.
The first is Susan Collins, a Republican from Maine. She cites the negative impact deep Medicaid cuts will have on her state—and she’s far from the only Republican Senator whose constituency will be hit hard by this. Many rural Trump voters in States like Michigan and Virginia will also be adversely impacted by a decrease in Medicaid funding. Medicaid is both highly used and highly important in these areas; nearly one in every four nonelderly rural individual gets their coverage through Medicaid, and it helps facilitate health care in areas where provider shortages and long commutes to hospitals impose barriers4.
The second Senator who stands in opposition is Rand Paul from Kentucky. Paul objects to the bill for a totally different reason. He is a libertarian, and his philosophical objections to the Affordable Care Act stem from his belief in the limited role of government. He opposes the Graham-Cassidy bill because he believes it does not go far enough in its effort to strip regulations or deflate funding. Paul’s sentiments have been echoed by fellow far-right Senators during this debate process, including Ted Cruz, Jerry Moran and Mike Lee.
The final defector from the Republican party is the most prolific of the three, Arizona Republican John McCain. McCain formally cited what he believed to be a breakdown of partisan standards and procedural orders in Congress as his reason for not supporting either the Graham-Cassidy bill or its predecessors. McCain is also the most politically impervious of the objectors.
At 81 years old, and after receiving a brain cancer diagnosis, he will almost certainly not seek reelection. Even if McCain were beholden to the same political fundraising forces that govern other election-seeking Republican Senators, his place as a legend in American politics confers unique status. As both a former Republican nominee for President and war hero, McCain is not as reliant on the party’s promotion of his agenda as some of his compatriots are.
For Republicans, healthcare is more of a talking point than an achievable goal. Passing health care reform would only be in the interest of matching campaign rhetoric; the party is too factious to back a comprehensive piece of legislation. Because of the internal tension between congress members who are part of far-right groups like the freedom caucus, and moderate Republicans scared to lose their state’s Medicaid funding, holdouts will ensue, and both radical and moderate politicians will continue to stubbornly holdout on their own positions while lambasting their opponents for failing to compromise.
The failure of this legislation may even be a positive for Republicans. The political consequences of a hurried bill that slashes Medicaid funding for a huge section of their electorate could have devastating effects on the 2018 and 2020 elections. As long as the Republican party remains divided, they will not pass a bill to replace the Affordable Care Act.
1Carpenter, Elizabeth, and Chris Sloan. “Graham-Cassidy-Heller-Johnson Bill Would Reduce Federal Funding to States by $215 Billion.” Avalere.com, Avalere, 20 Sept. 2017.
2Maake, Katishi. “Poll: Majority Disapproves of Graham-Cassidy Bill.” CNN, Cable News Network, 25 Sept. 2017.
3Nunns, James R, et al. “An Analysis of Donald Trump’s Revised Tax Plan.” Taxpolicycenter.org, Urban Institution and Brookings Institute Tax Policy Center, 18 Oct. 2016.
4Foutz, Julia, et al. “The Role of Medicaid in Rural America.” The Henry J. Kaiser Family Foundation, The Henry J. Kaiser Family Foundation, 11 May 2017.