The Senate’s sickening health care fiasco

July 28, 2017

Christopher Baum and Alan Maass report on the collapse of the Republicans' anti-Obamacare crusade--and explain why the health care crisis will persist anyway.

THE LONG-cherished Republican dream of repealing and replacing Barack Obama's Affordable Care Act (ACA) has been dashed on the floor of the U.S. Senate.

Late Thursday night, after weeks of trying and failing, Senate Republicans thought they would be able to eke out a majority vote for legislation that would have partially repealed the ACA--even though a number of Republicans said publicly that the measure was so inadequate they didn't want it to become law.

But in a dramatic last-minute twist, John McCain cast the deciding vote for a 49 to 51 defeat of the Republicans' last real hope of keeping their anti-ACA crusade alive, at least for now.

Ironically, McCain had returned to Washington two days before from treatment for brain cancer to cast the deciding vote to open debate on health care legislation, giving Senate Majority Leader Mitch McConnell a reason to hope that victory in some form was at hand.

But McConnell never won another vote to actually pass a health care measure.

After defeats on more substantial "repeal and replace" proposals and even a simple "repeal only" of the ACA, the Republicans were ready to settle for a so-called "skinny" repeal proposal that would have eliminated some of the most unpopular ACA measures--but whose main purpose was to throw the whole mess back to a "conference committee" of Republicans from the House and Senate to try again for another compromise.

Senate Majority Leader Mitch McConnell speaks with reporters
Senate Majority Leader Mitch McConnell speaks with reporters

Then McCain jumped ship, and the GOP's "repeal and destroy" mission fell apart.

It was a humiliating fiasco for Republicans--and a victory for those who stood up to the GOP's attempt to further harm health care for working people and the poor in order to hand out tax breaks to the rich.

But even so, some difficult truths need to be acknowledged: Even without a new health care law, Donald Trump and the Republicans are still in a position to inflict damage on an ailing system--a system that is already drifting deeper into crisis, regardless of what Republicans do.

That's because the ACA--far from achieving its goal of providing affordable coverage to all, or close to all, Americans--has made health care more expensive, chaotic and inaccessible in many important ways. Obamacare, by preserving the for-profit character of health care in the U.S., set the stage for a more vicious assault to come.

Trumpcare may be doomed for now, but the ACA status quo is still a disaster. We need a movement that not only protests what we don't want, but puts forward what we do: an expanded Medicare-for-all, single-payer system.

AFTER YEARS of symbolic bills that they knew would be vetoed by Barack Obama if they weren't stopped first by congressional Democrats, leading Republicans must have thought their scheme to "repeal and replace" Obamacare was in the bag this year.

They had majorities in both houses of Congress--and, crucially, a Republican in the White House who had regularly promised to "repeal and replace" while on the campaign trail. On his first day in office, Donald Trump showed his commitment to making good on his promises with an executive order instructing the new administration to do all it could legally to dismantle the ACA.

Now, after half a year of bluff, bluster and bumbling, congressional Republicans are on the verge of failure.

Before this week, McConnell had to give up on two previous attempts to bring health care legislation to a vote. With only a narrow Republican majority, he was blocked by opposition from two sides--the most reactionary GOP senators who didn't think McConnell's version of Trumpcare went far enough, and a handful of "moderates" fearful that the Republicans would be held responsible for the nightmare to come if their legislation becomes law.

It was a rerun of the dilemmas facing House Speaker Paul Ryan months earlier. Ryan overcame two false starts to win narrow approval in the House for the American Health Care Act by appeasing the ultra-right in the final version of the bill.

McConnell tried the same tactic by adding a controversial amendment from right-winger Ted Cruz that would have further loosened requirements that insurers cover essential health benefits and services. But McConnell also tried to win over the "moderates" by, among other things, retaining two taxes on the wealthy implemented under the ACA, which Trump and the Republicans want to eliminate.

Neither side was happy with the concessions to the other, and Trumpcare seemed stalled again.

Adding to McConnell's troubles, the Senate parliamentarian ruled this week that key provisions of his proposal fall outside limits of so-called "budget reconciliation," and so his bill needed 60 votes, not just 51, to pass. Among the provisions affected by this ruling are those nearest and dearest to the hearts of conservative Republicans, such as defunding Planned Parenthood and prohibiting the use of government subsidies to purchase health care plans that cover abortion.

Then came McConnell's latest scheme--concocted under pressure from an irate twitterer-in-chief, who continued abusing Republican senators throughout the week--to vote to proceed to debate, though no one seemed really sure what they would debate and vote on.

But after that "triumph" on Tuesday, nothing went right for Republicans. McConnell's proposal for "repeal and replace," incorporating the amendments from Cruz and other Republicans, went down by a wide margin of 43 to 57. On Wednesday, a "repeal only" plan was defeated, by a smaller but still-comfortable margin of 45-55.

Having found it impossible to find a majority of senators to vote for the Republicans' more substantial proposals, McConnell elected to punt--with the so-called "skinny repeal" proposal that was never intended to be a final version that would become law.

"Skinny repeal" was a maneuver to get the process out of the public eye--and give Republicans the chance to come up with yet another version in the conference committee. But even that didn't work.

ONE OF the confusing aspects of the Republican health care fiasco is that some of the most furious opposition to the various versions of Trumpcare came from right wingers who think the bills didn't go far enough in dismantling the ACA.

That's hard to understand, because for anyone not in the 1 Percent or close to it, everything the Republicans took up was a nightmare in the making.

The centerpiece of all the "repeal and replace" proposals was a drastic reduction in the federal government's Medicaid health program for the poor.

The ACA attempted to expand Medicaid eligibility to cover most people with income at or below 138 percent of the federal poverty level. The Republican plans would roll back the Medicaid expansion in all states, and impose a new per-person spending cap on the portion of the program that remains. They would also, in common with the House bill passed in May, permit states to impose work requirements on Medicaid enrollees.

In addition, the GOP wants to drastically reduce Obamacare's subsidies to individuals who must, under the ACA individual mandate, purchase non-group insurance plans. The subsidies go to people whose income falls within a range of between 100 and 400 percent of the poverty line.

The combined effect of these cuts, in all of the Republican proposals this year, was the elimination of more than a trillion dollars in support for people on the lower end of the income scale to help them access health care.

The legislation passed by the House proposed cuts to Medicaid and subsidies totaling $1.11 trillion over 10 years--with about three-quarters of the cuts coming in Medicaid. Incredibly, McConnell's first Senate proposal, which was supposed to be less heartless than the House's, cut a total of $1.18 trillion from Medicaid and subsidies.

All of the GOP proposals were estimated to add in excess of 20 million people to the ranks of the uninsured over the next decade--though the "repeal only" bill floated by Trump tops them all at 32 million new uninsured.

WE CAN celebrate that "repeal and replace" has collapsed. But it would be a grave mistake to suppose that the GOP's assault is at an end.

For one thing, Trump has the potential to wreak great havoc without any help at all from Congress. Rather than simply "let" Obamacare fail, as he continually threatens on Twitter, Trump can take steps to ensure that it does.

For example, as the New York Times reported, Trump could unilaterally suspend payment of cost-sharing reductions (CSRs)--subsidies established by the ACA that are paid directly to insurance companies to help cover out-of-pocket costs for lower-income people who buy policies on the "exchanges" established by Obamacare.

The White House has announced that it will make the CSR payment for July, but the status of the subsidies is, according to deputy press secretary Sarah Huckabee Sanders, "undetermined beyond that."

The Times article points out that this could lead more insurance companies to pull out of selling policies under the ACA exchanges. But the truth is that the pullouts began some time ago--a prime indication of the trouble Obamacare was already in, quite apart from anything Trump might do to it.

In May, Reuters reported that insurance giant Aetna had pulled out of the Obamacare exchanges in Delaware and Nebraska, completing its withdrawal, begun in 2016, from every exchange in which it had participated. Meanwhile, Humana and UnitedHealth Group "have also pulled out of most of the government-subsidized individual health insurance market," Reuters noted.

From the point of view of the insurance companies, the ACA exchanges put them in the position of offering policies to too many "high-risk" consumers--that is, those who are likely to require substantial payouts due to chronic or serious health conditions--compared to "low-risk" customers who need only minimal care.

In the twisted world of insurance companies, too high a percentage of high-risk policyholders--that is, too many sick people--means an unacceptably high amount of money paid out, and thus an unacceptable loss of profits.

The ACA's solution to this problem for the health care industry was the "individual mandate," which requires most Americans to either purchase health insurance or pay a tax penalty.

The individual mandate, and the CSR payments that help to support it, generate billions of dollars a year for the insurance industry. The CSRs alone are estimated to total some $7 billion in 2017.

Nonetheless, insurance providers such as Aetna and UnitedHealth had already decided--before Trump came along to add extra uncertainty--that the system wasn't profitable enough. A Consumer Affairs report from November 2016 describes, for instance, how UnitedHealth made the decision to exit the ACA exchanges last year--despite record profits in 2015 and projections indicating an "even better year" as of mid-2016.

The consequences of insurer pullouts can be seen in the limited, and sometimes nonexistent, enrollment options projected for many consumers in 2018.

According to the New York Times, residents of 45 counties, totaling 35,000 people, may discover there are no insurance carriers at all to choose from on the ACA exchanges--and a further 3 million people in 1,388 counties may have only one carrier to choose from.

WHILE THE Republican attempts at "repeal and replace" were floundering, where did the Democrats stand?

Now that the GOP has failed to get a bill through the Senate on a strict party-line vote, they will either have to leave it to the administration to dismantle as much of the ACA as possible--or seek some form of compromise with at least some Democrats. That's what John McCain was calling for explicitly with his vote to defeat the "skinny repeal" proposal.

On July 18, Senate Minority Leader Chuck Schumer set out the official Democratic position: "Rather than repeating the same failed partisan process yet again, Republicans should work with Democrats on a bill that lowers premiums, provides long-term stability to the markets, and improves our health care system."

Though the remark was probably intended as a mere rhetorical talking point, Schumer's choice of words is actually very revealing.

The only way to ensure "long-term market stability" under either Obamacare or Trumpcare is to create conditions that are sufficiently profitable for the insurance companies that they will remain in the marketplace--which brings us to the fatal flaw at the heart of the ACA itself.

Obamacare is dependent on the participation of private, for-profit insurance companies. Without them, the whole system collapses. Therefore, keeping the insurance vultures happy must be a top priority. That means making sure that the system remains profitable for the insurers--which means in turn that the health care options available to consumers will be determined not by what they need, but by what the insurers want.

That's why, as of the end of 2016, there were still some 28.6 million people in the U.S. without health insurance. It's why 63 million people last year reported "not getting needed care because of cost--including many who did have some form of health insurance.

It's why, under Obamacare today, individuals and families who qualify for a "hardship" or "affordability exemption"– meaning they are unable to afford any of the plans normally available to them under the ACA--receive no assistance beyond a waiver of the tax penalty under the individual mandate, plus the opportunity to buy a laughably inadequate "catastrophic health plan" which won't cover anything until they've spent enormous sums out of their own pocket.

It is also telling that Schumer spoke not of lowering overall health care costs, but of lowering premiums.

As the San Jose Mercury News reported in 2016, there is a growing trend towards low-premium, high-deductible plans, particularly in the realm of employer-provided health care coverage.

These plans are doubly beneficial to insurers: The low premium makes the policies attractive to individuals or employers seeking "cheap" health care, while the high deductible means the individual policyholder or employee ends up paying a significantly higher portion of the overall cost of care.

So people are stuck with insurance that is only really "affordable" if they don't actually use it.

All this focus on "affordability"--reflected in the name of the ACA, no less--necessarily implies a system where the individual will always be expected to cover at least part of the cost of their health care out of their own pocket.

That this assumption goes unchallenged, even by the most supposedly "progressive" members of the Democratic Party, reveals the extent to which both parties are committed to the neoliberal creed of "personal responsibility"--where lavish government handouts are reserved for Wall Street, big business and the obscenely wealthy, while everyone else is expected to shoulder "their fair share" of any economic burden.

In practice, our "share" is anything but fair. As Helen Redmond wrote in the International Socialist Review in 2014, for millions of people, Obamacare isn't a matter of affordable care, but of "unaffordable underinsurance."

OF COURSE, the Republican plans to replace the ACA are much worse in nearly every detail. It is no accident that the most positive elements of the ACA--Medicaid expansion, a robust list of "essential health benefits" to be covered by all policies, guaranteed protection for patients with pre-existing conditions--would be gutted or destroyed entirely if any of the versions of Trumpcare ever becomes law.

This is no trivial matter. As the Congressional Budget Office analyses of all the various Republican bills made clear, the well-being of literally millions of people hangs in the balance.

But at a fundamental level, the two parties agree on the government's role in the health care system: to provide limited financial assistance to a limited number of people, and then expect these individuals, along with everyone else, to pay for their own health care coverage.

This vision is inhumane and unacceptable. We must instead demand a health care system whose aim is to provide comprehensive health care for all people--without exception.

All of the various problems of the U.S. health care system--from insurers pulling out of the ACA exchanges, to underinsurance and high out-of-pocket costs for policyholders, to millions of people still having no coverage at all--could be solved at a single stroke with a national single-payer, "everybody in, nobody out" health care plan.

These problems melt away when health care is no longer something you must pay for, in whole or in part, but something that is guaranteed by the state as a basic human right.

Neither Trumpcare nor Obamacare will do. We must demand single-payer health care for all.

Further Reading

From the archives