Obamacare repeal is back, and it's still bad

The policy stakes in 2024 matter a lot

Last week, North Carolina became the fortieth state to expand Medicaid, meaning about 600,000 low-income people will soon be eligible for health insurance. Unfortunately, these programs never have 100% uptake, but even so, a North Carolinian who is eligible and finds herself in need of medical services will be able to sign up and get the care that she needs. This is happening because North Carolina has a Democratic Party governor, Roy Cooper, and because the GOP’s state legislature (unlike the one in Wisconsin) eventually relented on the Medicare point.

It’s also an important reminder, I think, of the importance of banal policy stakes in politics — Cooper is not the only red state Democratic governor to have accomplished this since the Affordable Care Act passed in 2010.

Cooper’s operating in a red-shaded state, but governors like Andy Beshear in Kentucky and former governor Jon Bel Edwards in Louisiana have pulled it off, too. The largest non-expansion states, Texas and Florida, are to the right of North Carolina but the left of Kentucky and Louisiana, and trying to win governors races in those states ought to be a high priority. Democratic candidates will require some good luck to win those states, but they’re also going to have to be candidates who take some positions that are decidedly to the right of Joe Biden on at least some topics. There are a lot of nuanced conversations one can have about exactly what those positions should be and in which states and how moderation interacts with authenticity, but if you want people who voted for Trump twice to vote for a Democrat, you’ve got to give them something. And as Medicaid expansion shows, the practical benefits of winning are, in fact, very large. You don’t even need apocalyptic tales about nefarious GOP evils — Republicans are sincerely very hostile to Medicaid expansion, and the only way to get it done is to beat them.

Meanwhile, Donald Trump has been on the campaign trail, reminding everyone that he wants to repeal the Affordable Care Act. This would cost hundreds of thousands of North Carolinians — and millions of people in other states — their eligibility.

This is, of course, nothing new. Trump ran on ACA repeal in 2016, he promoted ACA repeal in 2017, he came within one senate vote of achieving it, then, even as Republicans stopped talking about it as a campaign issue, his White House asked the Supreme Court to strike the whole law down in 2020. John McCain is no longer with us, and a new GOP congressional majority backed by the White House could, at a minimum, significantly roll back these programs. The Republican Study Committee is too disciplined to explicitly say they want ACA repeal, but they have proposed $1.9 trillion in Medicaid cuts and reducing the federal regulatory floor on the quality of insurance company offerings. And that’s worth talking about.

Why Republicans need Medicaid cuts

The press often fails take the substance of what Trump says seriously, instead psychologizing and personalizing everything that he says.

But even though more disciplined GOP figures would by this point probably know better than to characterize their legislative agenda as ACA repeal, there are fairly deep reasons for the party to pursue it. The main one is that with full employment finally restored, the budget deficit is back on the agenda as a non-fake issue. In other words, while there was a lot of deficit talk back in 2010-2013, there was never a moment when the budget deficit was a practical problem.

Today, by contrast, a few different things are going on.

One is that even thought the Fed should start cutting interest rates next year as inflation slows, there’s no reason to think rates will go all the way back down to zero. Another is that the formal expiration of the Medicare and Social Security Trust Funds is looming, which is likely to force congress to make some changes. And the third is that in this context, Republicans want to do a $3.4 trillion expansion of Trump’s Tax Cuts and Jobs Act. This is going to raise inflationary pressure on the economy, especially in the context of Trump’s plans to reduce Americans’ ability to import foreign goods and to shrink the American labor force.

That doesn’t guarantee that a new GOP trifecta will enact big spending cuts. But it means they will face pressure to do so. Because absent big spending cuts, we’re going to have high interest rates and low business investment, and voters are going to be upset.

The money for those cuts has to come from somewhere. Republicans don’t want to cut the military (if anything, they want to increase spending), they don’t want to cut back on border security and other national security functions. And there just isn’t that much money in the rest of the discretionary budget. In this congress, Republicans keep psyching themselves up to propose draconian cuts to non-defense discretionary spending, then failing to write specific appropriations bills that actually pass. As fiscal pressure ratchets up, they’ll need to look at wider categories of spending, including Social Security, Medicare, Medicaid, and the ACA subsidies. I don’t have a specific prediction as to exactly what Republicans will do about this in 2025-2026, but they’ve clearly decided that yanking coverage from poor people is more viable than taking it from the elderly, which suggests some kind of effort to go after Medicaid and the ACA more broadly.

The ACA has been successful

In some ways, the Affordable Care Act did not work out as its designers hoped.

In particular, the individual insurance marketplaces have not been the smashing success that Max Baucus and others who’d been working on this idea since the mid-aughts believed. On a practical level, most of the heavy lifting of coverage expansion has come from Medicaid expansion, which could probably have been achieved in a less politically contentious way. That said, I hate it when people dump on the ACA exchanges too much because my family relies on them. It’s true that the unsubsidized plans that we are eligible for are on the expensive and stingy side compared to what I was accustomed to from years of job-based insurance coverage.

But at the end of the day, the relatively low price of job-based insurance is in large part an illusion — the tax code encourages employers to compensate their workforce with subsidized insurance rather than paying them more in cash.

And the individual marketplace does work. My family gets the financial insurance aspect of health insurance (knowledge that a medical catastrophe will not bankrupt us), the bulk purchase discount aspect of health insurance (the unit costs of health care services are lower if you buy them through an insurer), and the regulated goodies aspect of health insurance, like no cost-sharing for preventative care. That last piece is part of a broader and important reform of the overall system brought about by the ACA. In a country with a national care system, cost-effective medical interventions should be more heavily subsidized than less cost-effective interventions. That’s somewhat contrary to the “insurance” logic of American health care financing, where market dynamics push in the direction of covering rare, expensive interventions over common, cheap interventions. ACA regulations requiring that people be able to go, without cost-sharing, to get basic preventative care — vaccines, checkups, standard tests — brought us in the direction of a rational organization of the whole health care system.

And I think a lot of people have forgotten how chillingly evil the private insurance market used to be.

The point of insurance is that while most years, a consumer pays more to the insurer than they receive in benefits, when something really bad happens, they get more than they pay in. This means an insurance company has strong incentives to find a pretext to default on its obligation when someone in crisis makes a claim. In a normal year, the insurance company is happy to cash your checks. But when you suddenly need something from them, they’ll go over every piece of paperwork you ever filed for evidence of something they could use as a pretext to deny you coverage. Here’s a pre-ACA example:

In 2001, Jacqueline Ruess underwent laparoscopic surgery for a growth her gynecologist thought could be ovarian cancer. Four months later she faced a bill of more than $15,000 because of a lone mention in her file of "dysfunctional uterine bleeding," according to a 2008 article in "Self" magazine. The insurance company deemed this diagnosis - a technical term for irregular periods - evidence of a preexisting condition. Since the irregular periods (between 10 percent and 30 percent of women experience them at some point) weren't related to any underlying medical problem, Ruess told "Self," she never thought to mention them on her health insurance application.

An insurance company that’s allowed to pull scams and default on obligations will, obviously, be willing to sell you a cheaper plan than a company that needs to follow through on its obligations. And when Republicans talk about changing the ACA to make the plans cheaper, this is what they’re on about: making the insurance product to flimsier and less useful.

By contrast, Obama’s goal with the ACA was to “bend the cost curve” — i.e., slow the rate at which the actual cost of delivering health care services increased. He faced a lot of skepticism from Republicans and the Congressional Budget Office that the ACA would achieve this. But the cost curve did, in fact, bend, and I think there’s pretty good evidence that the ACA is part of the explanation. Of course there are doubters on this, but it’s worth recalling the structural situation. It’s not that the skeptics said “cost growth is going to slow anyway,” they denied it would slow. Then it did slow, which they claim is a coincidence. I’m skeptical.

Media incentives are bad

As I’ve said before, health care is almost certainly Democrats’ best issue.

If you look at other countries, a lot of the political arguments we have in the United States about climate change, “wokeness,” immigration, crime, and whatever else are also live issues, including in Canada and Australia and Germany. But even though foreign political parties do have disagreements about health care policy, no foreign party is even remotely as far to the right on this issue as the GOP is. A standard attack line for foreign progressives is to accuse conservative politicians of secretly admiring American-style health care.

It always seems to me that if social conservatives were smarter and/or could get their shit together, they would see that the road to achieving their goals is to force the GOP to moderate on the health care issue. But fundamentally, it’s a political party in hock to plutocracy, so while there is some pressure to moderate on abortion, nobody in Republican Party politics is talking about moderating on the nexus of issues around taxes, the budget, and health care.

Which is exactly why this is Democrats’ best issue. You can be pretty skeptical of a lot of progressive activist stuff and still see that deficit reduction should have a tax component and that ideas like a stronger public option can help bring down health care prices.

Unfortunately, the media tends to treat these kinds of questions that involve the dispositions of hundreds of billions of dollars and the health care of millions of people as relatively minor and unimportant. Cooper’s years-long struggle to obtain Medicaid coverage for the people of North Carolina has garnered dramatically less coverage than fights about which books belong in which school libraries. Some of that is a sense that culture wars are clickier than health care, but I think we saw in 2017 that it’s really not that hard to get the audience interested in health policy. It’s literally life or death stuff — it’s visceral, it impacts everyone personally, and it relates to topics like abortion. I think it’s relevant, unfortunately, that the media has an objective financial incentive for Trump to win the election.

A headline like Robert Kagan’s recent Washington Post op-ed “A Trump dictatorship is increasingly inevitable. We should stop pretending” is very grabby to resistance types but also incredibly unpersuasive to people feeling conflicted. Something like “it would be sad for millions of people to lose their health insurance,” by contrast, is something that lot of people who hold some center-right positions agree with. And it’s also something that a lot of progressive-minded people who have some doubts about Joe Biden agree with.

It’s silly to say the health care issue is more important than the future of democracy, but it’s a lot more clear-cut, factually, that “we should repeal the ACA” is a Republican Party policy goal and not a Democratic Party policy goal. But you really have to work hard to drag the media, against its inclinations and financial interests, to state clearly that this is at stake in the election. My advice, obviously, is to share Slow Boring posts and subscribe to Slow Boring to improve incentives. But also, gently and politely suggesting to media figures that this is an interesting topic and sharing information on your feeds about health policy makes a difference. And I think candidates who talk about the democracy issue, which they clearly should do, ought to make sure to connect it back to policy. Why do so many Republicans want to collaborate with Trump? Not just for fun. Because they have policy ideas that they know cannot withstand public scrutiny.