26 United States The EconomistJuly 22nd 2017
2 party battle, between fiscal conservatives
opposed to unfunded taxcuts and more
profligate sorts, has also got harder. Mr
McConnell’s authority, which is largely
based on his reputation for skilful deal-
making, has been damaged.
Whatever he decides, support from Mr
Trump, whose standing with his Republi-
can colleagues is even more diminished,
will be fickle. Having promised two years
ago to replace Obamacare with “some-
thing terrific”, Mr Trump appears to have
made little progress in working out the de-
tails. Depending on who he was speaking
to, the presidenthas oscillated between
praising his party’s health-care plans and
deriding them as “mean”. After being sub-
ject to the president’s periodic attempts to
rally support for the various repeal bills,
some perplexed lawmakers suggested Mr
Trump did not seem to understand them.
Nor, it appears, has Mr Trump mastered
some basic details of how Congress works.
In a recent tweet, he called on Mr McCon-
nell to scrap the legislative filibuster in or-
der to pass health-care and tax reform. Yet
as the Republican leader was pursuing
both through budget rules, which require
only a simple majority, the filibuster was
no obstacle to him.
Having fulminated against Obamacare
for so long, Republicans in Congress
should not have needed the president to
tell them what to replace it with. At the
same time, partisanship has made it so
hard to pass bold legislation of any kind,
even with an astute, well-briefed president
providing impetus, it may be almost im-
possible without this. Reassuringly for Mr
McConnell and his counterpart in the
House, Paul Ryan, Mr Trump is said to be
taking a greater interest in their tax plans.
Yet it is not clear he is capable of the kind of
sustained effort and skilful deal-making
passingthem would require. The likeliest
outcome remains a temporary personal in-
come-tax cut and a reduction in corporate
rates (though probably not to the 15% level
the White House wants).
Naturally, Mr Trump, who recently
claimed to have “passed more legislation”
than any of his predecessors, though he
has in fact signed not a single bill of note,
does not acknowledge his failure. “I think
we’re probably in that position where
we’ll let Obamacare fail,” he said. “We’re
not going to own it. I’m not going to own it.
I can tell youthe Republicans are not going
to own it.” In fact they do own it and, given
the alternative plans Mr McConnell had in
mind, that is probably a good thing for his
party. With an approval rating of over 50%,
Obamacare is considerably more popular
than the Republicans. As they contemplate
this latest trauma—the rejection by voters
and collapse of a health-care reform that
was for years their most fervent ambition—
Republicans, omnipotent but unloved,
need to reflect on why that is. 7R
EPUBLICANS presented their efforts to
overhaul the Affordable Care Act,
which flopped this week, as a necessary re-
sponse to a failing law. They frequently say
the individual market, in which those who
do not get health insurance through their
employers can buy it for themselves, is col-
lapsing. Premiums rose by an average of
22% in 2017. So many insurers have given
up on the market that about a third of
counties have only one left; 38 are at risk of
having no insurer for 2018, according to the
Kaiser Family Foundation, a think-tank. Yet
the Republican bill is not a technocratic fix
for these problems. Rather, it is an attempt
to enforce conservative thinking on health
care. And it is failing partly because of ideo-
logical faultlines in the party.
To see this, start with the fact that the
bill makes the individual market weaker,
not stronger. It abolishes the individual
mandate—the requirement that everyone
who can afford insurance must buy it—and
makes subsidies for low- and middle-in-
come buyers less generous. The Congres-
sional Budget Office (CBO) forecast that the
first version ofthe Senate’s bill would have
reduced enrolment in the individual mar-
ket in 2018 by over a third—a more dramatic
collapse than anything seen to date.
Next, consider the changes to the bill
made by Senator Ted Cruz of Texas. His
“Consumer Freedom Option” would al-
low insurers to sell almost completely de-regulated plans, so long as they continue to
offer some that followed Obamacare’s
rules. This is an attack on the redistribution
inherent in the law. By forcing all plans to
cover certain things—such as treatment for
mental health—Obamacare ensures that
those who fall victim to such conditions, or
who already have them, pay the same for
insurance as everybody else. Their medi-
cal costs are spread around.
Mr Cruz sees this as an unwarranted in-
cursion into consumers’ freedom of
choice. His amendment would lead many
healthy people to buy cheap plans cover-
ing little. If they then contracted a condi-
tion which their plan did notcover, they
would have to wait six months before re-
turning to the Obamacare exchange. Be-
cause the exchange would contain mostly
sickly people, premiums would rocket. The
plan is akin to allowing consumers to buy
cheaper cars without seat belts, with the
added side-effect of pushingthe price of
cars that keep them much higher.
Some redistribution would live on.
Poor buyers would still have their premi-
ums capped. And the bill stumps up
$182bn over a decade which states could
use to subsidise the exchanges. But this
vexes purists. Rand Paul, one of the four
senators who is standing in the way of the
bill’s progress, describes it as a “giant insur-
ance bail-out superfund”.
The problem is that conservatives are
divided over whether the government has
any business at all in health-care markets.
All agree that Obamacare’s high premiums
are a problem. They fall on a small number
of buyers who earn too much to qualify for
theirsubsidies. Many of them are self-em-
ployed and therefore part of a key Republi-
can constituency. The 155m Americans
who get insurance from their employers
do not have to bearthe same costs. But the
question is: who should? The right of the
party’s answer is that the sick people must
pay for themselves. Mr Paul says health
care is a “market item” that should not be
subsidised. But most Republican plans,
like the Senate bill, steer some taxpayer
cash towards the 20% of Americans who
incur 82% of health costs.
Changes to redistribution in the indi-
vidual market are somewhat hidden. But
the bill’scuts to Medicaid, health insur-
ance for the poor, are in plain sight. The
CBO thinks they would leave 15m fewer
people enrolled in Medicaid than would
be under the current law by 2026. Republi-
cans find these cuts hard to defend, often
denying they exist. Susan Collins, another
Republican rebel in the Senate, thinks they
are too deep—the polar opposite of Mr
Paul’s objection. MostAmericans worry
about increased government spending but
nevertheless think the government should
ensure everyone has health insurance. Re-
publicans are divided and confused over
the extent to which they agree. 7Republican ideasRe-redistribute
WASHINGTON, DC
The ideology behind the Republicans’
health-care billOath keepers in the Senate