US President Donald Trump with Secretary of Health and Human Resources Tom Price (left) and Vice President Mike Pence (right) Olivier Douliery/DPA/PA Images

Obamacare: Republican rage runs into a dead end

They'll never lay this demon to rest
April 10, 2017

Last November, progressives around the world collectively gasped when Donald Trump defeated Hillary Clinton. In Alexandria, Virginia, right outside Washington, my wife and I glared at the election returns, as if somehow our negative energy could flip the numbers. As she began to sob, my first thought was: “There goes Obamacare.”

But, at least so far, I was wrong. Team Trump has been unable to do more than generate chaos. America’s conservative bloc is beset with contradictions on healthcare—and pretty much every policy other than tax cuts. Under this administration, fecklessness is emerging as a feature, rather than a bug. That doesn’t mean they can’t or won’t break many important things, but they haven’t managed to repeal Obama’s Affordable Care Act, and probably won’t anytime soon.

Like every recent presidential candidate, Barack Obama ran for office in 2008 pledging to reform our healthcare system. We spend 18 per cent of our GDP on it, nearly twice as much per head as other advanced economies, but without universal coverage and without better health outcomes. I used to work for the president and I recall a conversation we had early in his first term. It was clear what a heavy lift health reform would be—which was why none of his predecessors had succeeded. But Obama explained that he was motivated by what I’ll call “fiscal space”—if 6-8 per cent of the country’s GDP is wasted on inefficient healthcare, responsible stewardship means squeezing those inefficiencies out of the system. He understood this wasn’t going to be easy: my inefficiency is your profit, and health industry lobbyists will spend large amounts fighting tooth and nail to maintain such “rents.” But to Obama’s credit, he made the play for it.

Remarkably, he succeeded. The Affordable Care Act became law in 2010. Even strong advocates like myself recognised it was far from perfect. But we thought it had a decent chance of accomplishing its two main goals: significantly reducing the numbers of those without health coverage and slowing the growth in costs. And we were right. The share of Americans without health insurance fell from around 15 per cent to about 9 per cent. And, while this part is harder to prove, it appears that the reforms to our inefficient delivery system are “bending the cost curve,” as Obama intended.

But the law outraged Republicans. They never accepted or understood the fiscal space argument, but much more than that, they smelled another government entitlement, an encroachment on the market, something which, if not strangled at birth, people might get used to. In this, they were correct. The ACA became a stand-in for everything American conservatives were and are against. Repealing the law became a jihad for the right. While Obama was in office, this was bound to get vetoed, but House Republicans nonetheless voted for it 60 times.

Then, unexpectedly, Donald Trump, who campaigned on not just repealing the law but replacing it with something much better, won the presidency and Republicans had majorities in both Congressional chambers. Ergo, my reaction on election night. I had thought I lived in a world where we would build on Obamacare, where it would be as much a part of the political landscape as Medicare, our beloved guaranteed, single-payer health coverage for seniors. But that wasn’t the world I woke up in on 9th November. Republicans immediately began planning to “repeal and replace” the ACA. And that’s when they hit a wall I should have seen coming, but didn’t. Anti-government ideology collided with reality. Campaigning crashed into governing.

"Early on, Obama explained to me that he was motivated by the large chunk of US GDP that is wasted on inefficient healthcare"
In its few short years, the ACA had provided health coverage to over 20 million people. It has enabled young adults to stay on their parents’ plan up to 26. It blocked insurance companies from price discrimination based on pre-existing medical conditions, age and gender. It provided coverage subsidies that reached well into our middle class.

There were shortcomings: premiums spiked in 2016 in parts of the market; and even with subsidies, care is still too expensive for many families and millions remained uncovered. So when Trump promised to replace Obamacare with plans that were “going to be much less expensive and much better” people took him roughly at his word. As the health policy expert Drew Altman found in focus groups of Trump voters, they expected plans with lower premiums, smaller deductibles and deeper coverage.

Two things are now clear. First, Trump says whatever he thinks his audience wants to hear without regard for substance or plausibility; and two, what his base voters heard him offer on healthcare was the direct opposite of what the Republicans planned.

Consider, for example, their attempted replacement, the American Health Care Act, which failed even to pass the House. Non-partisan analysts found that the bill would lead 24 million people to lose insurance. It raised the premium cost to a low-income elderly person by almost $13,000, about half of their income. It cut healthcare for the poor by $900bn and diverted $600bn of those savings to cutting taxes for the rich. And amazingly, it didn’t fail because it was too harsh: a sizable faction of Republicans voted it down because it wasn’t harsh enough!

Their constituents want more, cheaper healthcare, not less, so aren’t these Republicans putting themselves at risk with their voters? I think so, but they’ve painted themselves into a corner. Having convinced their constituents that Obamacare is terrible, they have no idea how to replace its real benefits. Progressives must remain vigilant, because there are many ways the Trump administration can undermine the functioning of Obamacare. But I’m not sure such sabotage will work for the Republicans. There’s at least a chance that Obamacare is here to stay.

It may be wishful thinking, but people of all political stripes are resistant to losing what they have. If anything, as Altman’s focus group stressed, they want more of it, which is precisely what Trump told them they could have. Tellingly, shortly after the Republican plan crashed and burned, several conservative states began considering expanding a key part of Obamacare into their states—judging if you can’t beat ’em, join ’em. For now—and I predict for a long time to come—the ACA remains the law of land, much to the benefit of millions of Americans.