The Republican Health Care Debacle

In early May, the U.S. House of Representatives passed the American Health Care Act of 2017 (AHCA), which would undo significant parts of the Obama administration’s Affordable Care Act (ACA) and alter crucial aspects of Medicaid as it existed prior to the ACA. The proposed changes in federal policy—rolling back recent changes in insurance market regulations, sharply reducing federal subsidies for health care for lower- and middle-income Americans, and providing a large tax cut for upper-income Americans—would be dramatic. Even more striking is that these changes emerged from a legislative process that blatantly violated the norms of professional policymaking. Indeed, the development and passage of the AHCA is a case study in how not to make public policy.

The traditional process for developing and passing major legislation is straightforward although admittedly cumbersome: members of Congress and their staffs advance ideas for changing public policy; they describe the perceived advantages and disadvantages of those ideas; they receive feedback on the ideas from experts, interested parties, and the general public; they revise their ideas in response to that feedback; and, after many iterations, they vote on specific legislative language.

Following this process matters; it is critically important for effective governance in at least two ways. 

First, in a complex society, determining what changes in policies would be most effective cause the least collateral damage to other objectives is often a challenge, and the feedback provided by Congress’s own experts, outside analysts, and individuals and groups who would be directly affected by proposals is extremely valuable in making proposals better. This is not to say that analysts or interest groups should have veto power over legislation: analysts can be wrong in their assessments and interest groups are focused on specific constituencies, which is why we elect representatives to make policy decisions. But ignoring their perspectives can easily lead to policies that are ineffective and harmful. 

Second, members of Congress need to understand, in some detail, what they are voting for and against so they can make informed decisions. And the public needs to understand, at least in broad terms, how policies are being changed, so they can have confidence that their government is serving them well and so policies are not immediately overturned when their effects become clear. The deliberate and open nature of the traditional process raises the probability of both. To be sure, not all aspects of policymaking should be open: negotiations behind closed doors can be crucial for reaching compromises that facilitate the passage of legislation. But shortchanging congressional and public debate about proposed policies sows the seeds of discontent and regret.

The development and passage of the AHCA is a case study in how not to make public policy.

For the AHCA, the Republican leadership in the House did not follow the traditional legislative process. The underlying problem is that Republican leaders have spent much of the past seven years objecting to the ACA while doing very little to develop an alternative approach or to build support for it. Republicans’ core proposition was that there exists an alternative to the ACA that would reduce government subsidies and relax insurance-market rules while maintaining the high level of insurance coverage achieved in the past few years and lowering people’s personal spending for health care. But this proposition is false: analyses over many years of proposals to change federal health policy have shown that no alternative to the ACA that was more conservative could maintain the high level of insurance coverage and other popular aspects of the ACA. But the contrast between assertion and reality was not apparent to many Americans, and perhaps not even to many members of the House.

Republicans could have addressed the problem in a constructive manner if they had followed the traditional process for developing major legislation. Public hearings could have illuminated the tensions between different goals for health policy and allowed representatives of health care providers, health insurers, and patients to discuss their perspectives; the formulation of proposals by multiple committees with jurisdiction over health policy could have offered different ways to move policy in more conservative directions; analyses of competing proposals by experts could have provided a basis for congressional and public debate; and legislators could have thoughtfully modified their proposals as they learned about the consequences of policy changes being considered.

Instead, the Republican leadership decided to “repeal and replace” the ACA in just a few months even though no specific proposals for “replace” had received significant attention in Congress. In the resulting rush, the traditional steps for developing major legislation were abandoned: there were few hearings and quite limited congressional and public debate. There were nearly universal objections from groups representing health care providers, health insurers, and patients (as well as from policy analysts with a wide range of political views) that were not addressed. The House voted before an estimate of the bill’s effects from the Congressional Budget Office (CBO) and the staff of the Joint Committee on Taxation (JCT) was released. (The House Republican leadership asserted that an estimate was not needed because the bill had changed little from an earlier version for which an estimate was available. This assertion was absurd, given that the changes in the bill were self-evidently consequential and sufficient to change the votes of dozens of House members.) Surveys suggest that the public is overwhelmingly opposed to the bill, and legislators made little effort to address the reasons for that opposition. In all these ways, the legislative process used for the AHCA differed markedly from that used for the ACA in 2009 and 2010. 

Moreover, the contrast between assertion and reality is breathtaking. U.S. President Donald Trump promised that his health reform plan would “protect everybody” and Secretary of Health and Human Services Tom Price said that “what we’re trying to do is to make certain that every single person has health coverage”; in fact, based on an earlier estimate from CBO and JCT, the AHCA would roughly double the number of Americans without health insurance. Treasury Secretary Steven Mnuchin enunciated a “Mnuchin rule” that the administration would not enact a tax cut for higher-income people; in fact, based on earlier estimates from the CBO, JCT, and the Urban-Brookings Tax Policy Center, the AHCA would cut taxes on people with annual incomes over $1 million (in 2022) by hundreds of billions of dollars over the coming decade. House Speaker Paul Ryan asserted that the health bill would protect people with pre-existing conditions; in fact, the AHCA would substantially weaken existing protections. House Majority Leader Kevin McCarthy claimed that no one would lose Medicaid coverage; in fact, based on an earlier estimate from the CBO and JCT, the AHCA would cut the number of people on Medicaid by 14 million by the mid-2020s. 

Surveys suggest that the public is overwhelmingly opposed to the AHCA, and legislators made little effort to address the reasons for that opposition.

Passing major legislation that was thrown together with such limited information, about which so many false statements have been made, and in the face of so much opposition was a terrible mistake. That mistake will come back to haunt House Republicans. It is possible to gloss over problems of this magnitude long enough to allow for a vote and a celebratory press conference, which indeed occurred. But this sort of short-term win generates long-term trouble because the day of reckoning for the AHCA’s problems has been deferred, not eliminated. 

When the CBO and JCT’s estimate is completed, the various unintended consequences of the bill—on the federal budget, on state governments, on the number of people without health insurance, on the personal cost of health care for those buying insurance in the individual market, and more—will probably become clear. Key constituencies will speak up again, with greater force. And if the Senate follows the House’s approach, still larger problems will arise when the law is implemented and people see its true effects. In contrast, if the Senate ignores the House’s approach and pursues a different path, the House will be shown to have supported a major change in federal policy that could not withstand the light of day. Neither outcome is good for House Republicans.

The traditional process for developing and passing major legislation exists because it increases the chance that policy changes will be appropriate and sustainable. The failure of House Republican leaders to follow that professional process for developing the AHCA is damaging to the country. Because those leaders did not take the time to hear, understand, and address relevant concerns, they have set in motion changes in policy that will not achieve their stated goals and will lead to greater discontent and resistance over time. Good process does not guarantee good policy or political success, but bad process almost inevitably leads to both policy failure and political failure.