When Ted Cruz first aired his proposal to let insurance companies that sell one Obamacare-compliant health-care plan to sell cheapie bare-bones plans as well, he got a lot of praise for perhaps finding a way out of the ideological gridlock that was keeping Senate Republicans short of the votes they needed to pass their version of Trumpcare. The idea was that this approach would give conservatives the avenue for lower individual insurance premiums they were demanding without a frontal attack on protections for people with preexisting conditions.
As my colleague Eric Levitz noted at the time, however, the Cruz proposal represented a sneaky collateral attack on the risk pools that make insurance affordable for sick folks:
Under Cruz’s model, many healthy consumers would avoid shelling out for high-cost, comprehensive plans. This would then make the pool of people willing to pay for such coverage disproportionately sick, which would cause the price of such plans to rise, which would make the pool even sicker, which cause prices to premiums to rise further, which would make the pool sicker still, on and on, in a death spiral, until the sick were priced out of the market completely.
This realization is now spreading among Senate Republicans, along with opposition to the Cruz amendment, as the Hill reports:
“I would say that if we voted on the Cruz proposal, it would be in the neighborhood of 37 to 15 against, 37 no votes and 15 yeses, and that’s probably generous,” said a GOP aide familiar with the Senate negotiations. “Nobody wants to go home and say to a 45-year-old steelworker with diabetes that you should have to pay a lot more for your health insurance.”
Frustrations are mounting with Cruz among Senate negotiators because leaders have felt blindsided by his demand that the legislation essentially eliminate the protection for people with pre-existing conditions.
But it may be too late now to put the genie back in the bottle: Conservative groups like FreedomWorks and the Club for Growth are promoting the Cruz amendment avidly. And perhaps more significantly, House Freedom Caucus chairman Mark Meadows, who has generally been quiet about Senate developments, is suddenly acting as though adoption of Cruz’s idea may be a condition for his own support.
Since the whole rickety structure of the long-delayed GOP legislative agenda depends on very quick House passage of whatever the Senate decides to do on health care, the possibility that House conservatives will demand adoption of the Cruz proposal is profoundly destabilizing.
As a practical matter, this debate could be in the hands of the Congressional Budget Office, which Mitch McConnell has asked to provide a “score” for amended versions of the Senate bill with and without Cruz’s proposal. It’s unclear which set of assumptions about the Texan’s handiwork the green eyeshades will adopt:
Republican aides who say Cruz’s amendment is politically untenable acknowledge that the CBO could report some good news, like that the proposal would send down premiums without significantly affecting coverage.
But they think it’s more likely that the CBO analysis will be damning.
“Or CBO will come back and say the market will be destroyed and 45 million people will be left without insurance,” said one staffer.
However it all turns out, the Cruz proposal has cast a spotlight on one of the underlying problems the GOP has faced throughout its crusade to repeal Obamacare. Giving people with preexisting health conditions access to affordable health insurance has always been one of the most popular features of the Affordable Care Act. To the extent that accomplishing this goal requires broader risk pools that shift some costs to younger and healthier people (with the poorer among them receiving compensatory federal subsidies), it’s “socialist” in the eyes of many conservatives. And so they keep coming up with ways around it, from state “opt outs” of provisions banning price discrimination against sick people (the “solution” in the House-passed American Health Care Act) to the kind of indirect approach Cruz is promoting.
Conservatives are being honest about one thing: A full repeal of Obamacare would send the health-care system back to the pre-ACA status quo ante. In those days people with preexisting conditions were mostly out of luck (aside from whatever succor they are offered via the health-insurance ghettos states create under the rubric of “high-risk pools”), while healthy people had a wide range of affordable options — including the option of going without insurance. To the extent conservatives prefer that situation to the “tyranny” and “big government” of Obamacare, they will just have to accept the political damage associated with the dramatic unpopularity of their ideas.
