It was a shocking day for many Republicans who had counted on Donald Trump and Republican majority in both Houses of Congress to repeal Obamacare and replace it with their “American Health Care Act“, the GOP’s version of healthcare reform. Obamacare itself has led to exploding insurance premiums, deductibles that would bankrupt many families, and the expansion of the entitlement class, but Republicans on Friday failed to pass their alternative.
Even with a strong majority in the House, Speaker Paul Ryan wasn’t able to convince enough Republicans that “Trump-care” was worth voting for. Members of the “Freedom Caucus” boldly went against GOP leadership and promised not to support the bill. As the hours grew closer to an actual vote, Ryan met with President Trump and after a brief discussion, the two decided to pull the bill. The vote never happened.
Democrats had never promised to repeal Obamacare, so no one was surprised that all Democrats promised to vote against the GOP proposal. But why did enough Republicans reject the AHCA so that its passing would be impossible? Did the Freedom Caucus just cost the Republicans their one chance to fulfill the promise they made to voters four election cycles in a row? The answer: Yes. But don’t be fooled. The Republican establishment is happy about this.
Republicans have just dodged a bullet. The true drivers in the rising costs of healthcare are massive government interventions in the market. In Obamacare in particular, one of those drivers is the individual mandate combined with the pre-existing conditions rule. Not only must everyone buy insurance, but every insurance company must accept anyone. Insuring loads of sick people leads to rising costs for everyone else, who are forced to buy insurance, but aren’t sick themselves.
While the individual mandate wasn’t a popular aspect of Obamacare, it actually helped deal with the rising costs to a degree. If sick people cannot be turned away by insurance companies, young healthy people needed to be forced to pay for insurance that they wouldn’t use. However, even though people were forced to buy insurance, it wasn’t enough to offset the costs of providing “free” insurance to millions of poor Americans. The costs continued to rise.
The Republican plan would have done away with the individual mandate, but would have kept the rule that people cannot be rejected by an insurance company due to a pre-existing condition. This meant that a person could live without insurance, get sick, and then buy insurance after the fact. This is the equivalent to buying home owners’ insurance after your house catches on fire. If the same logic of Obamacare (or Trump-care) was applied to auto or home insurance, the premiums would rise in the same manner.
The GOP’s alternative was a big-government way to repeal the unpopular parts of Obamacare and keep the popular ones. Unfortunately, it is the popular parts of Obamacare that are driving up costs and making insurance unaffordable for millions of Americans. Moderate Republican lawmakers were stuck between a rock and a hard place. They can fix the problem – repeal even the popular parts of Obamacare; or they can get reelected. Conservative Republicans, like those in the Freedom Caucus, rejected the AHCA knowing that it would actually make health insurance more expensive.
Republicans and Democrats alike know that true entitlement reform is politically impossible. The popular yet detrimental aspects of Obamacare will not be repealed, and a new GOP plan would have been another failure. By not passing a new plan, but “attempting to”, Republicans are able to say, “Hey, we tried”, yet relieve themselves of any responsibility of Obamacare moving forward. Obamacare is intact, it is still the law of the land, and it still only has Democrat fingerprints on it. Republicans have passed the buck, the ball is back in the Democrats’ court, and all the GOP has to do now is wait for Obamacare to collapse.
For Republicans, this is actually a win. They’ve successfully kicked the can down the road. For Americans, this isn’t really a loss, but just the status quo. Just as politicians from both parties have failed to make necessary changes to Social Security, Medicare, and Medicaid, they have failed with Obamacare. The fact that the strategy of politicians in Washington is to “just wait for it to implode” should come as an eye opener, because this isn’t just the way they see Obamacare, but ALL entitlements. No one in Washington has the political courage to make unpopular, although needed, changes to entitlements. Their strategy is to wait until Social Security collapses, until Medicare collapses, and then hope for the best… Just like Greece.