Ted Cruz’s latest addition to the Senate health bill won’t save a bad piece of legislation.
IT IS FAIR to say the Senate’s health-care bill, the Better Care Reconciliation Act (B.C.R.A.), is undergoing some serious turbulence. Thanks in no small part to the ten or so senators who have come out against it, few are confident the bill will pass. If it were to fizzle, that would constitute a major defeat for the Republicans, many of whom campaigned for a “repeal and replace” solution to Obamacare with feverish intensity—one which their constituents will doubtless not forget.
With Congress reconvening this week, tension is mounting on Senate Majority Leader Mitch McConnell to come up with a solution that is broadly acceptable to Senate Republican’s two much-discussed flanks, centrists and conservatives. Recently, one hitherto unforeseen remedy has begun to receive attention: Texas Senator Ted Cruz’s proposed amendment to allow states who already offer Obamacare-compliant health plans to offer non-compliant ones as well.
Though no text of the Cruz amendment has yet been made public, it is clear what this tweak would do. Since the Cruz amendment would allow insurers to bypass Obamacare regulations prescribing coverage of certain medical services, states would begin to offer new, stripped-down health-care plans that are cheaper but cover less. The healthy would flock to these health plans to save money, while the sick would remain in the old, Obamacare-compliant plans.
Bifurcating the health-insurance market in this way would force the poor to pay more for coverage. In some regions, it might even lead to “death spirals,” where the insurance pool becomes too concentrated with the sick and insurance premiums inexorably soar. Though this ought to be obvious, it bears reiterating: the point of health-care legislation is to help people who are sick afford care, whether through subsidized health-insurance plans or otherwise.
It is thus unclear what the Cruz amendment is trying to accomplish in terms of policy. In its latest form, the B.C.R.A. would keep the Obamacare exchanges partially intact, but would reduce the quality of care nationally and push deductibles up to new heights. It would slash Medicaid to fund a tax cut on capital gains, an unworthy trade-off. From a policy angle, this amendment does little to bolster the B.C.R.A.’s shortcomings.
Politically speaking, the Cruz amendment doesn’t fare much better. It might help lure in some conservatives like Rand Paul, Mike Lee, or Mr. Cruz himself, but at the cost of further alienating centrist Republicans and those, like Nevada’s Dean Heller, facing tough midterm races in 2018.
It’s time for Mr. McConnell to abandon the B.C.R.A. Whether the Cruz amendment is adopted or not, the Senate health bill is wrong-headed. The only foreseeable way for the bill to pass is to amend it beyond current recognition, in which case it would effectively be a new piece of legislation.
Republicans must realize that the government has a role in regulating and subsidizing health-insurance markets to ensure that all Americans can attain that fundamental right laid out in the Declaration of Independence—that of life.
The best way to reform Obamacare is marginally. Senate Republicans have the opportunity to further incorporate what the right gets right—like health savings accounts—and fix what the left got wrong in 2010—like the overbearing employer mandate, which should be made more lenient for small businesses. They could shore up the Obamacare exchanges by permanently codifying cost-sharing subsidies for low-income Americans. A push for universal catastrophic care or a universal tax credit, funded by a modest Medicare cut, could even elicit Democratic support without exploding the federal fisc.
Mr. McConnell is an astute legislator. He will not hesitate to pull the health bill as soon as he determines it is doomed, which may, in all likeliness, come in the next few weeks. Let’s hope the impending failure of the B.C.R.A. will encourage Republicans to focus on producing better policy outcomes. Or else they might as well brace themselves for Democrats to unilaterally shove through single-payer come 2020.
