President Donald Trump exploited anger at Obamacare to get elected -- that was smart. His mistake was to promise to replace it with something that would deliver the best of everything: high coverage, low costs.
Trump attacked Obamacare on the campaign trail, but not for any coherently conservative reasons. His goal, unlike that of orthodox conservatives, was never to shrink government for the sake of shrinking government, but rather to redirect its resources towards his people, his kind of Americans. Obamacare should be repealed, he said, but with the caveat that it had to be replaced by something that would be both cheap and cover the working class
. That's what he ran on, that's what he won on.
The reality is that high coverage and low costs are contradictory aims. The Congressional Budget Office suggests that attempting both will result in neither: its analysis of the Republicans' American Health Care Act (AHCA) says
that 24 million more people will be uninsured by 2026 and that some older citizens' premiums will jump. Turns out that you can have bread, you can have circuses, but you can't have both.
This drama has a long history. Back in 2009, when Obamacare was first put to Congress, the Republicans leapt on the Tea Party bandwagon. This was a natural alliance between anxious consumers and conservatives who feared that getting the government even more involved in health care would lead to higher prices. They were right to worry. Just days before the 2016 election, it was announced that Obamacare premiums were rising
by an average of 25%. In many counties of Arizona
, for example, there was only one provider on the Obamacare exchanges left, and costs were reported to have more than doubled.
Now Trump is facing the real problem, which is that his "something for everyone" philosophy does not translate well into government, particularly a government running out of cash. Trump has demanded from Congress a huge tax cut and a massive increase in defense spending
. Money will have to be saved, but how?
Step forward Paul Ryan with the AHCA, which at its heart is an attempt to make Obamacare more economical rather than abolish it altogether. It's a first step
, say its defenders, one that will still keep a lot of poor people covered, cut out rules that stifle competition, raise a few costs to improve the fiscal position and cut $337 billion over 10 years. A nice nip and tuck. Isn't that what Republicans want?
No. Not the moderate Republicans
who represent constituencies with small majorities, at least. How can they possibly support an act that either fails to insure their voters or causes their premiums to rise -- even if, as the Congressional Budget Office assessed, they might eventually fall again?
To keep the support of Trumpite, working-class voters, they urge moderation
. But moderation, in turn, will alienate the conservative Republicans -- in Congress and elsewhere -- who despise the AHCA
because they see it as an imitation of Obamacare.
The conservatives have a point. The AHCA is a reform that goes far enough to hurt people without going far enough to make things better.
The conservative Republican argument is that only when the government liberalizes the market and empowers consumers with lower taxes -- will the costs of health care fall. Greater coverage, they argue, is best achieved through health care becoming so cheap -- thanks to competition -- that anyone can afford it.
The tragedy of American health care is cost. Consumers are charged crazy amounts and have little power to do anything about it. The socialist solution, which is practiced in Britain, is for the government to take complete control of health care and regulate prices. The free market solution would be to get government out of health care altogether; let healthy competition drive down bills.
Obamacare is part of a long tradition of the US stumbling between socialism and the free market, delivering not the best of both worlds but, very often, the worst. Instead of bringing the costs of the health care market down, the US system now subsidizes consumers who would otherwise struggle to afford its products.
With the Republicans in control, now ought to be the best time to enact a total reform of health care -- but it looks like it won't happen. Partly because of worries about alienating the voters and because Republicans like Ryan aren't on board with a fully free market approach. But also because the logic of Trump-style populism has limited the conversation. Rather than challenge the philosophy behind Obamacare, Trump really only challenged its implementation. He was a candidate for a more generous version of the status quo, and his populist approach threw away an enormous opportunity to rethink the underlying principles of how American health care operates.
The most damning irony is that in trying to serve as many masters as it can, the AHCA is alienating almost everyone. Rather than each constituency group seeing something they want in it, they see only the things that are missing. And this is an important point that Trump will come to learn in time: even if bad policy is popular on the campaign trail, it is guaranteed eventually to become unpopular in government. Trump is correct, health care is "unbelievably complex
" -- too complex, I suspect, to be reformed by a populist.