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Avik Roy on CBS’ ‘Face The Nation’: GOP Obamacare Replacement Hamstrung by Senate Rules

Reconciliation allows Republicans to proceed on a party-line vote, but prevents them from tackling the Affordable Care Act’s skyrocketing premiums.
March 12, 2017
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On March 12, 2017, Avik Roy, President of the Foundation for Research on Equal Opportunity, appeared on CBS’ Face the Nation to discuss the latest developments with House Republicans’ Obamacare replacement, the American Health Care Act. An edited transcript of his appearance is below.

DICKERSON: Avik, what do you make of the legislation put forward by Paul Ryan? Is it the best he could get?

AVIK ROY, FOUNDATION FOR RESEARCH ON EQUAL OPPORTUNITY: Well, I think he’s tried to split the difference between the people who — the more pragmatic Republicans who want to make sure that their replacement is competitive with the ACA on covering the uninsured.

DICKERSON: Right.

ROY: And the people like Rand Paul who say that anything that attempts to provide financial assistance to the uninsured is Obamacare-lite. And I thought your interview with him today was really interesting because Rand Paul, in 2012, introduced a bill to provide private coverage to seniors as an alternative to Medicare that would be heavily subsidized with richer benefits than Medicare, it would protect people against pre-existing conditions, require insurers to charge the same prices to the healthy and the sick and cap out-of- pocket costs and lifetime limits, all the things that are theoretically unique to Obamacare. So he’s for Obamacare-lite when it comes to seniors, not when it comes to the uninsured.

And I think this is operationally the challenge Republicans have. They say that they are for limited government and against subsidies to provide health insurance. The federal government’s involvement. But what they’re operationally against is assistance for the uninsured and the low-income populations. For Republican voters, the older, the employed, they’re totally in favor of and comfortable with subsidizing coverage…

ROY: One big constraint that Republicans have is, because they’re insisting on doing this in a party line approach, using the Senate reconciliation process —

DICKERSON: Where you only need a majority and not the 60 votes?

ROY: Where you only — right, exactly. The problem there is, you can address tax against spending to the reconciliation process, but you can’t really do anything about regulation. And so much of the Affordable Care Act is regulations. All the complaints that Paul Ryan made in your interview about rising premiums, those are driven by regulations. And if you can’t reform those regulations through this bill, you’re not actually solving the problems you think that Obamacare has.

DICKERSON: And that’s why he says it’s a multistage approach, but the fact is everybody’s focused on this first stage not the second and third…

DICKERSON: Avik, I want to ask you a question about something Bernie Sanders said about the tax cuts that are — or the windfall he says is going to the top one percent. Remind people why we’re talking about tax cuts and why this is a part of healthcare.

ROY: Well, it had to fund the ACA’s coverage expansion. So roughly speaking, on a back of the envelope basis, over a 10 year period, the ACA spends $2 trillion trying to cover the uninsured and it funds that through about 1.2 trillion in tax increases and about $850 billion in Medicare cuts. And what the House Republican bill does, it actually preserves the Medicare cuts in the ACA because you can’t touch Medicare through reconciliation. But they repeal nearly all of the tax hikes, and then have their own coverage expansion in this new structure that you talked about with Paul Ryan.

DICKERSON: Ezra, is one of the challenges here that there has been a bit of a success for our — for the Affordable Care Act, Obamacare, which is that it’s created expectations that you’re going to cover pre-existing conditions, you’ll have minimum coverage requirements and then also that — that kids till the age of 26 stay on their parent’s plan. If you keep all of those, which this does, that makes it expensive.

KLEIN: You are — it — it makes it expensive, but it also means you’re working within the — the broad framework of — of Obamacare, which they are still doing. And if you’re doing that, then you actually have to retain important parts of that framework. You can’t — they are splitting the difference between so many different arguments that they have stopped being able to make sense of any of them in particular. So you’re — they’re trying to take out the individual mandate, replace it with something that’s not quite an individual mandate, this 30 percent surcharge on health care when you come back into the market. And all of a sudden it may not work quite as well, but it also makes people angry and it’s not really clear what goal you’re trying to achieve.

I think — at this point about reconciliation, which Avik has brought up, is a really important one. I was stunned, actually, to hear Paul Ryan on the program earlier today say that the ACA was jammed down the country’s throat, but this — this is a regular order slow process. We did not see this bill until last Monday. This is the first time anybody has seen it. And I saw the stuff Ryan produced before. It was all different. This is the first time we’ve seen this piece of legislation with this constellation of ideas.

There are no serious independent analysis of it out yet. It has already passed two committees before those committees knew how it worked or what it would likely do. And without being able to go through regular order process, where there’s actually information, that there are amendments, you go back and forth, you decide if what you’re going to do is actually going to work, there’s not been time for Republicans, or really for anybody, to ask those very fundamental questions and decide, do they need to change this bill in pretty fundamental ways? The speed with which they’re trying to do there is, I think, a speed born of fear, but the speed that is going to make bad policies.

DICKERSON: And that’s why when I asked him about, you know, you can say you ran on this, but you didn’t run on the particulars that were being debated right now…

ROY: You know what’s going to be interesting is, when that Congressional Budget Office score comes out for this bill, and it says something like, the bill will cover 20 million fewer people than the Affordable Care Act, does Donald Trump, does the president, who’s promised insurance for everybody, say the CBO is fake news? Does he say, Republicans, go back to work and fix this? Because there are certain things about the CBO — the CBO really, really believes in the individual mandate, much more so than actually the insurers do. So there may be parts of the CBO report that are uncharitable in perhaps a way that you could dispute, but there are aspects of the bill that are going to result in fewer people having health insurance. And it’s going to be interesting to see how the president himself reacts to that.

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