Republicans Scramble for Health Care Ideas as Obamacare Deadline Looms
A major theme of American politics over the past few decades is Democrats repeatedly bailing Republicans out from the political consequences of their own actions—particularly with health care. During the Obama years, House Republicans voted dozens of times to repeal Obamacare, which Democrats blocked every time. During Trump’s first term, the GOP came within one vote of actually repealing it.
Now, with the One Big Beautiful Bill Act (OBBBA), Republicans have finally gotten what they wanted—namely, taken a trillion-dollar bite out of Medicaid, and allowed Biden-era Obamacare subsidies to lapse, meaning premiums on the exchanges are going to more than double. Except, whoops, it turns out that people don’t like this at all, and even the more dim-witted congressional Republicans are starting to fear this might blow up in their faces. And the clock is ticking—by the end of this week, it will be too late to avoid the premium increases, as that’s when the new payment schedule goes into effect. (They could be rolled back later, of course.)
Senate Minority Leader Chuck Schumer, as usual, has offered Republicans a simple and logical way out: Just bring the subsidies back with a straightforward, three-year extension, extending through most of Donald Trump’s term. It might be necessary to spell this out: If not passing subsidies has a painful, unpopular effect, then passing them will have a good effect. Alas, there is no sign that Republicans will accept that deal.
As we’ve been covering here at the Prospect, Republicans have been flailing around for weeks for some option to prevent these premium hikes that doesn’t involve admitting all their health care ideas are awful and stupid. One that was floated by the Trump administration involved extending the subsidies temporarily, but also making the coverage worse and forcing poor people to pay more for their plans. It was like putting a few drops of strychnine into your bottle of cough medicine. But even that was too much for Republican hard-liners. They forced Trump—yes, forced Trump, not the other way around—to throw that plan in the trash.
Republican “intellectuals” have since come up with some other ideas. For instance, Trump’s pollster has been advising the party to pivot to drug prices. And it’s true, Americans are gouged mercilessly for prescription drugs. But the biggest thing that Trump has done about that is in the OBBBA, rolling back price negotiations on certain classes of Medicare drugs under Biden’s Inflation Reduction Act. The new system wasn’t even that strict, but Republicans have rarely met a corporate handout they could resist.
Trump’s Health and Human Services Department did just announce price cuts for 15 drugs after IRA negotiations, but of course this was teed up by the Biden-era law. (Insanely, the new, lower prices that Biden negotiated don’t kick in until next year, giving Trump the credit for them.) Trump has also made deals with individual drug companies to sell certain prescriptions on a consumer “TrumpRx” website, but these prices aren’t actually lower if you have insurance. It’s another in a long line of fake solutions on drug prices. (It also appears to fit the Trump trend of being wildly corrupt: a company that has Donald Trump Jr. on its board is getting nonpublic information to help its business, according to former ethics officials.)
Most recently, the Trump administration has cooked up a bizarre plan involving the United Kingdom and potentially the EU. It recently struck a deal with the U.K. in which their National Health Service agreed to pay 25 percent more for American-made drugs, in exchange for Trump dropping his threats to tariff British-made drugs. The idea, supposedly, is that if the U.K. pays more, then Americans can be charged less. (It will also kill about 4,500 British people per year, according to one recent analysis.)
As an economic matter, this notion that there is some mandatory level of pharmaceutical spending is nonsense; if there were, then these companies would not spend more on advertising than they do on research. But more importantly, Big Pharma is extremely happy about this deal, and industry lobbyists are crawling over the European Union loudly demanding similar capitulation to Trump. The reason is that there is every reason to think that pharma companies will pocket any increase on Europeans or Brits and continue mercilessly gouging Americans.
“One deal is not the other deal,” Peter Maybarduk, director of the Access to Medicines program at Public Citizen, told the Prospect. “There is no part of it that makes companies lower prices on Americans.” There will likely be a couple of token price cuts—probably an extension of TrumpRx—that Trump can loudly take credit for, but without ironclad rules, pharma is going to charge the profit-maximizing price in every possible location. Once again, this is just yet more government by and for corporate interests.
Speaker of the House Mike Johnson, meanwhile, is reportedly attempting to slap together a larger health care policy package at the last minute. Politico reports that it “is likely to be an assemblage of various GOP bills that have been working through House committees that are largely aimed at providing more options for health care coverage outside of the Affordable Care Act framework,” as well as “bipartisan legislation overhauling the role of pharmacy benefit managers and potentially other bills that could lower prescription drug prices.”
Now as my colleague Whitney Wimbish has written, PBMs are indeed anti-competitive middlemen that plague society. But aside from that possible positive element, these ideas are bad. The Obamacare regulatory framework exists for a reason: to make health insurance actually worthy of the name. Before that law, the individual market for insurance was riddled with essentially fraudulent coverage that didn’t cost much but disappeared the moment you needed it. That’s what Johnson is trying to bolster: junk insurance that’s just a funnel of money from the pocketbooks of Americans to fly-by-night companies.
And, of course, nothing in the reporting on Johnson’s package—assuming he can even write up what would be a thousand-page bill in less than a week—even mentions Obamacare premium increases. It’s cargo-cult health policy.
The fundamental reality is this: There is no way to improve health care in this country without increasing subsidies, tightening regulations, or expanding public programs, and Republicans oppose all three of those things. It’s looking increasingly likely that, despite Democrats’ best efforts, the American people are going to learn this fact the hard way.
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