At this point the US political system has become so absurd and so much dominated by oligarchic politics that only fortune’s strike on a Republican senator, John McCain, led to the demise of the disastrous health care bill brought before the Senate. I am not celebrating McCain’s brain disease and personally wish him the best in his recovery efforts, but do find it ironic that he became the crucial vote to avert the Republican health care bill. Was his brain cancer making him have the sympathy for the more than 20 million Americans that were immediately going to have their insurance coverage terminated (and their lives endangered) upon passage of the Republican health care bill after realizing that he got great insurance coverage from the government to have his brain cancer treated? We cannot know for sure, because we lack the counterfactual of how McCain would have voted without illness.
We should first discuss what the Republican bill (American Health Care Act or AHCA) contains. From what we know of the bill that passed the House, it forms a repeal of the Affordable Care Act (ACA), which contains several important pillars. (1) Repeal of the individual mandate, which removes fines on individuals not obtaining health insurance, which could destabilize the existing insurance markets, where many loss-making insurers had already decided to withdraw leaving individuals purchasing their plans on the exchange not able to obtain any insurance. (2) Insurance companies are still prohibited from charging customers more for pre-existing conditions but only if insurance had not “lapsed” for more than 30 days in a year. (3) Eliminate income-based subsidies and replace them with the far less generous age based insurance subsidies ($2000 for young people and $4000 for older people, considering that medical bills are way higher than that). (4) Repeal all taxes associated with the ACA, including tax surcharges on high-income earners amounting to nearly 600 billion dollars in tax savings (i.e. redistribution of income back to the upper 1% of earners). (5) Introduce state waivers, i.e. allow states to repeal any provision of the ACA as they see fit. (6) Convert Medicaid into a block-grant program. Thus, instead of guaranteeing a certain percentage of a state’s Medicaid costs to be funded by the federal government, the federal government would instead pay a fixed amount proportionate to the number of residents to the state’s Medicaid program, which would result in substantial cost savings for the federal government. But this also means either substantial cost burdens for states or for Medicaid recipients, who are left holding the bag after allocated Medicaid funds run out.
While all these provisions in the AHCA sound very complex the intention is very simple: (1) cut more than 20 million people with current insurance from the rolls, (2) increase the cost burden on individuals and families to obtain their own insurance coverage and cover their medical expenses even if they can’t afford it, (3) massively slash taxes on the wealthy, whose lifestyle will not change an iota after adding these tax benefits to their cozy bank accounts.
It is no surprise that most American people are opposed to the AHCA, and so are most of the greedy insurance providers, but also doctors and health care providers. Who would thus favor such a draconian social policy reversal? We should not underestimate the role of the Koch brothers and other wealthy donors, who want to repeal every social legislation and transfer these public program funds into the coffers of the billionaire class that cannot care less about rising political instability resulting from their endless greed.
It has become common knowledge that this billionaire class controls virtually the entire political class (except some odd figures like the widely popular Bernie Sanders from Vermont), which includes Democrats and Republicans. But there are some notable partisan differences. The Democrats are an internally split party that want to please the big donors on Wall Street, Silicon Valley, Big Pharma and law firms at the same time as they want to win the support of the little guy but without exploding the public budget deficit. How does that become feasible? Via identity politics. Hillary Clinton’s campaign generated the lackluster support among some segments of the urban, middle class voter base by appealing to LGBT, minority and women’s rights. These are certainly worthy causes, but they don’t replace the bread-and-butter issues that Sanders was consistently stronger on than Clinton.
With the Republican agenda, it is hard to discern any sympathy for the little guy. There used to be a time when Republicans would make the effort to involve the little guy, and the Tea Party was such a faint attempt, closely mobilizing diffuse anger against political and economic elites mixed with racial hatred against the first black president. But these days, serious Republican presidential contenders and candidates for Senate and House races have become the employees (or paid shills) of the powerful Koch brother network of donors, as they have to pitch their crazy right-wing ideas in the Koch fundraising events.
Republicans tended to dominate the electoral map since 2010 mainly by evading political arousal and mass mobilization. They did that largely by actively suppressing the vote via voter ID requirements (that do nothing to stop fake voting, but do stop Democratic-leaning poorer and minority constituencies less likely to own government IDs from voting), redrawing the political districts in a way to maximize their number of seats, also known as gerrymandering, and keeping all political details of their agenda behind closed doors with as few hearings and public inquiries as possible. More recently, the Republicans are proposing to defund the Congressional Budget Office, which assesses the economic implications of government policies and pointed out the number of people that would lose health insurance as a result of repealing the ACA. If people don’t know how much they are harmed, how should they complain about it?
It is, therefore, not surprising that there will scarcely be anybody who would want to vote for the Republicans unless, of course, it was for the tradition of always voting Republican. But then Donald Trump came along and changed the game of US politics. Hitherto the establishment Queen Hillary thought that she had a safe passageway to the presidency. It wasn’t so much that Trump had any better ideas than the other Republican candidates. In fact, some of these plans were even worse and made no sense, such as building a wall across the US-Mexican border when the net migration of Mexicans had actually become negative or canceling trade agreements on which the US economy depended. It shall be no surprise that the crazy parts of his agenda had not been carried out, as his fellow plutocrats also opposed these measures.
Trump successfully appealed to the white working class that had been left in the gutter by politicians in both parties. They were sold on Trump because he spoke differently and more “honestly” than other politicians, who spin doctored their oratory on every campaign trail event, while Trump spoke off-the-cuff, incoherently and with repetitive, simple language to the entertainment of the masses, who were intent to vote against the establishment as opposed to the fluffy “hope” and “change” that Obama did not deliver 8 year prior. However, Trump is mostly show with very little political substance. That is also clear in the current health care debate where he angrily tweets against anybody opposing the health care bill even as he does not actually know what is in it. As long as there is a health care bill on his desk he will sign it, no matter how many people it will hurt.
And that makes Trump as nefarious if not more so than the other Republican politicians, who are intent to “deconstruct the administrative state” as per Steve Bannon, Trump’s White House adviser. This is a code word for plundering the state assets to benefit the rich and harm everyone else. With an outwardly respectable politician like Jeb Bush or John Kasich, the political discourse might have revolved more around the policy content, which could actually hinder the passage of the nefarious agenda as people wake up to the negative implications on their lives and resist it. But with the erratic and narcissist Trump the corporate media becomes obsessed with any nonsense that comes out of the president’s mouth, while the Republican donors and their employees called elected representatives in Congress are working overtime to carry out their right-wing agenda behind closed doors.
Methods of public resistance against the Trump administration largely remain ineffective, especially in the absence of another major economic crisis. The last major anti-establishment convulsion happened with the Occupy Wall Street movement, which was a direct response to the outgrowth of many years of neoliberal policy which combines the growth of low-wage and insecure work with rising private debt (home purchase, health care and student loans), growing wealth and income inequality and government transfer policies benefiting the very rich and the financial sector. But it was also made possible by the outrage against the Wall Street bailout and the major financial crisis. It is the apparent improvement in the labor market, which seems to quiet overall dissent, even as people are not much safer economically as the underlying economic challenges persist.
Now, what about the health care bill process? The House had passed the AHCA back in May with the aforementioned provisions. The Republican Senate leadership under Mitch McConnell wanted to copy and paste the House resolution to bring forward a vote. The Republicans have 52 senators to 48 for Democrats, but 2 Republicans, Lisa Murkowski and Susan Collins, oppose the AHCA because they did not want to face the electoral backlash for ripping health insurance from their constituents. All Democrats oppose the AHCA (subsequently called American Health Care Freedom Act), so the vote to get a vote scheduled passed narrowly with 51-50, with Vice President Mike Pence casting the tie-break. But from then on, Republican efforts to pass their bill went downhill. The house bill had been opposed by 7 more Republican senators, which was thus killed with 43-57.
The Republican leadership then brought forward a second “skinny” bill, which would only repeal the individual and employer mandate while defunding Planned Parenthood and allowing states to opt out of ACA provisions. Taxes and subsidies and other provisions in the insurance market would remain in place, but repealing the mandate will undermine the insurance market, because healthy people will opt out of insurance and not bear the burden of paying for the sicker population, the precise point of obtaining insurance. The skinny bill brought some of the Republican senators back to the support side, but Murkowski, Collins and all Democrats would still oppose the skinny bill. But McCain also did not switch sides. In his speech, he pushed for bipartisan cooperation to get a health care bill passed. On his left eye brow, you can see the surgery cut as he is still recovering from an unfolding brain cancer treatment. Whether he would have voted the other way if he were healthy, we cannot say for sure, but on that day the disastrous AHCA was killed 49-51, but the Republicans might still find a way to pass it later.
There is no doubt that the AHCA is disastrous, but so is the ACA. The ACA is merely an improvement to the previous health care system, where patients’ treatment could have their insurance claims denied because they have preexisting conditions. But the key weakness of the ACA is now becoming apparent, especially as the current administration attacks its pillars by signaling that they refuse to subsidize loss-making insurance providers, who take on a sicker population.
Free market fundamentalists argue that we have to introduce more market elements into the health insurance system in order to bring costs down, but these people fail to mention that such a free market produces perverse outcomes. A so-called free market would firstly create unequal access to health care, whereby poor and sick populations would regularly be priced out of the market. Secondly, the inevitable creation of multiple tier insurance pools would segregate healthy and younger populations from sicker and older populations, as the former cluster in low premium, high deductible plans and the latter in high premium, low deductible plans. The lack of healthy people in the latter pool would drive up costs, such that premiums would continue increasing, which pushes even more healthy people out of the sick insurance pool. This death spiral of the insurance pool will push up the uninsured rate, which is known as adverse selection.
The way how you solve this problem is by a single-payer health care system, which would combine the entire population in the same insurance pool, thus allowing the government to charge all people the same proportion of their income to fund the common health care system. Single-payer would also eliminate the inefficient and profit-hungry insurance system, and limit health provider and drug costs through central bargaining of medical prices.
People think that America is incapable of providing common insurance to all people, yet Medicaid and Medicare that has existed for more than 50 years now already provides the government infrastructure upon which any single-payer system would be based. The problem is of a political nature, as most people would benefit from a single-payer system, but are unlikely to all be activists for reform, while the sick might want to be activists but are too few and probably too concerned about their disease to demand political reform. The prime culprits and beneficiaries of the system (insurance, hospitals and pharmaceuticals) have the most resources to influence the system, but don’t want any changes. The only thing that makes me hopeful is the dialectic process, by which as things get worse and problems can no longer be denied, some change will eventually happen.