UPDATE - The House Freedom Caucus has announced its support for the amended legislation. Now the real action shifts to the moderates. The new changes give states the choice to seek additional flexibility (which must come with guarantees that they will either cover more people or reduce consumers' costs) that will result in a proliferation of new coverage options, many with lower price tags. But it will also mean that minimum coverage plans will be less comprehensive, and that some people will have to pay more, a concern addressed here. The GOP may be a long way from final passage of a new law, but this is an important step:
— POLITICO (@politico) April 26, 2017
The hotly-anticipated compromise from House Republicans on a new healthcare bill has reportedly been "finalized," as key leaders of the conservative House Freedom Caucus and centrist Tuesday group finally hammered out a deal, with heavy involvement from Vice President Mike Pence. As expected, the amended bill would maintain core protections that enjoy wide support among the public (pre-existing conditions, adult children remaining on parents' plans through age 26, etc.), but would grant states the option to apply for waivers to certain federal regulations and mandates. This would entail flexibility over which "essential health benefits" must be covered under any compliant plan, as well as the circumstances under which insurers could charge higher premiums to certain consumers, including some with pre-existing conditions. One key conservative group that opposed the original American Health Care Act has already endorsedthe new version, and others may follow suit. Politico reports that the House Freedom Caucus has warmed to the legislation, but some moderates (who've helped extract $15 billion in extra money for a patient stability fund) maintain concerns; passage is by no means assured.
With that backdrop in place, Vox's Sarah Kliff -- a pro-Obamacare liberal whose technical journalism is often good, but whose analysis is sometimes less so -- touched off a firestorm last night by reporting that the updated AHCA would exempt members of Congress and their staffs from any optional waivers sought by, and granted to, states. This reeked of the Democrats' arrogant and cynical efforts to shield themselves from the law they imposed on the country in 2010. Those provisions were eventually stripped out under strong pressure, but President Obama ended up using a unilateral executive trick to give Congress a special deal through the back door. Are Republicans marching towards making nearly the exact same politically-damaging mistake now? Early verdicts were mixed. HFC Chairman Mark Meadows angrily denied the Voxreport, with conservative policy activist Phil Kerpen arguing that the language of the bill was an explicit carve-in for Congress, not a carve-out. But Kliff stood by her reporting, and a spokesman for the Tuesday Group's Tom MacArthur affirmed that the waiver exemption is in the legislation. So who's right? The truth is a bit confusing, but after consulting with several sources on Capitol Hill, I believe we can offer some clarity. Kerpen and Meadows (who later said that any special exemption would be excised from the legislative language) are correct that the amendment explicitly requires Congress and their staffers to obtain their federal health plans through the federal law's marketplaces. It's right there in black and white:
PPACA1312(d)(3)(D). Don't be angry MacArthur says this cannot be waived. Be angry Obama already illegally gutted it. pic.twitter.com/ZfPboLYNnn— Phil Kerpen (@kerpen) April 26, 2017
But Kliff and MacArthur are correct that under the new amendment, Congress (and other entities such as the few remaining, failingObamacare co-ops) are not subject to any coverage waivers and exemptions that states might secure. Why? A well-placed source with deep institutional knowledge of the US Senate says this was purely a function of reconciliation requirements, and that structuring the language differently would have fatally disqualified the entire bill under those rules. I've been told that this flaw is a deep-in-the-weeds issue pertaining to the committee of referral. The source added that the likelihood of uber-liberal Washington, DC asking for coverage waivers is extremely remote -- thus rendering members of Congress unaffected anyway -- and that the best course of action would be to pass a simple companion bill under regular order making plain that Congress shall receive no special treatment whatsoever under a new law. This would negate any bad optics on the issue, and would almost certainly pass easily because even Senate Democrats wouldn't be foolish enough to filibuster the companion bill, thanks to the same dynamics that forced them to reverse their previous abandoned attempts to insulate Congress from healthcare policy.
Bottom line: The controversial item in the bill does not represent a desire from House Republicans to inoculate themselves against the consequences of their own law; it's nothing more than a procedurally-necessary technicality that gives the appearance of unfairness. A senior House GOP leadership source confirmed these details to Townhall this afternoon: "The language in question was added by the Senate Budget Committee to meet the rules for a budget reconciliation bill. Separate legislation will be introduced to fix it." Once this PR problem is rectified, the larger questions become whether or not the new bargain will attract a bare majority in the House, when a vote might occur, and then -- if those boxes are checked -- where do things go in the Senate?