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Honorable Mark Sanford

Representing the 1st District of South Carolina

Healthcare Bill Pulled From Floor

Mar 25, 2017
Blog Post

A couple hours ago, the American Health Care Act was pulled from consideration for a vote this afternoon. It marked the end of a very long and tumultuous week, but before I head home, I wanted to write a few thoughts on what’s transpired and what it means. This debate in large measure has been intense over the last month. I have literally had thousands of conversations with people at home on this subject during this time.

In setting the stage and doing so, a few hours ago, I left one of the more inspiring and powerful meetings that I’ve ever experienced during my time in politics. For even those most cynical about politics today, you would have been as inspired as I was in being a part of what took place. Vice President Mike Pence, HHS Secretary Tom Price, M.D., and the President's Chief of Staff all stepped in and surprised the group with their attendance. The Vice President did most of the talking, and I cannot describe to you how impressed I was in the way that he acted as an emissary for the president.

After they left, there was much heartfelt discussion on what people believed might best represent the people that they represent back home. There was conversation about how best to support President Donald J. Trump. There was deliberation on how to best incorporate market principles and conservative ideals. In short, people were tired, emotionally worn, but absolutely committed to the kind of deeply reflective analysis and conversation that’s vital to good outcomes. Not everyone agreed on many of the points covered, but everyone was deeply respectful to the differing points of view within the room. If we had more discussions like these in any political body, church vestry, or corporate boardroom, we wouldn’t always find the right solution, but the process by which we got there would include everyone and make for better solutions.

All this having been said, let me be clear that I believe that I understand a couple of keys critical to the healthcare debate before us…. I think the same is true for so many I have talked with over the last few weeks.

One, I believe it’s essential that we indeed repeal and replace the Affordable Care Act. It's equally vital we replace it with something that helps people at home and across this country in addressing healthcare needs and paying for them in the individual health insurance marketplace. I am committed to doing so, and what I’ve found is that seeming stopping points can ultimately prove to be beginning points in life and the things we work on. Accordingly, I believe today’s action will prove to be a catalyst that will bring a variety of philosophical perspectives together in forging a consensus to do just that.

Two, politics is the art of the possible. This is not an academic debate, and perfection in some philosophic sense should not be held as the standard by which we judge legislation. My years as governor taught me this. It’s been reinforced in life in coming to hopefully have the wisdom of knowing just a portion of all I don’t know. This said, it’s vital that we not codify bad ideas...and for groups that range from The Heritage Foundation to FreedomWorks to a whole host of other associations and perspectives, many people came to believe that this bill in its present form just wasn’t there yet.

Three, a win on this issue went well beyond the issue of healthcare for the president, the Congress, and Republicans as a governing party. This is just one of the reasons that the group assembled in that room a few hours ago wanted so much to find a way to get to yes. In the end though, it was Calvin Coolidge who said “It is much more important to kill bad bills than to pass good ones….” And again, many believed this one just wasn't there yet, given the outcry from so many differing vantage points on its passage.

The bill in its present form had three very significant flaws in my view…

One, it didn’t repeal the Affordable Care Act. It was done this way because of leadership’s decision to use reconciliation as the vehicle by which they would move this bill to the Senate. This had the advantage of fewer necessary votes in the Senate, but the disadvantage of only partial repeal of a bill that the House had voted on 60 times over the last six years to indeed repeal. What was especially telling here was the fact that as late as last year, Congress sent to President Obama a bill of full repeal that was passed unanimously by Republican House and Senate members. Many of us asked many times why we were not just sending that bill that we sent to President Obama’s desk to President Trump? Our view was let Senate or House members explain why in the world they were for a watered-down version of repeal now that there is a Republican in the White House….when just months before had supported a much more robust bill.

Two, the decreases in the cost of an insurance premium would not come as a result of this bill. They would come in what was described as Bucket two and three that would come in time. Bucket two would come through enhancement of federal powers in this bill that would have strengthened the Secretary’s hand in making unilateral change. While this could be helpful with a Secretary of Health and Human Services as conservative as Tom Price, it could be used to a very different effect by later presidents and secretaries, should the political tide change. This was of long-term concern. Of short-term concern was the fact that any unilateral action by a Secretary can be challenged by the courts. Many conservative members of Congress who were former judges believed that this was a recipe for disaster. That the Secretary’s hands would be bound in ways that prevented reform and aid to small business people in the individual marketplace could undermine the very objectives of the bill.

Bucket three looked to be even more problematic. This would involve statutory change, and this came with two considerable problems. One was time. The normal Congress has probably two or three big issues before it; this Congress has seven or eight. This means that by the time we get through the budget, infrastructure, the debt ceiling, the sequester, the wall and immigration, FAA reauthorization, tax reform, and more, we will be into next year. And there is a real danger in this. Bucket three is the free-market reforms that would lower the cost of insurance premiums. But, if they don’t come until after the midterm congressional elections, I’m not sure how all this works out. People have wanted repeal to the Affordable Care Act because it hurts them. It hasn’t been philosophic - their premiums have gone up. If we pass healthcare and have supposedly checked that box, but people don’t see a change in what they pay, how is a single payer system not the supposed next answer? If one has tried the Affordable Care Act and then alleged market-based reforms (even if those market-based reforms were not really a part of the bill), how do people not next claim single payer is the answer? If we are going to give market principles a try, I think we should actually give them a real chance to show their worth.

The other problem with bucket three was that it’s still dependent on 60 votes in the Senate. We’ve had much debate about the artificial vote constraints in the Senate, and even the artificial rules with regard to filibuster and the ways in which that hampers conservative ideas moving forward. But if one does not change those rules in the Senate, reconciliation is not a panacea. You still have to pick up democratic votes to pass healthcare reforms that impact the very heart of what has frustrated so many across the First Congressional District.

Three, it did not change the foundation of the Affordable Care Act, which is found in Title 1 of that bill. What was proposed for today was good in the way that it got rid of taxes and penalties, but ultimately, these things were just financing vehicles for the foundation of what drove costs within the Affordable Care Act. This foundation is community ratings. These represent price controls. In the same way that price controls for rental apartments in New York City benefited some, while simultaneously distorting the marketplace for many more, this goes to the core of what the Affordable Care Act does.

As long as we leave that foundation in place, it will have a distorting effect in the individual marketplace. These distortions are what created the need for penalties and rewards designed to get people to do what the invisible hand of the marketplace would otherwise do. The question we all have to ask on this is whether a great House can be built on a bad foundation or sandy soil. In short, what I’m saying here is that we need to distinguish between the 80% of folks in the individual marketplace for whom insurance can work - and the 20% for whom it does not.

For the 80% of us who will largely be healthy over the course of our lives, we need to let insurance work. The premise of insurance is that we all save for a rainy day that comes for only some of us. The Affordable Care Act flipped on its head the idea of pricing risk, the idea of consequences, and a whole lot more, and therefore priced out of the marketplace many young people who instead simply chose to pay a penalty. With the incentives in place, the insurance pool became increasingly self selecting in bad ways that made it mathematically unsustainable. One can see this most recently in eastern Tennessee where 43,000 people are now without any form of insurance in the individual marketplace.

For the 20% of us who draw a bad genetic card or find ourselves in a horrific accident, I believe that rather than cost shifting from others in the relatively small individual marketplace, we should be overt. As a society, we should have a debate on how best to care for people in these conditions...but not do as we do in the Affordable Care Act, which is to hide the costs of a cost shift to care for these people who have profound health care needs.

All of this is worth a much longer conversation, but I wanted to give a couple of preliminary thoughts...given what just transpired here in Washington.