A few days before the retreat, I met up with the man who, perhaps more than any other figure in the conservative movement, had maneuvered the party toward complete and unbending opposition to Obamacare: Michael Needham of the Heritage Foundation. Needham, 35, is the chief executive of Heritage Action for America, a feral cur of a lobbying organization established by the venerable conservative think tank in 2010 to (as its website puts it) “hold Congress accountable to conservative principles.” Though other organizations — among them the Club for Growth and Americans for Tax Reform — have vigorously opposed Obamacare from its inception, Heritage Action has spent the last six years almost monomaniacally focused on demanding that legislators abolish the hated law. It scores them on what it deems critical votes and loudly condemns any and all apostasies. It names names and, when necessary to its ends, is happy to defy the Republican leadership. In violating Reagan’s “11th Commandment” not to speak ill of others in his party, Needham has come to rival Ted Cruz as one of the least popular Republicans in Washington.
Needham would not seem an obvious choice for this distinction. Smooth-skinned and passively handsome in the manner of Mitt Romney, he grew up on Manhattan’s Upper East Side. His youthful acquaintance with struggle was limited to being a Mets fan. After graduating from Williams College in 2004, Needham went straight to work for Heritage, where he was made its director of Asian studies, despite having never visited Asia. In 2007 he briefly left the think tank to become a policy aide for the presidential campaign of Rudolph W. Giuliani, the most liberal of the dozen or so Republican candidates in that cycle. By the time Obamacare was signed into law in March 2010, Needham had again temporarily left Heritage, attending Stanford Business School and dating a Democrat whom he would later marry. There was little in the cards to prefigure his imminent future as the self-designated — and at times deeply reviled — lead driver in the Obamacare demolition derby.
Like virtually every Republican in Washington, Needham was not especially enamored of Trump during the primaries. “Donald Trump’s a clown,” he said on “Fox News Sunday” just a month after Trump announced his candidacy — adding, with evident distaste, “This is a guy who believes in socialized medicine.” Needham’s preferences ran more to Bobby Jindal, and of course to Cruz, whom Needham reflexively referred to by his first name. Still, Needham and his adopted cause had emerged as unambiguous winners of the 2016 election. On the first day of his presidency, Trump signed an executive order to “seek the prompt repeal” of Obamacare.
Thus had Trump and Needham — two men who had never met — become allies. “I think one of the big disagreements we’ve had with the party for a long time is that we think when you’re trying to win an argument, it can only happen when you start them,” the young C.E.O. said as he sat in his Capitol Hill office, looking somewhat fatigued from having spent the previous weekend toilet-training his child. “And this kind of maniacal focus on ‘governing’ ” — his voice taking on a mocking tone — “when all governing means is a bill-signing to get good press, instead of laying out a vision of where you want to take the country, was one of the big divides we had.”
But the long, and at times quixotic, struggle to repeal Obamacare in which Needham has been a lead combatant has more closely resembled a street fight than anything that could reasonably be termed an “argument.” And though it may appear otherwise in a dawning age of Republican near-monopoly on government, the argument is today far from over. According to a January Fox News poll, Obama’s signature program now enjoys a 50 percent approval rating. There is no guarantee that Republicans in the Senate will sign onto legislation that risks leaving millions of their constituents suddenly without health care coverage while alienating key donors — drug makers, insurance companies and doctor associations — who helped shape and support the law Trump now seeks to replace. “The joke around Washington,” the former Democratic congressman Jim McDermott told me, “is that the Republicans are going to repeal Obamacare — and they’ll replace it with the Affordable Care Act.”
The building that houses the Heritage Foundation, on Massachusetts Avenue near the Capitol, stands as an eight-story monument to plain-faced perversity. It was here, in 1989, that the intellectual framework was first developed for what would become the Affordable Care Act. And it is here where Needham has spent the last six years trying to exterminate what he sees as the Frankenstein’s Monster that Heritage inadvertently set loose upon the land.
The basic architecture of the bill that would eventually become the A.C.A. was conceived in 1989 by the Heritage Foundation policy analyst Stuart Butler as a conservative alternative to government-managed health care. It was first put into practice in 2006 by Gov. Mitt Romney of Massachusetts, who devised his state’s health care policy with the help of two other Heritage health care specialists, Bob Moffit and Ed Haislmaier. But for many decades, conservatives had resisted increasing the federal government’s role in health care. That remained true in 2009, when the newly elected President Barack Obama undertook to pass legislation that would extend health care coverage to tens of millions of Americans.
What Obama and the Democratic-controlled Congress ultimately settled on was a framework of health care exchanges — marketplaces where health insurance could be purchased, and had to be, if you weren’t already covered. This was the so-called “individual mandate” first advocated (albeit in the context of a private-sector health care system) by Butler and later embraced by Romney.
Obama opposed the concept as a candidate, in favor of an unspecified plan that he claimed would lower costs. What many Democrats on the Hill — “probably more than half of our caucus,” McDermott says — preferred was a single-payer system, in which health care costs are borne not by insurers but instead by a single fund, typically originating from taxpayers, as Medicare does. But half of the Democratic caucus wasn’t enough for a bill to pass the House, much less the Senate. When a congressional majority failed to materialize for a hybrid measure, known as the “public option,” in which consumers would be allowed to choose among government-run insurance plans as well as private ones, Democrats were left with the individual mandate.
The final 2,700-page legislative package would aim to “increase the quality, availability and affordability of private and public health insurance to over 44 million uninsured Americans,” as the administration put it. Applicants whose income was between 100 percent and 400 percent of the federal poverty line would be eligible for federally subsidized insurance. Those with incomes at or below 138 percent would now qualify for Medicaid in states that chose to participate in the program. Young people up to the age of 26 were permitted to stay on their parents’ health insurance. Americans with pre-existing medical conditions could not be denied coverage. And a variety of other regulations, taxes, penalties and incentives would be set up to maximize participation on the part of insurers, recipients, physicians and health care centers.
Though the details of the Affordable Care Act, as the final bill came to be called, left plenty of room for disagreement, its fundamental reliance on taxpayer-subsidized health care overseen by the federal government was a concept anathema to most Republicans. In a 28-page memo written by the Republican pollster Frank Luntz in spring 2009, Republicans were urged to use the phrase “government takeover” when referring to the Democrats’ health care package. Less heeded was another admonition in Luntz’s memo: “It’s not enough to just say what you’re against. You have to tell them what you’re for.”
In the end, Republicans lacked the numbers necessary to block the bill. On March 21, 2010, the House finally passed on a party-line vote a version of the bill that was sure to be agreed to by the Democratic-controlled Senate. “We didn’t give in to mistrust or to cynicism or to fear,” Obama, announcing the bill’s passage that night in the East Room of the White House, said. “Instead, we proved that we are still a people capable of doing big things and tackling our biggest challenges.”
The day after Obama signed the bill into law, a four-term Republican backbencher from Iowa named Steve King drafted his own bill in the House to repeal it in its entirety. Since there was no hope of Speaker Nancy Pelosi’s considering King’s bill, he had decided to try a rarely successful legislative tactic known as a discharge petition — which, if it gathered signatures from 218 of the 435 House members, would force Pelosi to bring King’s bill to the floor for an up-or-down vote.
A couple of days after King made his move, in mid-June 2010, the two newly minted leaders of Heritage Action — Needham, then 28, and the 32-year old chief operating officer, Tim Chapman — met in the Capitol with Barry Jackson, chief of staff to John Boehner, the House minority leader at the time. Though Jackson today says that he has no recollection of their visit, Needham and Chapman both say they remember it clearly. After explaining the general mission of their new organization, the young conservatives brought up the recently passed Affordable Care Act. Heritage Action, they informed Jackson, intended to push House members to sign King’s petition.
Jackson’s response surprised Chapman and Needham. “He was very clear,” Chapman recalls, “that if we pushed forward on it, we would probably not get all the Republicans on it, and it would be politically detrimental to a lot of Republicans to be on it. He said, ‘I’ve seen all the ads the unions have prepared to run on this stuff.’ I don’t know where he’d seen them. We let off on the gas. We said, ‘We’ll agree to disagree on this one.’ It was the ‘aha’ moment for us: We just don’t see the world the same way.”
As both Chapman and Needham today concede, Jackson might also have had his own “aha” moment, recognizing them as impudent young jerks. Still, their aggression had the full blessing of Ed Feulner, then Heritage’s president, who says fondly of Needham, “He reminded me of myself 40 years earlier.” As for Heritage Action, he said: “We knew we’d be breaking some china.”
Among Republican elected officials, the Heritage Foundation had long been regarded as a tweedy grandfather, revered but not feared. The think tank was proficient at spewing out white papers and keynote speeches. But because of its status as a 501(c)(3) nonprofit, it could not devote a substantial part of its activities to taking positions on congressional votes or campaigning against political foes. Heritage sat by helplessly in 2003 while President George W. Bush, dismaying conservative purists, promoted and then signed into law a new federal entitlement that used Medicare to extend prescription benefits to senior citizens. Two years later, Heritage could do nothing to rescue Bush’s Social Security privatization measure from defeat. Now, with Heritage Action as a 501(c)(4) “social welfare organization,” the foundation at last had its own squad in the fight. And in Needham, Feulner had a jut-jawed lieutenant whose job, as Feulner put it, would be “to run the flag up the flagpole and see who salutes.”
Steve King’s bill was Heritage Action’s first flag. It had not occurred to Needham and Chapman to see things Barry Jackson’s way — to consider that Republicans’ taking an unambiguous stand to completely repeal Obamacare could cost them House seats five months later. Jackson’s hesitancy to campaign on full repeal was in fact shared by many Republican leaders. One of them, Senator John Cornyn, the chairman of the National Republican Senatorial Committee, said of Obamacare in May: “There is noncontroversial stuff here, like the pre-existing conditions exclusion and those sorts of things. Now, we are not interested in repealing that. And that is frankly a distraction.”
To Needham, there was only one way to look at the matter. “What’s the point in having a conservative party if we’re not going to fight a massive federal intervention in health care?” he told me. “It’s one-sixth of our economy!”
Needham and Chapman knew there were risks in allying themselves with King, an inveterate bomb-thrower with a deep yearning for the spotlight. But King was also a tenacious conservative. On June 16, he introduced his discharge petition, and Heritage Action began sending out emails to the foundation’s 661,000 members, urging them to pressure representatives on both sides of the aisle to sign it — ominously adding in a news release that “those who fail to support this effort are responsible for Obamacare.” The petition soon picked up two highly influential signatories: Representative Tom Price of Georgia, an orthopedic surgeon who was chairman of the Republican Study Committee, the House’s internal conservative think tank; and Representative Mike Pence of Indiana, a staunch conservative and personal hero of Needham’s who refused to vote for Bush’s Medicare bill in 2003.
A month later, Heritage Action turned up the heat on the 34 Democrats — most of them so-called conservative Blue Dogs — who voted against Obamacare in March but had yet to sign King’s discharge petition. In a press statement, Needham declared, “I know their constituents, who will be attending town halls this August, are eager to hear why they do not support the repeal effort.” In September, a single Democrat, Gene Taylor of Mississippi, added his signature. The tally reached 173, well short of what it would take for King’s bill to make it to the House floor — much less to get it passed and then sent over to the Senate, where Republicans’ appetite for abolishing Obamacare altogether was less acute than it was in the House.
But though the discharge petition had stalled, King and Heritage Action could justifiably declare a victory of principle and, eventually, an I-told-you-so. Overall, those who pledged fealty to repealing Obamacare fared better that November than those who didn’t. As King told me recently: “The Barry Jacksons and the John Cornyns were clearly wrong. Look at what happened to the Blue Dogs in 2010. There were 53 of them when Obamacare passed. Now I don’t know if you can count three of them.” King was exaggerating, but not by much — there are 18 members of Congress’s Blue Dog Coalition today. “Pelosi made them walk the plank, and they fell like tenpins after that. Since then, I don’t think there’s been a freshman Republican who didn’t run on the full repeal of Obamacare.”
Bashing Obamacare instantly became a winning Republican message — an indictment of its polarizing namesake, of big-spending Democrats and of the boogeyman of creeping socialism all rolled into one. During the 2010 midterm election cycle, opponents of the A.C.A. spent $108 million on ads pillorying it. As a reward to the 87 Republican freshmen whose victories had enabled the party to retake the House, Eric Cantor devoted part of his first day as the House majority leader to introducing H.R. 2, the “Repealing the Job-Killing Health Care Law Act.” It would become the first of more than 50 bills that would pass the House over the ensuing four years designed to repeal, defund, restrict or delay implementation of Obamacare. None of them stood any chance of becoming a law — they were dead on arrival in the Democratic-controlled Senate. But to Heritage Action, they served a purpose: in the organization’s parlance, to “lock in” members, to “orient” the Republican Party to conservative principles so that it would “do the right thing.”
At times, however, what looked like the “right thing” was, from Needham’s vantage, in fact the wrong thing. In April 2011, for example, a bill dismantling part of Obamacare did clear the House and then the Senate, and was signed into law by President Obama without hesitation. It was a measure to eliminate the requirement that small companies submit 1099 forms for all transactions exceeding $600, which essentially served as a tax to help pay for the program and which Heritage Action had condemned as “burdensome” and “onerous,” guaranteed to generate paperwork and high accounting fees.
But Heritage Action, because of its ironclad resistance to “partial repeal,” actually opposed the measure to get rid of the 1099 provision. Yes, it would help small businesses — but then those same small businesses would no longer care to be part of Heritage Action’s crusade. As Needham later told me, “We felt that when anything less than full repeal becomes acceptable, you open the door for every lobbyist in town to say: ‘Hey, while we’re working on full repeal, let’s fix the 1099 issue. Or let’s fix the franchise-restaurant issue’ ” — the popular shorthand for an A.C.A. provision requiring companies with 50 or more employees to provide health care to anyone working over 30 hours a week. “You eventually over time whittle off various constituencies that we want to keep as part of the full-repeal platform.” Partial repeal would be well and good if it got rid of what Needham called a “vital organ” of the law: the individual mandate, say, or Medicaid expansion. But “those vital organs were never going to go down if repeal was defined by Washington’s lobbying class. It would be 1099s and these heavily lobbied issues, and then we’ll be stuck with Obamacare.”
In mid-2011, Heritage Action declared that it would “key vote,” or place greater emphasis on, bills it deemed especially relevant as litmus tests of members’ conservative bona fides. Needham also began issuing scorecards on how frequently members of Congress were voting down spending bills. The notion of a 20-something former Giuliani aide grading veteran lawmakers on their principles did not go over well. Representative Rob Wittman of Virginia was taken to task in a Heritage Action analysis for casting only four of a potential 11 votes to cut spending during a series of roll calls; he had to inform Chapman that he had missed those votes because his father had died. (Chapman did not change Wittman’s score but did explain the reason for Wittman’s absence on the Heritage Action website.)
Representative Geoff Davis of Kentucky, a onetime target of Heritage Action’s grading system, fumed to me about the organization’s absolutist browbeating, which came as Republican members were doing their best to thwart Obama’s agenda. “If I’m trying to stop someone’s bleeding on the side of the road, I don’t need to also give them a lecture about how they need to do aerobics and lift weights three times a week,” he said. Echoing the opinion of many Republicans in Washington, Davis asserted that Needham’s operation was less about legislative results than its own fund-raising: “Very quickly, it became a conservative for-profit operation,” he said.
More than once, Chapman recalls, Republican leaders on the Hill called Feulner to say, “You’ve got to rein these guys in.” But Heritage Action had other defenders besides Feulner. The new Republican Study Committee chairman, Jim Jordan of Ohio, felt that Needham’s organization was instrumental in pushing the party rightward. Mick Mulvaney of South Carolina, a rising star in the Tea Party class of 2010, characterized Heritage Action’s messaging as “invaluable.” Even the complaints were tacit acknowledgments of the organization’s growing clout. As a 501(c)(4), Heritage Action was not obliged to disclose its finances, but it was known to have received millions, including $500,000 from the Koch brothers. Rank-and-file-conservative House members pointed with pride to their high Heritage Action scores. Leadership aides saw no choice but to include Needham and Chapman in strategy meetings.
And Heritage Action’s relentless focus on its message — Obamacare is a disaster that must be repealed in full — was already taking its toll. Before the law had even gone fully into effect, polls consistently showed that most Americans disapproved of it. The A.C.A.’s unpopularity persisted despite a number of modifications meant to improve the program and thus quell discontent. As Kathleen Sebelius, the Health and Human Services secretary at the time, told me: “The notion from Day 1 was to make this work and listen carefully to the feedback, and to help dampen anxiety without gutting key provisions in the law. What made things difficult was that most of the law wasn’t going to be implemented right away. There was this huge gap in time between designing the bill and actually having the benefits fully in place, which gave a lot of opportunity for the opposition to say, ‘This will kill jobs, pestilence will come, vermin will fall from the sky’ — and very little opportunity for us to say anything other than, ‘Wait and see.’ ”
On this point, if nothing else, Sebelius and Needham could agree: The war on Obamacare would become far more difficult for opponents to wage once the actual benefits became available. New enrollees would begin receiving health care coverage on Jan. 1, 2014. It was a glum axiom among conservatives that once Americans were handed a new entitlement — Social Security, Medicare, Medicaid, food stamps, unemployment insurance — they were loath to part with it. Moreover, once a gigantic program fully insinuates itself into the federal governing apparatus, disentangling it is a formidable task. “One of my political heroes in town is Don Rumsfeld,” Feulner told me. “And one of Rumsfeld’s rules is that you want to act as quickly and aggressively as you can, because every day someone in the bureaucracy is narrowing the options you’ll have two days later. That’s clearly what’s happening with Obamacare. Every day the options for full repeal get fewer and fewer.”
On Sept. 24, 2013, House Republicans, goaded by Heritage Action and Ted Cruz, drafted legislation in which they agreed to raise the debt ceiling if Obama agreed to a number of conditions, including delaying implementation of his health care law by one year. Senate Democrats objected, but House Republicans wouldn’t budge. As a consequence, the United States Treasury warned it would soon default on its obligations, and on Oct. 1 the government began shutting down. A couple of days later, Tim Chapman met with several senior Republican staff members and members of conservative activist groups in a House conference room.
The shutdown was the crisis point Heritage Action had hoped for — that cherished moment when Republicans finally took a bold, principled stand. The public would express outrage that the president was willing to hold America’s full faith and credit hostage over the much-disliked Obamacare. Democrats would go wobbly. Republicans in both the House and the Senate would stand firm. In the end, Obama would cave. Or so Needham and Chapman hoped. “Kudos to leadership for doing the right thing,” Chapman told the group. “Now let’s prosecute this case!”
His enthusiasm was met with a wall of silence. The others in the room stared at him with a welling resentment. Finally, a tax-policy analyst at Americans for Tax Reform said to Chapman: “You’ve been saying the Republicans need to be brave. Well, we’re doing that. We’ve shut the government down. But what does Heritage Action intend to do to put pressure on the Democrats? So far, the only money you’ve spent over the past few months has been a half-million dollars attacking Republicans.”
Chapman went visibly red-faced. Only a couple of days into the shutdown, it was now occurring to the chief operating officer of Heritage Action that he and Needham had been abandoned by conservative leaders. Within days, the Republicans in the Senate buckled and, with the House Republican leaders in tow, signed a debt-ceiling deal with Obama that said almost nothing about health care. Congress was blamed by the public for causing the shutdown, and its approval ratings plummeted.
Throughout the shutdown, Needham insisted that the public would eventually reward Republicans for standing up to Obamacare. “Look,” he told me at the time, “there’s more Americans who are aware right now of the fact that we have one political party that owns Obamacare and was willing to go to the great lengths of shutting down the World War II Memorial in order to preserve it, and another party that tried to stop it. And Americans deserve that type of clarity.”
This opinion was apparently not shared by Speaker Boehner. In December 2013, he told reporters that groups like Heritage Action had “lost all credibility.” A month later, on the “Tonight” show, he called the government shutdown a “predictable disaster.”
But the continuing intransigence of the repeal advocates was beginning to wear down the White House. Initially, Sebelius says, “we were more focused on the Republican attorneys general across the country who challenged the constitutionality of the law. Until that was resolved by the Supreme Court in June 2012, that was our focus. The congressional action was viewed more as sour grapes and not altogether realistic. Clearly the president wasn’t going to sign anything that would strike down his brand-new law.” By the time of the shutdown, though, the repealers appeared to have succeeded in getting inside the Obama administration’s collective head. As Oct. 1, 2013 — the date HealthCare.gov was to be open for enrollments — approached, little time was available to subject the website to tests that could expose its shortcomings. But “the one thing that wasn’t feasible, knowing how vehemently the Republicans were determined to stop it at any cost, was moving the deadline,” she said. “That would have mobilized the opposition to the point that we might never have been able to launch it at all.”
And so the White House rolled out a deeply flawed website. By this time, the Republican critique of Obamacare was already becoming a self-fulfilling prophecy. The A.C.A. had been passed with only about one-tenth of the funding that it would need to be fully operational, with the expectation that the rest would be portioned out by Congress annually, through the appropriations process that funds discretionary government programs. From 2011 through 2014, as the House Republicans played round after round of fiscal brinkmanship, Obama reluctantly signed last-minute budget deals that continually shortchanged Obamacare.
“They did a very effective job making sure there would never be enough to fund implementation,” Sebelius told me. “And they came after the budget over and over. Anything that looked like it could be used, they made sure was gone.” That was especially the case, Sebelius said, when it came to educating the public about the program’s benefits — funding that would have made a difference in the 19 states where governors and legislatures had refused to expand Medicaid and had no interest in promoting Obamacare. “Any effort to put in dollars for outreach on the federal level,” she said, “were immediately stripped out.”
It’s impossible to know for sure how much of a role the hobbling of Obamacare played in the outcome of the 2014 midterm elections, in which the Republicans captured the Senate and expanded their majority in the House. But Republicans uniformly campaigned against the program, while Democrats found themselves at pains to demonstrate its virtues. As a bonus for Needham and Chapman, Eric Cantor, the House majority leader had been drubbed in the primary by a Tea Party-backed Republican. In September 2015, Boehner would step down as well.
A month after Boehner resigned, the House considered yet another bill targeting Obamacare. But this one was different from its predecessors. Sponsored by Representative Tom Price, who in just over a year would be Trump’s pick as secretary of Health and Human Services, H.R. 3762 was a “reconciliation bill,” a budgetary measure to defund the health care program that would, in accordance with Senate rules, require only 51 votes to pass in the upper chamber. That threshold was attainable, now that the Republicans had 54 Senate seats. The bigger hurdle was a more arcane one: To qualify for this lower passage threshold as a reconciliation bill, every item in the legislation had to be deemed a budgetary fix, rather than an extraneous provision, by the Senate parliamentarian. Accordingly, it did not include repealing the individual mandate and Medicaid expansion. Better to let the Senate legislative aides confer on those matters with the parliamentarian, one staff member who helped write the bill told me.
That approach was not good enough for Needham and Chapman. Heritage Action announced its strong disapproval of the reconciliation bill, instructed members to vote it down and warned that the measure would be key-voted. Insisting that it was “universally acknowledged” that the repeal of the exchange subsidies and Medicaid expansion would qualify as reconcilable items, Heritage Action stated that it would be satisfied with nothing less.
The new speaker of the House, Paul Ryan, ignored Heritage Action. On Oct. 23, the reconciliation bill went to the House floor, where all but seven Republicans voted for it. Apoplectic, Needham termed the act a “charade” that “undermines the party’s longstanding position of full repeal.” He added, “We expect the Senate to do better.”
The Senate Republicans did. Their version of the bill included repeal of the individual mandate and Medicaid expansion. The parliamentarian ruled that both provisions were extraneous and did not therefore qualify in their present form for a simple-majority vote.
A watered-down version of the bill, which kept the individual mandate and Medicaid expansion but stripped away the ability to enforce either, then passed the Senate and was reapproved by the House. It was sent over to President Obama. On Jan. 8, 2016, he vetoed it. Obama’s final defense of his namesake program would come almost exactly 10 months later, when he received President-elect Trump in the Oval Office and urged him not to eviscerate Obamacare.
Obama’s words, Trump said the following day to The Wall Street Journal, had made him reconsider abolishing the law in full. But 10 weeks later, as one of the very first acts of his presidency, Trump signed an executive order whose mission statement was the “prompt repeal” of Obamacare in its entirety.
The Affordable Care Act’s approval rating has rarely exceeded 50 percent. And over time, as it has strained under the multitude of compromises that were necessary for its passage, it has proved itself worthy of several of the criticisms aimed at it. Though for 80 percent of health care recipients (including those receiving health care from Medicare, Medicaid or their employers) annual rate increases are at historic lows, for the rest the story has been different. The premiums have been rising because of a variety of structural reasons, and because federal assistance to recipients to offset the costs has been in many cases inadequate. Or, as the health-policy analyst Robert Laszewski puts it, “They created a Cadillac with Chevrolet subsidies.” But it is also because unit costs have continued to soar — like the price of prescription drugs, thanks to the sweetheart deal that the pharmaceutical industry cut with the Democrats in exchange for being an early supporter of the law. Some rural states like Alaska have seen very little competition among insurers — something that a public option might have addressed, had the insurance lobby not spent a fortune to defeat that provision. Of the 23 nonprofit insurance co-ops set up by the Affordable Care Act to compete in such areas, only a handful remain — probably at least in part because the co-ops received from Congress only $2.4 billion of the $6 billion originally appropriated to establish them.
To make Obamacare economically feasible for insurers, the program needed to attract a large pool of young and healthy recipients to offset the costs of providing care for the older and less healthy. That ratio has yet to prove satisfactory for many insurance companies — one of which, Aetna, announced last year that it would be abandoning the program in several states. (Aetna publicly blamed Obamacare, saying that it was losing money participating in the exchanges, but a federal judge ruled that Aetna’s real motive was to escape scrutiny for its possibly illegal merger with Humana, and court documents have shown that the company was making money in some states where it was claiming not to.)
Then again, it was always the industry’s expectation that the law would prove flawed in places, and that those shortcomings would be addressed legislatively. As Karen Ignagni, the lead lobbyist for the health-insurance industry during the formation and passage of Obamacare and now president and C.E.O. of Empire Health, tactfully puts it: “On the Affordable Care Act, there was a strong difference of opinion between Democrats and Republicans going back to the initial days of discussion. And so there was never a coming-together.”
In spite of all this, Obamacare has done far more good than its critics predicted it would. As of 2014, insurers cannot deny coverage to anyone based on their current health status — a meaningful protection for the 133 million Americans with chronic illnesses. Over 15 million poor or near-poor citizens are now receiving Medicaid benefits in the 31 states (as well as the District of Columbia) that have opted for this expansion. Another 3 million Americans under the age of 26 have been allowed to stay on their parents’ health care plans, thanks to the provision in the A.C.A. that Heritage Action warmly refers to as the “slacker mandate.” Meanwhile, during each month that Obamacare has been in existence, the private sector has grown. The bill has not proved to be the “job killer” apocalyptically described by its Republican opponents.
Now that the law is in place, trying to tinker with it in a measured fashion, deciding which parts to discard and which to keep, would be more complicated than simply determining what the public likes and what it doesn’t. As Jim McDermott says: “You can’t just reach in and pull out one thing. It’d be like a doctor doing surgery and saying, ‘Well, since you’re not using your spleen today, let’s take it out.’ It’s all wired together in a very complex way.”
That wiring represents, among other things, the compromises worked out with the various players in the health care ecosystem — doctors’ and nurses’ associations, hospital groups, insurers, drug companies — that enabled the passage of Obamacare in the first place. As Ignagni points out: “It was very unique that all of the different industries were willing to sit at the table and engage in problem-solving together. I don’t really recall any time when that has happened in our economy on any issue.” Collectively, those groups spent close to $273 million on lobbying during the height of the Obamacare debate. They will surely spend a similar sum haranguing Congress to pass a replacement that favors them.
Many conservative remedies have been floated over the years and have been consolidated into Speaker Paul Ryan’s 37-page “A Better Way” summation: expanded health savings accounts, assorted tax credits and refunds, medical-liability reform, portability of insurance from one job to the next and the ability to purchase insurance across state lines. But the problem for Republicans is that Obamacare’s sweeping coverage has changed the paradigm. Of the 31 states that have opted for expanded Medicaid coverage, 16 have Republican governors. None of these governors have expressed a desire to throw their states’ residents off the rolls. At the same time, the fitful and at times rhetorically muddled transition from the known (Obamacare) to the unknown (“something terrific”) has risked throwing the health care industry into turmoil. The aftershocks are likely to be not only economic but also political.
“If you take Obamacare as it looks right now,” says the policy analyst Robert Laszewski, a longtime critic of the legislation, about half of enrollees “don’t get a subsidy because their incomes are too high. They make $90,000 or $100,000 a year but are in the individual market. These tend to be Trump supporters. So if he further destabilizes this thing and there are 20-to-50-percent rate increases, he’ll be screwing his own people.”
Last month, Representative Steve King once again offered his full-repeal legislation, maintaining that in doing away with Obamacare, the country would immediately be “far better off,” even if nothing were done to replace it. To King and Heritage Action, failing to seize this moment of opportunity would constitute a grave betrayal. “It’s pretty clear that the conservative base is expecting Congress to do this,” Chapman told me. “If Congress goes back to the voters in 2018 and people are still enrolling in Obamacare, I think that’s going to be disastrous.” Speaking of the base, Chapman predicted, “They’re basically going to splinter off and create a third party.”
But it took more than the conservative base to elect Donald Trump, and it will take more than them to re-elect many Republican senators and representatives in 2018 and 2020. The rest of the public has begun a decided turn against King’s and Heritage Action’s position. The same Fox News poll last month that found Obamacare’s overall favorability to be 50 percent also found that only 23 percent of respondents favored fully repealing it — a new low since the law was signed nearly seven years ago.
After Trump remarked to The Washington Post on Jan. 15 that he planned to provide “insurance for everybody,” I thought I had better gauge Michael Needham’s reaction. Taken at face value, Trump did not sound much like a man hellbent on tilting health care policy rightward. “I’m concerned when I hear that kind of talk,” King had told me. “I don’t know how deeply he’s gone into the details.”
But Needham chuckled breezily when I brought up Trump’s statement. “I think right now there’s a lot of people who want to jump on words,” he said. “Everybody wants to ensure every American has access to high-quality health care. That is pretty clearly what Trump was saying. What’s the overused phrase? Trump supporters take him seriously, not literally.”
Nor did it seem to bother him that Republicans on the Hill were in a frenzy to develop a consensus for replacement legislation. Up to now, Needham reminded me, the goal had been to inculcate in the party a ceaseless lust for Obamacare repeal. “For the last eight years,” he said, “it hasn’t made sense to litigate the nuance of, Do you use a tax credit or a tax deduction, or what are your views of block-granting?” The Republicans might not end up with a single gargantuan replacement bill, and maybe that was as it should be. “We’re probably in an age where smaller, humbler pieces of legislation are easier to get consensus around.”
This struck me as sensible and, at the same time, somewhat naïve. If, as in Heritage Action’s dream scenario, Obamacare were to be immediately vaporized, it would leave a yawning vacuum — and the first thing to fill it would be anxiety. Every gruesome case of once-insured families now left to die would be duly chronicled by the media. Legislators would panic — but, if recent history is any judge, their reaction would be tame compared with that of the man who now thoroughly owned the post-Obamacare landscape. Was it really so hard, I asked Needham, to imagine Trump faltering under the specter of bad press and equally bad approval ratings and hastily offering up a Trumpcare that bore a suspicious resemblance to Obamacare?
Needham paused for a moment before saying, in a vaguely amazed voice: “I’m a little surprised by the question. Right now, I don’t see much evidence of that playing out.” Trump’s vice president was Mike Pence, “my first hero when I came to Washington.” Tom Price, the nominee for Health and Human Services secretary, and Mick Mulvaney, whom Trump tapped to run the Office of Management and Budget, were longtime supporters of Heritage Action. The former senator Jim DeMint, Ed Feulner’s replacement as president of the Heritage Foundation, was helping to shape the selection of Trump’s prospective Supreme Court nominees. Trump’s team was loaded with Heritage staff members. All this counted for as much as whatever the new president himself thought. “Richard Viguerie, one of the icons of the conservative movement, said to me that what was great about Reagan was that when he walked into the room, you saw your friends and allies walking with him,” Needham told me.
It was a pleasing image, conveying undying fellowship. Yet even Reagan, fierce inveigher against socialized medicine that he was, did not make a dent in Medicare, the program he so loathed, during his two terms in office. Quite the contrary, in fact: He briefly expanded its benefits to include catastrophic care for the elderly before Congress struck down the measure less than a year after Reagan left office.
Now came the president whom Needham once accused of embracing socialized medicine. Maybe he would somehow turn out to be a more reliable friend to the conservative movement than Reagan had been. Or maybe Washington would prove, hardly for the first time, that even the best of friends will let you down.