Why The Healthcare Reform Bill Went Down In Flames

Tyler Durden's picture

Via Global Macro Monitor,

OK, comrades, let’s check our partisanship at the door and deal with some real analysis on the health care bill that just went down in flames. Here are a few of our thoughts on why the Trump/Ryan healthcare bill to repeal and replace Obamacare went down and some economics behind it...

1)  Most important, the bill had no support throughout the country.   The latest poll released Thursday afternoon showed that only 17 percent of the country supported the plan.

The Quinnipiac University poll, released Thursday afternoon, shows fewer than one-in-five voters, 17 percent, approve of the Republican plan to replace Obamacare. The majority, 56 percent, disapprove, with slightly more than a quarter, 26 percent, undecided on the proposal.- Politico

2)  Ceteris Paribus (all other things equal) doesn’t hold in negotiations.  Almost every concession Trump/Ryan made to the hard-right Freedom Caucus resulted in a loss of moderate Republicans, such as the Tuesday Group.   The last straw seemed to be the gutting of the services provided by a typical insurance policy.

House Republicans leaders promised hard-right conservatives yet another concession on the health care bill on Wednesday, but it has already lost key support from House moderates and may seriously endanger their chances of getting the bill through the Senate. Ahead of the vote on Thursday, GOP leaders said the Senate would gut Obamacare’s Essential Health Benefits rule after the House passes the American Health Care Act.


That rule requires insurance plans to cover a basic minimum of health care services. These benefits include maternity and newborn care, pediatric care, emergency services, substance abuse treatment, and prescription drugs. Organizations representing 400,000 doctors wrote a letter to Congressional leaders earlier this year asking them to keep these requirements in a replacement of Obamacare. – Think Progress.

3) The legislation was a “corner solution.”   That is,  it only had the support of Republicans and was not a nonpartisan bill.  President Trump sounds like he has learned through this process that the country wants affordable health care for all and will reach out to Democrats on the next iteration.  This should neuter the Freedom Caucus in blocking the next bill.

4) Bad numbers.  The CBO’s estimate that 24 million would be kicked off health care and 14 million next year, in an election year, was devastating.

CBO and JCT estimate that, in 2018, 14 million more people would be uninsured under the legislation than under current law. Most of that increase would stem from repealing the penalties associated with the individual mandate. Some of those people would choose not to have insurance because they chose to be covered by insurance under current law only to avoid paying the penalties, and some people would forgo insurance in response to higher premiums.  – CBO

5)  Conservatives complained health care premiums did not come down enough.  Bingo!   There are many other reasons health insurance premiums are rising rather than just Obamacare.  Premiums were skyrocketing before Obamacare.  We know firsthand.  Second, the simple demographic dynamics of the U.S. of an aging population are a fundamental reason why insurance costs are rising.  The pool of insured is getting older and hence the higher costs.  This is the whole philosophical basis behind Medicare — older folks are priced out the insurance market and need government subsidies.

6) Bad economics.   The health care act would have had a deleterious economic impact.  The Achilles heel of the economy is the disparity in the distribution of income and wealth, probably at its worst in the nation’s history.  If you provide relief to the higher income groups, who have much lower marginal propensities to consume and tax the lower income groups through higher healthcare costs, who have higher marginal propensities to consume, economic activity is depressed.

the American Health Care Act, and the results are not pretty. An $883 billion tax cut, $274 billion of it going to the richest 2%. $880 billion stripped from Medicaid. And 24 million fewer insured individuals over the next ten years. – Forbes

That is is kind of mean, no?

7) The bill was rushed.  It should have been debated and tweaked through the normal committee process and will in the next iteration, which will need 60 votes in the Senate. Therefore a bipartisan bill.

8) The Upshot.  Aside from the Freedom Caucus, we believe the American government, Republicans, in particular,  have learned from this political disaster, the large majority of the country wants universal affordable health care and the next bill will be one to repair Obamacare.  This marks a philosophical win for President Obama.

How will the loss affect President Trump’s agenda going forward?   Not positive, but hard to assess its lasting impact.  He is definitely weakened politically, however.   Will the Freedom Caucus now feel more emboldened to block tax reform if it adds to the budget deficit?    This keeps the disastrous Border Tax Adjustment (BAT) in play, which is tantamount to the government playing Dr. Frankenstien with the U.S. economy.

We did warn last month of policy overreach by a president who lost the majority of the vote — 25K people rallies, aside.

What worries us most is the government is misinterpreting the November victory as a big mandate, which leads to policy overreach and massive pushback by the population resulting in social instability.  – GMM, February 2017

Stay tuned.

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Looney's picture


If I’m not mistaken, 0bama’s first push for the Health Care reform turned into a dud and THAT happened with 57 Democrats in the Senate.

Then, suddenly, out of nowhere, they decided to give it another try and, with helping hands of two Republicans, Olivia Snow and Scott Brown, they succeeded.

Call me a looney, but there will be another 0bamaCare bill very soon, a plain REPEAL.


NoDecaf's picture

"A philosophical win for Obama"?

This guy may have some points in this article but that is not one of them.
The democrats and Obama own this thing now.

Laddie's picture

Obama and the Demonrats only own what the MSM tells the goyim they own.

Trump's actions after the defeat are in line with this analysis written BEFORE Trump said what he said:

An interesting take on what happened, hopeful!
Republicans Pull Obamacare Repeal Bill!

jbvtme's picture

good food is medicine.  the rest is window dressing. and quality excercise (without cell phones and headphones)

Chris Dakota's picture
Chris Dakota (not verified) jbvtme Mar 26, 2017 6:51 PM

Paul Ryan Black Widow

Hugh_Jorgan's picture

This was my personal fave on this fluff piece:

"President Trump sounds like he has learned through this process that the country wants affordable health care for all and will reach out to Democrats on the next iteration.  This should neuter the Freedom Caucus in blocking the next bill."

LOL! Seriously? Reach out to the same Dems who are all salivating to see all Trump policy to fail spectacularly while he simultaneously dies publicly in a flaming car accident? (or some such combination of assinine leftist flights of fancy) Plus, the feckless Dems will NEVER admit that there is any kind of problem with ObamaCare by voting an overhaul/change, NEVER!

For all Trump's business accumen he doesn't understand Washington. Worse, the people that he has surrounding him, that are supposed to do this, are obviously feeding him BAD info/advice. The NWO obviously wants Trump out ASAFP and have pulled out all the stops RINO and Dem are sabotoging him every step of the way and he seems to be mostly just following along.

The author is either stupid, a shill or is just not paying attention.

TwoHoot's picture

This is a Trump victory. Obamacare will sink into chaotic failure (as it was designed to do)  without a single Republican fingerprint on it.

Trump is wise to just move on to the next pressing issue.

hibou-Owl's picture

Trump, I told you so! Not my problem, it was the previous clown.

When its burnt to ashes, the pheonix will rise.

Trump has the winning hand, just too soon to show the cards.

Hugh_Jorgan's picture


It would have been a Trump victory if he had backed the freedom caucus in opposing the RyanCare bill and repeatedly hammered home the hypocrisy in the fact that the House under Ryan voted to completely repeal the ACA 60 TIMES! THAT is how you attempt to drain the swamp. (It may not be the best way to stay breathing for long, but that is another issue).

Backing a GOP version of the government-controlled prepaid healthcare is a complete sell out of a key Trump campaign promise. Period.

N0TME's picture

Call me a looney, but there will be another 0bamaCare bill very soon, a plain REPEAL.


--- Yes! Repeal it! Health care market will go nuclear for a bit, then stabilize. Let the Insurance providers compete like mad dogs.  Free market wins the day.  Am I wrong????

bobdog54's picture

Right on, if indeed a free market AND serious tort reform. The big elephant in the room that the lawyers aka Congress refuse to discuss never mind admit too is the cost of malpractice insurance and the BIG cost of malpractice AVOIDANCE by the hospitals and practitioners.

johngaltfla's picture

Nope. Too many in the GOP like Obamacare, they just won't say so publicly.

chubbar's picture

Don't know the author of this piece but by the tone of the article he's a diehard Hillary supporter. Americans would like cheap healthcare, period. They aren't voting to provide money so other people get healthcare. Most of us presume that the insurance companies are making obscene profits from insuring healthcare so we feel there are ways to give money back to those who pay the most or to those who can't afford any but could if it was cheaper.

This 2% number thrown out for who benefits the most from tax cuts is interesting. Is there a yearly income attached to that number? That might convince some that those in the 2% aren't all that "rich" when they find out they are included in that number. When 95 million working age people are under or un employed, it doesn't take much of an income to get placed in the 2%.

I don't think the takeaway for Trump is that the american people have decided that everyone should be insured regardless of cost, nor should people be forced to pay for a private service that they don't want.

I'm sorry that there is suffering, disadvantaged, poor, unhealthy and other shitty deals being dealt with by others. That being said, it isn't my fault nor is it my responsibility to make it right for them. I have enough to do just to keep my family OK. This isn't some socialist utopia we are trying to build here. If anything, just get the gov't the fuck out of healthcare and make sure the insurers are not bilking people out of money by charging an absurd premium. Hopefully competition will lower some prices.


thecondor's picture

I read the article on his page and in the comment section, the author supports medicare for all. 

crossroaddemon's picture

A plain repeal is a political impossibility, for reasons that ought to be obvious. 

knightowl77's picture

ObamaCare got ZERO Republican votes...They had 60 votes in the Senate until Kennedy died....Scott Brown was elected on the promise that he would break the 60 votes they needed in the Senate...thats why in the end they passed ObolaCare under reconcilliation

dfwpike's picture

You are mistaken, Looney.

Obama's first attempt at healthcare reform was a success (Obamacare) and was signed into law in 2010.

Both Olympia Snow and Scott Brown (Republican Senators) voted against the bill. In fact, not a single Republican in the House or Senate voted for the bill. The Dems had to use reconciliation (only 51 votes needed) to get it passed through the Senate.

caconhma's picture

Let us be honest. The Obamacare proposal was a catastrophe:

  • Only God knows who was writing it. It never was debated and/or discussed with the Congress members
  • The Trump's organization and Trump personally have shown total incompetence working with the Congress and disregarding the will of American people.
  • It would screw up everybody except GS and their WallStreet mafia. The average Joe would be in a deep shit.

So far, President Trump was behaving as a buffoon, and a lair without any understanding of what he was doing. Either Trump starts to be a real US President or he is finished.

Victory_Garden's picture








TBT or not TBT's picture

There's nothing about war mongering that requires anyone to allow muslims in.  These are independent policy matters.  

Wulfkind's picture

LYING TRUMP told us that he was going to convene a special session of Congress to REPEAL and REPLACE Obamacare.


LYING TRUMP told us that the very first day of his Presidency he was going to work to REPEAL and REPLACE Obamacare


LYING TRUMP told us we were going to LOVE our new healthcare plan


LYING TRUMP told us it would be SO EASY to REPEAL and REPLACE Obamacare


LYING TRUMP told us that HIS healthcare plan would be a FRACTION of the cost of Obamacare


LYING TRUMP told us he was going to conduct a FULL COURT PRESS to get RYANcare passed


LYING TRUMP said that he knows how to deal.....he can SEAL the deal





Winning. America.

Caloot's picture

Umm... It went down cause it sucked..?

curbjob's picture

It went down because luckily there was a room full of old white cunts deciding the future of woman's health care. 

Look, I'm glad they derailed this pos bill, however the fact remains ...

the conservatism that the Freedom Caucus represents is a dream of returning to woman pregnant in the kitchen and blacks in the cotton fields.



Aside, as an atheist, I view prayer as talking to the faeries at the bottom of the garden  ... however I will admit to closing my eyes on occasion and wishing them all a quick end from terminal brain cancer.


curbjob's picture

Jesus, only 8 down v's in an hour ... ZH ad revenue resembling Trumps approval ratings ?


Tyler, may I suggest hitting up arthritis drug manufactures and related corps .. perhaps   Harley* trike conversion shops ??

Erek's picture

"...universal affordable health care..." That term has become a joke!

Hugh_Jorgan's picture

Exactly. Free Stuff has to paid for by someone. Creating a false right to "Free Expensive Stuff for Everyone" is a monsterous deed and will be paid for by everyone. Moreover, there is more to these "costs" than just monetary costs.

VWAndy's picture

 It went down because the government cannot ever admit it fucked up and correct any mistakes. Its a psycopahtic cult thing.

Nobodys Home's picture

Ocare architect Gruber:

"Lack of transparency is a huge political advantage. And basically, call it the stupidity of the American voter or whatever, but basically that was really really critical for the thing to pass."

Logan 5's picture
Logan 5 (not verified) Mar 26, 2017 1:14 PM

Like trying to put lipstick on a pig that you're trying to teach to sing at the same time.

I Write Code's picture

Well why not, that pig looks pretty good, in that dress and high heels.

orangegeek's picture

Ryan may have set up Trump to fail, but I doubt it - Trump used this failure as a opportunity to say, "you fuck around Ryan and you are fired" - see Judge Jeanine rant. Trump capitalized on this - smart.  Ryan is now contained and more aligned with Trump's orders.


This could have been a trial balloon and Ryan got snagged down in the process.


Trump wants this shit fixed fast - he has far greater things on his mind - beyond tax reform.


Trump has extended the olive branch - as time moves on, o-care will get worse and once again, Trump will offer the dems access to contribute - about 30-40 votes worth - it will be a race for the dems to line up once this catches on.


The conservatives that try to control women's vagina (ie: abortion) are passe - this does not fly anymore - stay out of the bedroom conservatives and pay attention to quality of life issues like quality jobs, lower taxes, health and quality, lower cost education.


So for now, we wait - I don't think we will be waiting for long.  Trump is a shaker and a mover.


Trump wants all this crap cleaned up for Ivanka when she takes over - oopsie, did I say that??  LOL

cheech_wizard's picture

Had it actually gone to a vote and passed... Trump could have still vetoed it because the bill did indeed SUCK.

Standard Disclaimer: And Paul Ryan will soon be swept out of his position as House Speaker because he to, indeed SUCKS. (KEK willing!)

MuffDiver69's picture

Yep..Ryan is gone. Trump wants a middle of road bill and that takes some democrats. Freedom Caucus is living in the fifties...

TBT or not TBT's picture

They are barking back to the late 1780's.    The 50's were a time of high taxes and heavy regulation.  

Wulfkind's picture

And yet everybody longs for the 50's 

cheech_wizard's picture

Fucking duplicate posts drive me fucking insane. Add a delete post button.

Sebastion's picture

assuming you took 9th grade civics- 

how does Trump fire Ryan?  All Ryan has to do is make himself chairman of the intel committee, start subpoena's, and Trump is done, gone over.

MuffDiver69's picture

No downside for the people this failed, but certainly is for Obamacare...This isn't a sporting event. So move on to taxes and hang all the politicians out...

oldguyonBMXbike's picture

End the insurance racket. i will not seek healthcare until after the mass Boomer die-off. Every single mother with a lifetime of bad choices is now "qualified" in healthcare simply, because the Boomer die-off demands supply...

MuffDiver69's picture

It was good this failed. I'm well off and comfortable in life, but we need a public private option. Make private insurance mandatory for people like me in a free market setting and bring the public up to par by making everyone use same quality doctors and treatments for catastrophic care..

Most doctors refuse to partake in Medicaid and Medicare as is. We need to guarantee a good wage for services in public options and let the market allow the private side to enrich doctors for services rendered....Take the middle man out...

oldguyonBMXbike's picture

The middleman is the insurance company. 

MuffDiver69's picture

Yep and the States also derive huge revenue regulating these companies and funneling people into state approved doctor networks..

MedicalQuack's picture

Worse than that is doctors in network with United Healthcare are getting paid on the average at rates less than 12% of Medicare..yeah it gets worse..



PoasterToaster's picture
PoasterToaster (not verified) MuffDiver69 Mar 26, 2017 1:30 PM

Nothing should ever be mandatory.

oldguyonBMXbike's picture

The greatest advice I can give to anyone is eat healthy, exercise and stay as far away from doctors and hospitals as possible.

Smedley's picture

Are you serious? Have you seen these people?


Good luck.....