House Ways and means Committee Chair Kevin Brady joined me this morning to discuss the new GOp health care bill that repeals and replaces Obamacare:
HH: And I’m joined now by the chairman of the House Ways and Means Committee, Kevin Brady. Chairman, welcome, it’s great to have you. Thank you for answering the call this morning. There aren’t a lot of your colleagues out and about talking about this big, big important bill.
KB: Well, I think they’re probably all traveling back to Washington from their home districts. I got in late last night, and look, I’m excited to talk about this.
HH: That’s terrific. Let’s begin with the first question. Why is there no CBO score?
KB: They’re just taking their time to get it right. We’re making some big changes. One, we have two big principles here we’re going for after the repeal of the mandates, the penalties, the subsidies, two big principles. One, return state control of health care, secondly, restore the free market. The CBO is having trouble getting their heads around the states, not Washington, controlling health care and actually giving people in each state a wide range of plans to choose from rather than the three levels that Washington and Obamacare has dictated in the past. So there’s a good reason they don’t have a score, yet, and that’s because we’re giving freedom to people they haven’t had before.
HH: Can you actually have an effective markup and ask members to vote without a CBO score in either Energy and Commerce or Ways and Means?
KB: We certainly can, and here’s why. We know what the general numbers are heading into this, mainly because we’ve had this better way proposal out since last summer. And so as we put that together, we put the general numbers together working with CBO, so we started from 90% knowledge of where we needed to be. We made some changes here over the last week after listening to Republican members that wanted to make sure that the tax credits that helps small businesspeople like it helps big businesspeople today, was it had an income limit on it. We made those changes and a few others. And so yeah, I think, I absolutely know we can. It’s the right thing to do.
HH: All right, now Chairman Brady, probably the most influential conservative analyst of health care is Avik Roy. His headline this morning is House GOP’s Obamacare Replacement Will Make Coverage Unaffordable For Millions. Otherwise, It’s Great. How do you react to that?
KB: (laughing) Well, look, we know the Obamacare experiment failed. It directed from Washington expensive health care with expensive subsidies and directed not from what patients need, but from what Washington wants. We know that failed. We’re trying something different – affordable health care with affordable tax credits directed by patients and families, you know, plans that they need and can use. And I’m convinced, frankly, that we are giving everyone who doesn’t get health care at work and doesn’t give the government an opportunity to buy a plan that’s right for them and their family that can go with them from job to job, state to state, home to start a business or raise a family even into retirement that freedom and that choice not only lowers the cost of health care, it makes it actually usable for families. So I disagree with that whole premise.
HH: All right, I want to go through the three major objections of Avik. I actually kind of like your bill, because I was always a fan of Nixon’s negative income tax, and this is an iteration of that applied to the health care markets. But here are Avik’s big three. Number one, the February 10th draft contained language that would have returned control of essential health benefits to the states? That language appears to be deleted. Is that in fact correct? Are you retaining the Obamacare regulations on essential benefits?
KB: No, but we have to go about it two different ways because of reconciliation. The rules of the Senate, we can’t repeal it completely, and so Secretary Price at Health and Human Services can begin that process. We’ll have to finish it with a statutory change as well. But there’s no question at the end of the day states will decide which plans have which coverage. It will be innovative approaches, so the essential benefits, one size fits all, will not be retained in the long haul.
HH: An aside, Mr. Chairman, if you guys, if Secretary Price puts out a comprehensive essential benefits regulation and finalizes it, and then the House and the Senate using simple majorities under the Congressional Review Act rejects it, that ends it. I just want to point that out. There’s a second simple majority pathway out there called the Congressional Review Act. Anyway, part number two…
KB: Well, we’re in the majority, so we expect to be adding and working with Tom Price as our partner in this.
HH: Avik’s second problem is with the 30% surcharge to a normal insurance premium when continuous coverage is interrupted. He argues that this represents an extraordinary recipe for adverse selection death spirals. What do you think?
KB: I think just the opposite. Look, we’re leaving the Obamacare world of mandates, enforced into plans which by the way, the American public rejected. We’re opting instead for personal responsibility. People don’t have to choose any of these plans. They can go uncovered their whole life if they choose to do that. Just be aware that unlike someone who wants to keep coverage, chooses a plan, helps pay for it and participates in it, when that person who has continuous coverage gets that very costly illness or sickness, they’ll be covered at the same rate they always were. But if you chose to not have coverage, your health care, as you would imagine, will be more expensive. I don’t know how you confuse personal responsibility and choice with the Obamacare mandates.
HH: I think that’s a very effective response. I do. That’s why I want you guys out flooding the zone right now. Let’s go to the one, though, that I’m not persuaded on. The critical mistake, writes Avik this morning, of the AHCA, is its insistence on flat, non-mean tested tax credit. The flat credit will price many poor and vulnerable people out of the health insurance market. People just below the poverty line will be strongly dis-incentivized to make more money, effectively trapping them into poverty. Actually, Mr. Chairman, I don’t know how you argue with this. This is just simple economics. If you don’t means test it, people are going to be incentivized to stay home. Incentives matter.
KB: Sure. Well, they’re working off the old draft. So the law that was introduced, the bill that was introduced yesterday has an income limit. It begins to phase out at $75,000 a person, $150,000 for a couple for joint filers. Also, I would disagree with this as well. The credit is immediately available for those working their way off of Medicaid. In fact, we worked very closely with Republican governors. They wanted a seamless transition, because you know, big government’s argument is, the question is how many people can you get on Medicaid. For conservatives and Republicans, it is how many people can work themselves out of Medicaid, and to do that, you need that seamless tax credit available. And the states will now have a pool that they can use to either help those with very high medical costs, or exactly those people he’s describing that are working off Medicaid. States can actually, like in Wisconsin, where Governor Walker made a really brilliant approach on not doing expansion of Medicaid, yet covered people while working this Medicaid affordably. We give states the funding to help those people in exactly that situation. So I would say the new draft is a much better version of that. It works very well for conservative principles.
HH: Excellent response again. Now Mr. Chairman, how much of this is simply the way to get the bill to the Senate? Because to me, until you get a Senate bill that gets 51 votes, we’re really talking past each other. And if this is just the vehicle by which we get the negotiation with the upper chamber started, that makes it much easier for members to raise their hands and say yes. So how much of that is going on here?
KB: Not much, and here’s why. We’re using the reconciliation process to get around the filibuster in the Senate. They have very tight rules for doing this. All of this has been designed to fit into those Senate rules. I’m sure the Senate will want to make some changes within their rules. You know, we would encourage them always to make it better at every step. But this was designed to pass the Senate, to get to the President’s desk, and now. And so this is more than just an opening bid. Far more, this is the real architecture for repealing Obamacare, returning control to the states, and giving people freedom they haven’t had before to choose their own health care.
HH: Oh, this is important, Mr. Chairman. Explain this to me. Is this all choreographed? Do you know what’s going to happen in the Senate, what their changes will be and what your response will be? And in other words, is this a drama, the script of which, the ending of which is already written?
KB: Not necessarily. Look, the Senate plays a key role here. Yes, we’ve been coordinating with them on this, but they may have their own ideas. Or because these are Senate rules we’re trying to comply with, they may be able to find a way to do things that the House cannot, which we would encourage them to do, by the way, as long as you’re making this about more state control, less Washington control, and more personal freedom.
HH: I am talking with the chairman of the House Ways and Means Committee, Kevin Brady. Chairman Brady joining me on short notice this morning, and I am very deeply appreciative of that…
KB: My pleasure.
HH: …because let me continue onto a couple of the key things. Why, for example, Mr. Chairman, are you keeping the so-called Cadillac tax?
KB: Well, we are not. As you know, it has been delayed through 2020. We delay it from going into effect even further, later in the decade. But I refer to those Senate rules, and one of those rules deals with spending in the second ten years, and it just so happens the Cadillac tax sort of triggers one of the problem areas in the Senate rules. And so regardless of what the design was going to be, we’re only going to be able to spend that from taking place to later in the decade of ten years. So at the end of the day, let me assure you, the Cadillac tax is not going to take place.
HH: That is so important to communicate.
KB: Yeah. Yeah, it really is.
HH: (laughing) Because I’ve seen so many criticisms of that this morning. So what you’re saying is the Cadillac tax is dead, but it can’t be dead, yet.
KB: Not under the Senate rules, but I can assure you it will be.
HH: All right, conscience protections. The Hobby Lobby decision, I talked about this with Secretary Price yesterday.
HH: He says it’s very important to him. And yet you’re retaining essential benefit protection in these regulations. What does it say about abortifacients?
KB: Well, two things. One, we make sure that one, we defund Planned Parenthood in this legislation. Secondly, we are ensuring the Hyde Amendment, that no taxpayer funding for elective abortions in these health care plans goes forward. I will predict that’s going to be a fight in the Senate, because there are some Senate Republicans who feel differently about that. But in the House, we are strongly united that taxpayer funds should not be used for those plans, and the tax credit should not be available for them.
HH: So does that fit under the Senate rules, because as Avik pointed out, you’re keeping the essential benefits regulations of the Obama years, you’re waiting for Secretary Price to move.
HH: But is there legislative language on Hobby Lobby?
KB: Yeah, Hugh, let me just say again, we’re playing by these Senate rules, and so the claim that essential benefits are going to remain just isn’t true. We’re just going to have to get it in a two-step process – one from the White House, one from Congress. And so yeah, look, pulling Obamacare up by the roots in all 159 federal agencies in between you and your doctor, it cannot be done with one 122 page bill. It’s going to take a continuous effort, but at the end of the day, removing essential benefits and giving states the ability to approve a wide range of innovative health care, that’s at the heart of our replacement.
HH: Is there, though, specific language about Hobby Lobby and protecting conscience, Mr. Chairman?
KB: Let me double check for you, Hugh. Let me double check for you.
HH: All right. Now just a few more questions. Is there going to be a federal exchange where people can shop with the lines erased? President Trump campaigned on erasing the lines. I understood that to be a national marketplace similar to the Federal Employees Health Benefits Program that I once regulated long ago.
HH: Is there going to be such a place?
KB: To be determined, and again, I hate to keep referencing the Senate rules, but it’s worth doing this approach to get around the Democrats’ obstructionism in the Senate. It is key to getting this to the President’s desk. However, some of these rules make it a little tougher, and we’re just going to have to fight for it. And this is one of those areas where being able to buy across state lines, states being able to put together compacts, taking a consumer-driven approach, we’re going to have to fight for that in continued legislation going forward. In fact, we have a whole list of Republican conservative reforms like medical malpractice reforms and others that will have to move in separate legislation.
HH: Does the President support the AHCA, Kevin Brady?
KB: He does. He does. Look, anytime the President stands there at the joint session of Congress and essentially lays out this is what I want, the House, this is what we’re delivering to this President.
HH: All right, do you have the votes, Chairman Brady, in Ways and Means to pass the bill that was dropped last night?
KB: Yes, we do.
HH: Does Energy and Commerce have those votes?
KB: My understanding is yes, they do.
HH: And so given that it will come out of both committees, what is the schedule for moving it to the House floor?
KB: So the process, timetable is we posted publicly for the Americans to read. In fact, I was in the airport in Chicago last night late. I ran into two people from my district, and they were actually reading the bill online. And so both committees will mark it up, that is consider it and approve it this Wednesday. It goes to the Budget committee to be able to be put together next week to the House floor after that. And so the House will complete its business on this in March and move it to the Senate. We clearly want to get ahead of the Supreme Court conversations with Neil Gorsuch and the confirmation process in the Senate, which is sure to be bruising, so that’s why we’re acting right now.
HH: So I’m joined by Kevin Brady, chairman of House Ways and Means. It’s the last couple of questions I have for you, Mr. Chairman, and they concern Medicaid. Yesterday, a letter came out from four Senators saying they will not support any bill that significantly undercuts the Medicaid expansion. As I understand it, the AHCA allows states that expanded Medicaid to keep their federal funding through 2020, and then newly-eligible people are not going to be so well off. How do you explain Medicaid expansion to your four colleagues across the building in the Senate who are so deeply concerned about it?
KB: Well, this is a challenge going forward. We have people who the states that did expand, you have those who, in my view, wisely didn’t, including my home state of Texas. Gregg Walden tried to really address them fairly, both groups. And so the solution, I think, is pretty straightforward, which is those expansion states can continue adding people for two years. But after that, they cannot. Their match, their share of those expanded Medicaid patients will gradually increase, and they’ll be treated and funded just like others in Medicaid. And in return, across all of Medicaid for the first time in 50 years, states will be given the flexibility to use Medicaid designed for patients in their states. But there will be spending caps on that going forward. This is, for Republicans, conservatives, I waited a long time and fought a long time for the day that we took this open-ended and fastest growing entitlement, and started to put some reasonable spending caps on. It’s critical.
HH: That makes so much sense to me, but I want to put this in terms laymen can understand. It sounds to me like the governors, the Republican governors who bet on Medicaid expansion, like John Kasich, won their bet, because you’re going to meet them halfway, and they’re going to get new enrollments for two more years, and the people who didn’t expand, they made, maybe they made a bad bet, a good policy bet, but people who wanted more money made a good bet back in 2012 when they expanded. Am I right about that, Mr. Chairman?
KB: No in this regard, because the states in this, we’ll make sure we continue to explain everything in this bill. So for the states that didn’t expand, and again, in my view, wisely didn’t do so, they will be getting some funding to address those who are in that group, sort of that coverage group between 100% of poverty and 138%, the expansion, they will actually get funding to help with Medicaid to address those most vulnerable populations. And so those states are not being punished by their conservative and frugal decisions, which I think is the right way to go.
HH: All right, now the left will immediately say, and this one, I don’t know. You need a CBO score, and you’re not going to get it to know, how many people will lose their insurance under the AHCA?
KB: You know, I know there’ll be some wild exaggerations we’ll get, but let me just tell you this. We will get more definitive scores by the CBO very soon. But secondly, I just want to say one thing. You know, if you’re just doing the coverage numbers, I think we’re measuring the wrong things, because you’ve got people with Obamacare coverage they can’t use. You know, they’re getting huge subsidies, but the co-pays and the deductibles, it’s like they don’t have health care at all. And in many states, two out of three people forced into Obamacare, and given generous subsidies, have found a way to be exempted from it. So in my view, you’ve got millions of Americans who work at small businesses, or they’re entrepreneurs themselves, or they’re in between jobs who simply cannot afford Obamacare, who for the first time will have a chance to look at affordable plans tailored to them, and have the choice to use them. And so I think at the end of the day, I think we’ll cover more Americans with affordable health care rather than just cover them with an expensive plan they can’t use.
HH: Well, I think that’s a great argument if you want to say the people with real insurance, that actually works for them will actually go up. But the people with paper insurance will go down. But we still need a number, and I know that number’s coming from the left today. So I’d like to hear your estimate, the people who will actually be dropped, will lose their paper, even if it’s bad paper. What is that number, Mr. Chairman?
KB: Hugh, I don’t want to make an estimate. My argument is that for the first time, those people are going to have real choices and affordable health care rather than what they have today. I’m optimistic we’re actually going to give more access, more access. People can choose to take this or not, than they have today.
HH: Mr. Chairman, thanks again. 30 seconds, when’s this bill go to the Senate?
KB: So by the end of March is the timetable we are on.
HH: Chairman Kevin Brady, I appreciate so much. Flood the zone. Go out and talk all day long with anyone who will talk to you. It’s the only way this thing gets through, and we need it to get through. Thank you for being here this morning.
End of interview.