The Freedom-From-Reality Caucus

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The delay is said to be a defeat for President Trump and Speaker Paul Ryan, but both men have done about as much as they can. They’ve listened to different points of view across a diverse coalition of Members and 33 Governors, and the House bill is a realistic compromise that can improve health-care markets, protect the federal fisc and, by the way, has a chance of becoming law. No one has offered a better policy alternative to the American Health Care Act that could pass the House and Senate.

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As recently as Wednesday, the White House and congressional leadership had nearly whipped a majority for the bill. But the coalition broke down as the Freedom Caucus made 11th-hour demands about ObamaCare’s “essential health benefits,” or EHB.

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The EHB regulations define 10 broad categories of health-care services that all ObamaCare-compliant insurance plans must cover. Conservatives argue that rescinding these rules qualifies for the “reconciliation” process that requires only an up-or-down Senate vote. Because EHB mandates increase the cost of insurance—by 3% to 17%, depending on the estimate—repealing them might lower federal costs and therefore be eligible.

But there’s a debate about that in Congress, and Mr. Ryan and Senate Majority Leader Mitch McConnell want to make sure that the Senate parliamentarian doesn’t reject the bill in toto on procedural grounds. Ordinarily this would be no way to make policy, but amid unanimous Democratic “resistance,” Republicans have little recourse.

The Freedom Caucus responded by converting EHB and reconciliation into matters of high principle. The result has been a slew of negative media coverage about the insurers that would be supposedly unshackled to dump coverage for cancer, maternity and substance-abuse care. That led in turn to a cascade of centrist GOP defections.

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Repealing EHB is good policy, but some of its distortions can be fixed administratively, and is EHB worth capsizing the entire bill? The Freedom Caucus is saying one regulation is more important than everything else the bill does, such as cutting spending on net by $1.15 trillion, cutting taxes by $999 billion and reducing the deficit by $150 billion under the latest Congressional Budget Office estimates.

Dying on this Hamburger Hill means giving up the first modernization of Medicaid since the program was created in 1965, as well as reforms to achieve a fairer, more accountable and more market-based individual insurance system that conservatives have pursued for decades. Failure of the health bill will also jeopardize tax reform by adding $1 trillion to the budget baseline and creating a public perception that Republicans can’t govern

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