The Senate healthcare bill is out and, by and large, it is a reflection of the House bill. The biggest change is the tax credit structure which gives larger breaks to lower income brackets. This will make the messaging somewhat easier, but let’s be honest, the Democrats and the media were going to attack it no matter what for rolling back any welfare expansion. Most analysis won’t center on whether it will stabilize the failing insurance markets (it will) or reduce baseline premiums (it also will). No, the brainless class warriors will make this into a ‘who wins and who loses.’ They will focus exclusively on supports for income levels, while conveniently ignoring net worth. They will also denounce any reductions in welfare spending, although this spending has zero effect on healthcare outcomes. In effect, the will decry the idea that the old and rich won’t have their high quality healthcare expenses paid for by the young and poor, will simultaneously arguing it is a travesty that the poor aren’t forced to obtain coverage that won’t have any measurable impact on their health. Of course, these were the same people predicting Obamacare would have over 22 million enrolled in the exchanges and premiums would decline by $2,500, so not sure why anyone would listen to them.

This bill offers the same mixed bag to conservatives, entitlement reforms and welfare reductions while largely keeping Obamacare’s regulatory structure intact. The GOP is taking a major political risk in tackling healthcare and entitlement reform. Politically, it would be far easier to allow the continuation of soaring premiums and dysfunctional markets, while hammering the Democrats as the cause of the problems. Instead, they’ve chosen to try and fix the issues, and thus will be assigned the blame for any eventual problems. It may not be the repeal conservatives hoped for, but it does represent a serious attempt to address the problems caused by Obamacare. Republicans have devoted the bulk of their early legislative efforts at putting together this bill and there is little chance they can back out now. Minor dissension may lead to minor changes, but this bill looks set to pass. The sunk cost fallacy demands it.

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