Health

Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

Resurrecting the dead tends to have consequences.

But that may not stop Republicans from taking another crack at repealing and replacing the Affordable Care Act. The White House is reportedly working on a new version of a replacement bill that would shred protections for people with pre-existing conditions, in an effort to cut insurance premiums and win the support of the conservative Freedom Caucus. Shares of hospitals and Medicaid insurers fell on the news, which broke Monday evening.

They shouldn't worry. The GOP's American Health Care Act is as dead as it was the day it was released. It's as dead as it was the day House leaders halted a planned vote on the bill. And it will remain dead through inevitable further attempts to jolt it back to life. 

Again?!
Medicaid insurer and hospital shares dropped on the news of an attempted resurrection of the failed GOP health-care bill
Source: Bloomberg

Paul Ryan says the bill is in a "conceptual" stage. Think concept car -- something that has only the faintest connection to reality and little chance of actually coming to life. 

The changes as described by the Freedom Caucus leader, Rep. Mark Meadows, represent a significant tilt to the right for a bill that already alienated House moderates.

The new bill would reportedly let states opt out of the ACA requirement that insurers cover "essential health benefits," including things like prescription drugs and maternity care. And it would give states the right to let insurers charge sick people significantly more for insurance. It could make comprehensive health coverage basically unaffordable on the ACA's individual market and shift costs to the most vulnerable Americans. 

These changes directly contradict President Donald Trump's campaign promise to protect those with pre-existing conditions. They would turn off moderate Republicans, while still possibly not being harsh enough to bring the entire Freedom Caucus on board. In the unlikely event the bill is contorted sufficiently to satisfy conservatives, then the changes would render it even more un-passable in the Senate. 

Further humiliation and damage to the party's legislative agenda is more likely than the creation of a viable bill. The AHCA's failure has already derailed what was being called the "Trump Trade" by reducing confidence in the administration's ability to pass its economic agenda -- the S&P 500 is down 1.6 percent from its post-election highs. Continuing to focus on health care won't boost investors' hopes for tax reform or avoiding a budget-related government shutdown. 

Flattening
A stock market rally allegedly sustained by Donald Trump's election and proposed policies appears to be petering out
Source: Bloomberg

It's still unclear whether Trump intends to actively sabotage the ACA, hurt it via neglect, or figure out ways to bolster it. And this is the real destabilizing force for the health-care industry as insurers decide whether to stay in the ACA's individual market in 2018. 

Investors should focus on these issues, rather than the GOP's inability to accept that seven years of health-care promises have amounted to nothing.  

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Max Nisen in New York at mnisen@bloomberg.net

To contact the editor responsible for this story:
Mark Gongloff at mgongloff1@bloomberg.net