Medicaid is once again a conservative piñata

Margot Sanger-Katz writes at the New York Times that the Republican healthcare bill is increasingly becoming a rollback of Medicaid:

“[T]he Medicaid caps have not drawn the same public outcry as other provisions of the law that would cut back on coverage more directly. Several Republican senators have expressed concerns about changes to Obamacare’s Medicaid expansion, which broadened the program to include more low-income adults in 31 states. [ ] Others worry about changes to private insurance subsidies that would make insurance less affordable to older, middle-class Americans. Fewer have spoken out about the cuts to Medicaid’s legacy beneficiaries. That means that, as the Senate works out final details, the forced diet for Medicaid is likely to stay in the bill.”

The GOP bill plans draconian cuts to the Medicaid program, both by unwinding Obamacare’s expansion of Medicaid coverage to people earning up to 138 percent of the poverty line, and by capping the amount that the federal government will chip in to cover people on “traditional” Medicaid.  These cuts jeopardize healthcare for people from all walks of life, including middle-class families with children with disabilities, or elderly people in nursing homes.  Nearly one hundred million Americans rely on Medicaid—our country’s largest health insurer.

But in the conservative war against Obamacare, Medicaid has always been a convenient target.  In the first hotly politicized court challenge to Obamacare in 2012, the Supreme Court upheld the law’s individual mandate, but weakened its Medicaid expansion by making it voluntary for the states.  Even liberal justices Stephen Breyer and Elena Kagan joined the Court’s conservatives in striking down the mandatory Medicaid expansion.  This preserved the individual insurance markets for the middle-class, while leaving public insurance coverage for the near-poor at the whims of state governments.

Conservative lawmakers seized on the “Red State Option” opened up by the Court to make their stand against Obamacare.  Nineteen states held out and refused free federal money to cover nearly all of the expansion.  Instead, conservative state leaders denied healthcare coverage to some 2.5 million people in order to claim a scalp from Obamacare.

Conservatives at the time trotted out half-hearted pretextual reasons for spurning the Medicaid expansion.  Some argued that they didn’t believe the federal government would maintain funding for Medicaid.  Others second-guessed Congress for running deficits and taking on new debts to extend healthcare to more people.

The irony, of course, is that until now, the federal government has never permanently reduced state funding for Medicaid—and has twice increased funding in the last twenty years.  (A small exception was in 1981, when President Reagan and Congress enacted a temporary Medicaid funding cut.)  It required a conservative takeover of Washington to bootstrap in the spurious fear of Medicaid cuts that their ideological brethren supposedly fretted over in the states.

What’s more, the concern-trolling of state conservatives over the federal debt is proving just as hollow.  Congressional Republicans are poised to slash Medicaid funding for the poor with one hand while doling out gargantuan tax cuts for the wealthy donor class with the other.  The net impact of squeezing Medicaid on the federal debt will be negligible at best.  Yet the silence from conservative fiscal hawks is deafening.

A second irony (really more of a tragedy) in the Republican healthcare ransacking is that Medicaid had been the most successful vehicle for Obamacare’s coverage expansion, helping cut the uninsured rate in the United States to never-before-seen lows.  The subsidized private insurance marketplaces have only reached half the size that the Congressional Budget Office expected when the law was enacted.  But Medicaid has outpaced expectations, signing up 40 percent more people than CBO expected—even though a couple million people have been blocked from signing up by conservative state governments.

Medicaid is an inherently institutionally vulnerable program because its traditionally thought of as a program principally for the poor.  Liberals like Bill Clinton have tried to refashion our perception of Medicaid over the years, pointing out (correctly) that it provides life-saving and valuable services for the middle-class, too.

Up until now, Medicaid’s protectors have been able to stave off the full conservative assault on the program.  But it’s not without its scars from the persistent attacks.  Seven years after Obamacare became law, conservatives are still hunting for enough scalps to claim a victorious repeal.  And now that they’re in power, Medicaid is their juiciest target.  Perhaps they really will live out the fantasies of Paul Ryan’s keg parties past.

Kamala Harris & the progressive healthcare message

Sen. Kamala Harris is the newly-elected junior senator from California, and one of the Democratic Party’s rising stars.  She recently sat down for a live taping of the popular podcast Pod Save America in San Francisco.  Jon Favreau asked Harris about what the Democrats’ positive message on healthcare should be.  Her answer is worth exploring, for it gets at substantive decisions that Democrats must reckon with as they chart a path forward in both immediate resistance and future governance.

First, Harris said that “step number one is not to eliminate” Obamacare, reciting the Congressional Budget Office’s projection that the Republicans’ repeal bill will throw 24 million people off of their coverage.  So far, so good—but that’s not a positive message, it’s a defensive one.

Next, she pivoted to talking about ways to improve Obamacare.  But she only mentioned allowing the government to negotiate prescription drug costs “so these prescription drug companies aren’t just taking such advantage of us,” and pointed to the Epi-Pen price-gouging scandal.

Sensing that this was a pretty thin positive message, Jon Lovett pushed her to name more things that Democrats should do to improve healthcare.  And Harris responded by pointing to…the Cadillac Tax.  “I think we need to look at the Cadillac Tax and deal with that,” Harris said.

Harris continued, offering some prolonged word salad of stammering qualifiers before endorsing a Medicare for All single-payer system as the vision of progressive healthcare.  “And then there is what we need to do around really at some point figuring out how at some level we are going to have a policy that is Medicare for All.  That would be the ultimate and great place to be, Medicare for All.”  Her pitch for Medicare for All won much applause from the crowd.

Harris declined to formally endorse the single-payer bill winding its way through the California legislature, saying, “I like the concept but we need to work out the details.”  She concluded that as a country, “We need to get to a place where it is not a function of your income that you have access to healthcare.”

It’s worth unpacking that answer.  Leading off her “positive message” on healthcare by talking about the Cadillac Tax is baffling to say the least.   The Cadillac Tax is an Obamacare provision that imposes an excise tax on the most expensive — and generous — health insurance plans offered by employers.  This is meant to both generate revenue for Obamacare’s coverage expansion, and to steer employers away from uber-comprehensive insurance plans that help drive up healthcare costs.  The tax is unpopular—liberals like Bernie Sanders and Hillary Clinton have joined conservatives and labor groups in pushing for its repeal—and has been routinely delayed by Congress.  It isn’t scheduled to take effect until next year.

Presumably, when Harris says that we need to “deal with” the Cadillac Tax, she means we need to repeal it.  But endorsing a rollback of a subsidiary part of Obamacare that will help pay for its coverage expansions won’t exactly stir progressive ambitions.

Harris ultimately got around to re-iterating that guaranteed healthcare for all is the long-term progressive vision, backing a government-run system.  She stood up for the principle that healthcare is a right that should not be dependent on one’s income.  And letting Medicare negotiate drug prices is a fine idea—one that Trump himself might be amenable to working with Democrats on.

But there’s a lot to work through in Harris’s support for Medicare for All as the party’s positive vision.  As I have written, there is both significant apprehension and large institutional hurdles surrounding single-payer healthcare that won’t be easily overcome.  There are other progressive policies—like a Medicare buy-in, a public option, and expanded Medicaid eligibility—that would make progress toward government-provided healthcare for all, without crumbling under the weight of intense public and stakeholder opposition.

So is Harris endorsing Medicare for All as an imminent solution?  If so, is she throwing out Obamacare and starting from scratch, or building on it with incremental reforms?  What do those reforms look like?  Does that make Medicare for All in fact just a long-term aspiration that maybe just might eventually obtain “at some level”?

In Harris’s defense, a podcast interview probably isn’t the venue to suss out these nuances.  But without these details, “Medicare for All” becomes little more than a slogan—an applause line for liberal crowds.  Maybe that’s the future of progressive health policy: campaign on “Medicare for All”, but enact “Medicare for More.”

Harris is also far from the only prominent Democrat to fumble a progressive healthcare message.  Sen. Cory Booker (another potential 2020 contender) recently gave a similarly mealy-mouthed answer on Medicare for All, which his office cleaned up as “one of those ideas that must be considered.”

Like Booker, Harris is a compelling and engaging politician, and has an exciting future as a Democratic leader.  Like many other prominent procedural or “rights-oriented” liberals, she seems much more at ease standing up for social justice than for economic justice.  And she’s hardly the first upcoming Democratic politician to give a jumbled answer on healthcare—Barack Obama famously fell flat at a healthcare forum early in his 2008 campaign for president.

But Harris’s answer is illustrative of a bigger problem for the Democratic Party.  Maybe Democrats have been too consumed with the fate to save what they’ve already accomplish to flesh out just exactly what comes next.  But in resisting Republican efforts to tear down Obamacare, it’s essential to explain just what exactly the Democratic alternative looks like.  If Harris’s positive message on healthcare is any indication, there’s more work to be done on figuring out just what the alternative will be.

Hofstadter on FDR

I’ve been reading Richard Hofstadter’s classic The American Political Tradition and the Men Who Made It. His analysis of Franklin Roosevelt’s handling of the Great Depression is immensely valuable, both for its humanization of the modern progressive hero, and its lessons for progressives today.

Even though Roosevelt’s administration is remembered as a testament to countercyclical Keynesian spending, Roosevelt campaigned as a deficit scold even as the Depression worsened throughout 1932. According to Hofstadter, Roosevelt “called the Hoover administration ‘the greatest spending Administration in peace time in all our history.’” Roosevelt implored the country to “have the courage . . . to stop borrowing to meet continuing deficits.”

Roosevelt was also originally resistant to taking extraordinary measures to rehabilitate the country’s banking system. “In his first press conference,” Hofstadter writes, “he was asked if he favored federal insurance of bank deposits. He said that he did not.” Roosevelt did not want government on the hook for the losses of bad banks. Nonetheless, he soon signed into law the Federal Deposit Insurance Corporation for precisely this purpose—“a concession to a bloc of insistent Western Senators,” Hofstadter explains.

Roosevelt made a slew of conflicting promises to the country about how he would rescue the economy. As Hofstadter put it: “All Roosevelt’s promises—to restore purchasing power and mass employment and relieve the needy and aid the farmer and raise agricultural prices and balance the budget and lower the tariff and continue protection—added up to a very discouraging performance to those who hoped for a coherent liberal program.”

While admiring progressives look back in retrospect at Roosevelt’s economic rescue effort as a dedicated application of government ingenuity and Keynesian economics, his course was hardly deliberate. “The New Deal will never be understood by anyone who looks for a single thread of policy,” Hofstadter argues, calling Roosevelt’s eventual economic program a “series of improvisations.”

John Maynard Keynes himself met with Roosevelt in 1934. FDR was overwhelmed by what he called Keynes’ “rigmarole of figures.” And Keynes came away disheartened, remarking that he had “supposed the President was more literate, economically speaking.”

Hofstadter divides Roosevelt’s economic policy into two distinct ideological approaches. The first New Deal, enacted between 1933 and 1934, tried to spark a supply-side recovery by adopting “the retrogressive idea of recovery through scarcity,” Hofstadter writes. The key recovery efforts during these years were business-friendly initiatives to boost agricultural and business revenues. The Agricultural Adjustment Act, for instance, set farm quotas to withhold supply and boost agricultural prices. “[T]he policy seemed to have solved the paradox of hunger in the midst of plenty only by doing away with plenty,” Hofstadter laments.

The heart of Roosevelt’s initial economic program was the National Recovery Act, which allowed businesses to set price agreements and production quotas in exchange for wage increases and improved working conditions. This idea originated with the Chamber of Commerce. Still, Roosevelt called the NRA the “most important and far-reaching legislation ever enacted by the American Congress . . . a supreme effort to stabilize for all time the many factors which make for the prosperity of the nation.”

The NRA took a decidedly business-friendly approach to economic stimulus. “It is not unfair to say that in essence the NRA embodied the conception of many businessmen that recovery was to be sought through systematic monopolization, high prices, and low production,” Hofstadter writes. Yet it is far from clear that the NRA had a positive impact on the economic recovery—the economy’s best years came in the two years after the Supreme Court ruled the NRA unconstitutional.

Roosevelt’s first New Deal was conceived as a “true concert of interests,” as he put it on the campaign trail—a consensus approach to benefit business, farmers, and workers alike. “Although he had adopted many novel, perhaps risky expedients,” Hofstadter observed, “he had avoided vital disturbances to the interests.” Roosevelt refused calls to resolve the banking crisis by nationalization the country’s banks, for example, and instead relied on government to prop up the private banking system.

Roosevelt’s eventual populist shift was driven by venom from the right and pressure from the left. Conservatives and wealthy interests wielded vehement political opposition against Roosevelt. “His political struggle with the ‘economic royalists’ soon became intensely personal,” Hofstadter writes.

From the left, influential populist Louisiana Senator Huey Long was clamoring for a more radical economic program and making noise about challenging Roosevelt’s reelection in 1936. Roosevelt’s political operatives thought Long had enough political support to swing the election. Long was also advocating for a “Share Our Wealth” platform that would have capped annual incomes at $1 million to fund a $2,500 annual basic income; provided for an old-age pension and free kindergarten through college; and government-provided automobiles and washing machines for every family.

Roosevelt wished to do something “to steal Long’s thunder” during the latter half of his first term in the White House. “The result,” Hofstadter writes, “was a sharp and sudden turn toward the left, the beginning of the second New Deal.” Roosevelt latched on to the Wagner Act, which had been floating around Congress for some time, to create the National Labor Relations Board. And he even sought a drastic Long-style “wealth tax.” And of course, Roosevelt piggybacked on Long’s old-age pension idea to enact Social Security.

After winning reelection, Roosevelt executed an ill-advised and harmful pivot toward austerity in 1937. Believing the economy to be on better ground, government spending was cut, and the Federal Reserve raised interest rates. This mistake, Hofstadter writes, produced “a sharp downward trend [in the economy], which reached alarming dimensions in early 1938.”

Roosevelt eventually realized his mistake, and sought new government spending that spring, which Congress quickly approved. It was not until 1940, Hofstadter writes, that Roosevelt “finally accepted in theory what he had long been doing in fact, admitted the responsibility of government retrenchment for the recession, credited the revival of spending for the revival in business, and in general discussed the problem of the federal budget in Keynesian terms.”

By 1944, Roosevelt was speaking of a new “economic bill of rights” and guaranteed full employment within the confines of “our democratic system of private enterprise.” “With the economy operating at fall speed under war time conditions,” Hofstadter writes, “it was easy for him to forget the incompleteness of recovery under the New Deal and to refer proudly to the manner in which ‘we . . . fought our way out of the economic crisis.’”

Reading Hofstadter’s then-fresh history (published in 1948) of the Roosevelt administration holds wisdom from our own recent history. Hofstadter’s warts-and-all account of Roosevelt’s handling of Great Depression doesn’t look all that dissimilar from Barack Obama’s economic recovery efforts eighty years later. Obama too gravitated toward consensus reforms, opting for a stimulus package tilted toward tax cuts and money for the states. Obama too resisted calls for bank nationalization, promoting financial liquidity and stress tests instead. Obama favored stabilizing industry rather than bailing out individual homeowners.

Unlike Roosevelt, Obama did not enjoy a pliant Congress willing to cede economic deference to the White House and rubberstamp new recovery legislation. Roosevelt was able to experiment with a wide variety of programs with quick congressional approval—and was even able to course correct after his premature pivot to austerity.

Obama, on the other hand, never got a second bite at the apple for more stimulus because of a polarized Congress exhausted after one round of new government spending in 2009. Obama’s administration was too quick to pronounce economic triumph, seeing “green shoots” around every corner in 2009, with Treasury Security Timothy Geithner declaring “Welcome to the Recovery” in August 2010—years before most Americans felt anything resembling a return to economic normalcy. Obama too spoke of the need for Washington “belt-tightening” as early as April 2009, in the depths of the recession. Obama acceded elite Washington deficit scare mongering and pivoted toward austerity too early in 2011. When he tried to counteract the continuing sluggish economy by proposing a jobs bill in September, Congress never even considered it.

Which is to say that Obama was a fallible and imperfect progressive president—just like Roosevelt. Progressives routinely chastised Obama for falling short of hopes that he’d be the second coming of FDR. But as Jonathan Chait notes in Audacity, liberals have a penchant for perpetual disappointment and despair. Even in Roosevelt’s time, there was a contingent of the political left that incessantly criticized him for enacting policy that was too conservative.

Where Roosevelt differed from Obama was in the external leftward pressure he faced. Roosevelt faced real and imminent electoral pressure to move in a more progressive direction. For all the dismay with Obama from some progressives, the left never mobilized to become a political counterforce.

Since Obama’s administration, the American left has begun mobilizing. Bernie Sanders mounted an insurgent candidacy against Hillary Clinton, and extracted policy concessions that shifted Democratic economic policy decidedly to the left. Sanders remains the country’s most popular politician and a major force in the Democratic Party. And the Democratic Socialists of America have seen an upsurge in enrollment and activism since Donald Trump’s victory.

Hofstadter’s honest contemporaneous appraisal of Roosevelt’s administration avoids the sanctification that so many progressives are prone to when lionizing the Democratic Party’s most towering figure of the twentieth century. Roosevelt was a great progressive, but was hardly without missteps and oversights in his economic management, and was made better by a mobilized left.

The lesson of Hofstadter’s take on FDR is that progressives should not be discredited for failing to meet a standard of purity and perfection—and that those same progressives might benefit immensely from being challenged in the policy sphere from an engaged left.

A Massachusetts-sized thorn in Trump’s side

Donald Trump is eager to tear up the major pillars of Barack Obama’s legacy.  Stymied in Congress after the calamitous effort to repeal Obamacare, Trump is looking inward.  His administration would like to use executive orders and regulations to chip away at Obama’s accomplishments, chief among them environmental plans and healthcare reform.

But Trump’s ability to cause largescale damage is cabined and complex.  In fact, the administration may quickly find a single Supreme Court case foiling many of its plans.

Massachusetts v. EPA

The Clean Air Act is one of the United States’ strongest environmental laws.  It requires the head of the Environmental Protection Agency to regulate emission standards for “any air pollutant” that “contribute[s] to[ ] air pollution which may reasonably be anticipated to endanger public health or welfare.”

In 2003, the Bush administration EPA declined to regulate greenhouse gases.  Twelve states sued, arguing that the Clean Air Act compelled the EPA to regulate greenhouse gases in the face of the public threat of climate change.

In 2007, the Supreme Court ruled in favor of the states, deciding that greenhouse gases are an “air pollutant” under the Clean Air Act, and thus are subject to regulation by the EPA.  The Court also rejected the agency’s rationale for declining to regulate greenhouse gases, and ordered the agency to determine whether greenhouse gases endanger public health or welfare.

Importantly, the Court held that the statute compelled the EPA to at least make an endangerment finding: “EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.”  But the EPA had “refused to comply with this clear statutory command.”

This, the Court held, was essentially lawless behavior by the agency and the administration.  “[W]hile the President has broad authority in foreign affairs,” the Court held, “that authority does not extend to the refusal to execute domestic laws.”

The Supreme Court thus sent the issue back to the EPA to decide whether greenhouse gases endanger public health.  Following the 2008 election, the Obama administration EPA made precisely such a finding, which served as the basis for the administration’s Clean Power Plan and other greenhouse gas regulations.

How Massachusetts v. EPA gets in Trump’s way

Massachusetts v. EPA could prove to be a major thorn in Trump’s side.  First, it complicates his plan to roll back Obama’s climate change regulations.  While Trump is eager to reverse the Clean Power Plan and other EPA regulations, the agency will have to go through a full rulemaking procedure to come up with a replacement plan.  Because greenhouse gases pose a public danger, the EPA must regulate them—it cannot simply scrap a preexisting regulation it doesn’t like and replace it with nothing.

The only way around this is to reverse the Obama administration’s endangerment finding—that is, the Trump administration would have to go on the record asserting that greenhouse gases (and thus, climate change) pose no conceivable harm to public health.  Given the mountain of settled evidence to the contrary, the credibility of that position will be difficult to sustain in public, through agency notice and comment, or in court.

Outside of Trump’s environmental agenda, Massachusetts v. EPA may also pose difficulties on his efforts to undermine Obamacare.  Though legislative repeal efforts appear to be dead, Trump still believes the law is “exploding” (again, despite all evidence to the contrary).  There’s every reason to believe that he and his administration will look for ways to grease the wheels of that purported “explosion” by sabotaging the law through harmful executive actions and regulations.

Obamacare’s individual marketplaces remain in a precarious state.  Stung by uncertainty surrounding the fate of the law, and earlier successful efforts by congressional Republicans to sabotage it, more and more insurers are backing out of the markets or else jacking up rates.  So the individual marketplaces are highly sensitive to any more adverse actions by the White House.

As Sarah Kliff explains, insurers are closely watching certain policy decisions by the administration to determine whether they will participate in the marketplaces next year, and at what rates.  One of the biggest concerns for insurers is whether the administration will continue to enforce the individual mandate.  Without the mandate, insurers fear that healthy people would drop insurance, leaving companies insuring a mostly sick (and expensive) group of enrollees.  This prospect would lead to largescale insurer exits and high premium increases.

There has already been some indication that Trump’s administration will undermine the individual mandate.  On his first day in office, Trump issued an executive order that in part ordered Health and Human Services Secretary Tom Price to “waive, defer, grant exemptions from, or delay the implementation of any provision or requirement of the [ACA] that would impose a . . . cost, fee, tax, penalty, or regulatory burden on individuals [or] families[.]”

Many read this to be targeting the individual mandate, suggesting that the administration would not enforce the tax penalty for forgoing health insurance.  (The penalty is the greater of 2.5 percent of household income, or $695 per adult and $347.50 per minor child.)  Indeed, Trump adviser Kellyanne Conway outright told the press that the administration “may stop enforcing the individual mandate.”

But that seems to be prohibited by Massachusetts v. EPA’s admonition that the president has no authority to “refus[e] to execute domestic laws.”  The text of the Affordable Care Act is clear: individuals who don’t buy insurance must pay a penalty, and the administration must collect that penalty.  For someone who goes without insurance and does not qualify for an exemption, “there is hereby imposed on the taxpayer a penalty.”  This penalty “shall be assessed and collected,” and “shall be paid upon notice and demand” by the Secretary of Health and Human Services.

That doesn’t leave much, if any, wiggle room for the Trump administration to simply decline to enforce the mandate.  Sure, Secretary Price has the authority to expand hardship exemptions from the mandate, letting more people opt out without paying the penalty.  (One of many executive actions that the White House might attempt to undermine Obamacare.)  But it’s doubtful that Trump could outright decline to enforce the mandate altogether.  That would amount to an unlawful “refusal to execute domestic laws” under Massachusetts.

There are signs that the administration may begrudgingly realize this.  When Secretary Price testified before Congress, he criticized the mandate but conceded that “So long as the law is on the books, we at the department are obliged to uphold the law.”

It would be nice if the administration formally declared that it will enforce the mandate, so as to calm the nerves of frightened insurers.  But more likely, it will use that very uncertainty and ambiguity in its position to bootstrap premium hikes and destabilize the markets further—using the administration’s own inaction as evidence that Obamacare is exploding.

The Trump administration can do a lot of damage through its own executive rulemaking.  But the laws on the books and our political institutions constrain just how much damage it can do.  When it comes to abdicating the country’s climate change responsibilities and undercutting healthcare reform, Massachusetts v. EPA may prove to be a mightily pesky constraint for the administration.

TrumpCare dies another death

lucy-football

An action shot of the House’s latest attempt to repeal Obamacare

As if trapped in a time loop, Republicans yet again pulled their Obamacare repeal bill after—yet again—failing to come up with the votes to pass it out of the House:

“An 11th-hour White House push to give President Trump a major legislative victory in his first 100 days in office broke down late Thursday as House Republican leaders failed to round up enough votes for their bill to repeal the Affordable Care Act.”

There is no mystery here: no matter how much they try to tweak their bill, there is no congressional majority to eliminate Obamacare’s coverage gains.  There is no majority in the House, and certainly not in the Senate.

The relentless push to repeal Obamacare that became party dogma in opposition has deflated under the reckoning of governance.  The puritanical faction of Republican true-believers that would follow through on the bluster of opposition simply does not constitute the majority needed to pass laws.

That’s because the core question is whether government will backtrack from its commitment to ensuring decent, affordable healthcare for everyone.  Another way of putting it is whether government will abandon the principle that those with the misfortune of illness are not second-class citizens and are entitled to security in health and wellbeing just like everyone else.

Stripped of its wonkery (of which I am happy to indulge), that’s what this debate comes down to.  The House’s first repeal attempt fell apart because it would have buried the poor and sick with outrageous new costs and thrown them off their insurance.  Its newest attempt faltered because it would subject Obamacare’s protections for the sick to a veto by the states, segregating some people with costly illnesses into theoretically (but not really) separate-but-equal insurance pools.

Republicans have not yet mustered the blind political might to execute either act of cruelty.  Enough of their party has hesitated in the face of retreating from the government’s duty to protect the sick.  Indeed, reports suggest that as many as 50 House Republicans secretly do not want any part of Obamacare repeal.

Which is not to say that the so-called moderates are eager Obamacare supporters.  When Obama’s veto shielded them from political responsibility—that is, before the GOP was firing “live rounds”—House Republicans passed bill after bill repealing Obamacare.  This empty gesture amounted to a statement of the ideological preferences of the moderates—a philosophical opposition to the idea of government guaranteeing healthcare.

But reality has asserted itself now that Republicans are in the seat of power.  Obamacare’s endurance comes from its fundamental principle that healthcare is a right.  It shifted the baseline on how our healthcare system operates, and shifted political dynamics accordingly.  These new political dynamics are what the GOP willfully didn’t see coming—and what are now coming home to roost, eroding the legislative muscle behind rescinding Obama’s greatest achievement.

One must wonder what the whole point of this latest exercise in futility was.  Why go through the doomed charade of negotiations between the House Freedom Caucus and the Tuesday Group given the raw math facing repeal?  Was it to pin blame on the moderates?  On the Senate?  For Paul Ryan—who a month ago admitted that “Obamacare is the law of the land”— and the House leadership to pass the buck to the rest of their caucus?  To throw a Hail Mary attempt to give Donald Trump the semblance of an achievement within his first 100 days in office?

Probably some combination of the above.  But whatever it was, the bigger mystery is just how many times Republicans will fall on their face before coming to terms with their unthinkable: that Obamacare is here to stay.

Free college is a philosophical flashpoint for progressives

Governor Andrew Cuomo recently made New York the first state to offer free college tuition at public universities. But this impressive policy achievement is dividing liberals over whether the goal of progressive public policy should be to provide universal benefits to all, or to target benefits to the poor.

Cuomo’s program takes a modified universalist approach. His program—dubbed the “Excelsior Scholarship”—makes college tuition at the State University of New York campuses free for every student in a household earning less than $125,000.

Though seemingly good on its face, progressives have fretted over the wrinkles to Cuomo’s plan. First, it only zeroes out tuition, which is relatively modest for in-state students at public colleges, and doesn’t assist with daunting room and board costs. For instance, at my alma mater SUNY Geneseo, tuition is $6,470, but room, board, fees, and supplies run in excess of $17,000. Cuomo’s “free college” plan leaves students on the hook for the bulk of these total costs, which could deter many from taking advantage of it.

Second, Cuomo’s plan contains a punitive catch that students who benefit from the Excelsior Scholarship must work in New York for up to four years after graduation or else must repay the entire scholarship. This risk might deter students who can’t predict where they will wind up in four years. But it was the kind of provincial hook that may have been politically necessary to get the state legislature on board with the idea at all.

The bigger issue is that the structure of Cuomo’s program will provide little help to New York’s poorest students, and much more help to middle-class students. The Excelsior Scholarship is structured as a “last dollar” program, meaning it kicks in only after other sources of financial aid, like federal Pell Grants, are exhausted. Pell Grants help low-income students pay for college up to nearly $6,000 per year. That means a low-income Pell Grant recipient gains little to nothing from Cuomo’s free college program.

At the same time, students from families earning six figures get a massive windfall. They’ll each derive thousands of dollars in annual benefits by getting to attend school for free.

In actuality, Cuomo’s plan is a gap-filling policy, extending subsidized public college to the middle-class. Indeed, he expressly pitched his program as “Free-College for the Middle Class.” The program essentially functions as middle-class insurance against earning too much to qualify for Pell Grant assistance. As Mark Huelsman of Demos explains, “the new program when combined with federal grant aid ensures that middle-class families receive the exact same subsidy as working-class families.”

The distributive weight of Cuomo’s program—skewing away from the poor and toward the middle-class—has left many progressives fretting. The New York Times editorial board diminished the program as a “Free* College Plan” for only “one slice of the middle class,” noting that “even though the cost of room and board and books is what’s keeping many poor students out of college, the Excelsior Scholarship covers none of that.” Slate’s Jordan Weissman argued that cutting the poor out of the program’s benefits “somewhat undermines one of the big rationales behind making college tuition-free in the first place.”

The angst over Cuomo’s program is a miniature rekindling of the debate that flared throughout the 2016 Democratic presidential primary. Sen. Bernie Sanders proposed to make college free for everyone. Hillary Clinton criticized this plan as wastefully “paying to send Donald Trump’s kids to college.” Clinton instead guaranteed only debt-free college, meaning that those who could afford it would still have to pay their own way. (Toward the end of the Democratic primary, Clinton ultimately proposed free college for families earning below $125,000—the direct predecessor of Cuomo’s plan.)

Proponents of free college argue that higher education is a higher good that should be demonetized so as to be available to all. We let rich and poor alike attend K-12 schools for free, it’s thought, so college shouldn’t be treated any differently. Any regressive impact can be countered by levying progressive taxes on the wealthy. As the Roosevelt Institute’s Mike Konczal noted, “We don’t charge upper-income families more to ride the subway or visit a public park in order to ensure that these are public institutions available to all who have the ability and desire to participate in them.”

Critics argue that free college proposals squander resources by needlessly subsidizing the rich. The rich gain the most from free college because they tend to go to expensive schools. Free college also wipes away the sort of private progressive redistribution that exists in college financing today, where the tuition paid by wealthy students goes to subsidize the tuition waived for poorer students. Because wealthy students are the ones paying full tuition today, they’d get the largest windfall if college suddenly became free. New America’s Kevin Carey called Sanders’s free college plan “wasteful, unfair, and ultimately undermines the long-term interests of low-income students.”

There’s no right answer here, because this is ultimately a debate about values. And those values will dictate the future of American progressivism. Do progressives want an agenda that will create more universally shared public goods? That would divorce more essential goods and services from ability to pay, providing free access to rich and poor alike.

Or do progressives want to redistribute resources to provide assistance to those who need it most? This would target public spending toward the poor, cutting out wealthier Americans through means tests and income cutoffs.

That’s the deeper philosophical debate rankling progressives over New York’s new “free” college program. Cuomo took a side, building on federal aid to low-income students to make SUNY schools public goods universally available to all middle-class students. He has made his state a laboratory for one way of expanding affordable access to higher education. Progressives nationwide will have to decide if that’s the policy angle that they want to replicate.

Commonwealth Fund

I’ve been collaborating with the non-profit healthcare think tank The Commonwealth Fund to put together a series of brief explainers on various conservative health reform proposals.  These aim to provide the basics on the function, backstory, and impact of various health policy ideas.

The first of these explainers are available now; I’ll update this post as forthcoming explainers go live:

Are Medicaid work requirements legal?

Dylan Matthews has a good piece at Vox on the Trump administration’s zeal to require most people to work in order to receive health insurance benefits through Medicaid. Matthews notes that “[a] Medicaid work requirement would be a huge departure from current practice . . . [that’s] also likely to be ineffective, difficult to enforce, and maybe even illegal.”

It’s the last of these that I’d like to focus on: the possibility that work requirements might be illegal under the statutes governing Medicaid. Because work requirements don’t further Medicaid’s objective of extending healthcare to the poor, aren’t truly experimental, and would harm Medicaid recipients, there’s a good chance that work requirements for Medicaid are not lawful.

Here’s the background: Medicaid was created in 1965 as a little-noticed sidecar to Medicare in order to provide medical assistance to low-income people and other vulnerable populations. The law sets out certain “mandatory eligibility groups” that must be covered by state Medicaid programs, including low-income pregnant women and mothers, the blind, the disabled, and other medically needy groups.

The states and federal government partner to run Medicaid together: the federal government finances a sliding percentage of the program, and the states administer it. When Congress passed Obamacare in 2010, Medicaid eligibility was expanded to include everyone earning less than 133 percent of the federal poverty line; however, the Supreme Court ruled that this additional eligibility category was optional for the states.

States can request waivers from some of Medicaid’s requirements in order to conduct experiments and explore innovations in their programs. Section 1115 of the Social Security Act allows the Department of Health and Human Services to grant states waivers from the law’s requirements to conduct “any experimental, pilot, or demonstration project which, in the judgment of the Secretary, is likely to assist in promoting the objectives of [Medicaid].”

In the recent past, conservative states have requested waivers to require that all able-bodied adult Medicaid beneficiaries are either working, actively seeking employment, or are in school. The Obama administration routinely struck down requests from states like Pennsylvania to attach work requirements to Medicaid benefits—a red line that the administration would not depart from while negotiating with red states over the Medicaid expansion. The Obama administration took the position that work requirements would be a fundamental departure from Medicaid’s tradition as a safety net program for all, regardless of employment status.

The Trump administration is eager to reverse this policy. Seema Verma is Trump’s head of the Center for Medicare and Medicaid Services. Before that, she was a healthcare consultant working closely states like Kentucky and Indiana (under then Governor Mike Pence) to redesign Medicaid programs, often including work requirements.

In March, Verma and Health and Human Services Secretary Tom Price wrote a letter to state governors welcoming requests to tie Medicaid to employment status. “The best way to improve the long-term health of low-income Americans is to empower them with skills and employment,” the letter asserted, saying that the department was willing to “approve meritorious innovations that build on the human dignity that comes with training, employment and independence.”

The department will soon have that chance. Kentucky, Pennsylvania, and Indiana have all made requests with the Trump administration to impose work requirements on Medicaid eligibility. Arizona and Arkansas are expected to submit their own requests soon.

As much as Price and Verma would like to approve these requests for ideological reasons, it’s not clear that they have the legal authority to do so. A fresh new report from the Congressional Research Service looks at the issue of the legality of Medicaid work requirements under Section 1115 waivers. CRS concludes that the lawfulness of Medicaid work requirements is an open question. But there’s ample reason to think that any forthcoming approval from the Trump administration could be on shaky ground.

The administration’s decision granting or denying a Medicaid waiver can be reviewed and challenged in court to determine whether the decision was arbitrary or capricious. For waivers under Section 1115, courts primarily look at: whether the request is actually experimental; whether it “promot[es] the objectives of [Medicaid];” and whether administration officials thoroughly considered the goals of the waiver request, its impact on beneficiaries, and objections raised to the waiver.

Under this standard, a waiver to attach work requirements to Medicaid hardly looks like a sure thing. There are at least four reasons why:

1. Work requirements do not promote the objectives of Medicaid. The objective of Medicaid is to extend medical assistance to the needy. There’s no intuitive evidence that requiring people to hold gainful employment furthers this goal.

Indeed, the Obama administration believed that work requirements were completely unrelated to Medicaid’s goals. In a letter denying Arizona’s request for a waiver to implement Medicaid work requirements, the Obama administration concluded that work requirements “undermine access to care and do not support the objectives of the program.” To legally justify changing this position, the Trump administration will have to marshal evidence for a reversal.

Verma and Price articulate the goal of work requirements as promoting the “human dignity that comes with training, employment and independence.” But that’s way beyond the scope of the purpose of Medicaid. In fact, it’s much more aligned to the objectives of welfare programs like Temporary Aid to Needy Families and its predecessor, Aid to Families with Dependent Children.

If states want to experiment with conditioning safety net benefits on employment, they should seek waivers from TANF, not Medicaid. (And in fact, they’ve already done so.) Had Congress wanted Medicaid to be susceptible to these kinds of waivers, it would have incorporated some notion of work and independence into Medicaid’s objectives. Congress did not do so.

In fact, Congress very recently tried—and failed—to shoehorn employment into Medicaid. During the Republicans’ aborted attempt to pass the American Health Care Act to repeal and replace Obamacare, they introduced an amendment to permit work requirements in Medicaid. As CRS reports, “On March 21, 2017, a manager’s amendment to the AHCA was released which would additionally allow states to impose work requirements on non-disabled, non-elderly, non-pregnant individuals.”

AHCA made it out of committee, but was shelved because it could not secure enough support to pass the House. But the fact that Congress saw the need to amend the Medicaid statute strongly implies that the statute as presently constructed does not permit work requirements. The Supreme Court has said that there is a “general presumption” of statutory construction that “when Congress alters the words of a statute, it must intend to change the statute’s meaning.” If Medicaid as written already permitted state work requirements, then the proposed AHCA amendment would not have been necessary.

Of course, neither AHCA nor its amendment became law. The objectives of Medicaid on the books remain unchanged. And those objectives are not furthered by work requirements.

2. Work requirements violate Medicaid’s “mandatory eligibility groups.” As explained above, Medicaid’s statute lays out certain groups that must be covered by the states. Granting a Medicaid waiver for a state to implement work requirements would across many of these mandated groups.

This is most evident in states that have expanded Medicaid under Obamacare. The Medicaid expansion acts as a catch-all to insure everyone earning less than 133 percent of the poverty line, scooping up those low-income individuals not covered by one of the other mandatory eligibility groups. Work requirements are inconsistent with this part of the statute because they would deny coverage to those who are otherwise eligible but unemployed. Granting a work requirement waiver therefore cannot be squared with the text of the law.

3. Work requirements are not innovative or experimental. For years, states have sought and received waivers to institute work requirements for receipt of cash welfare benefits. And these experiments have not been effective at cutting poverty.

And while the Obama administration did deny state requests for mandatory work requirements for Medicaid, it did approve Pennsylvania’s 2014 request to implement voluntary work incentives in its Medicaid program. Similar requests for Medicaid are thus not truly experimental, as is required under Section 1115, because states have already had ample opportunity to study the effects of attaching work requirements to safety net benefits.

4. Work requirements are self-defeating and harmful to Medicaid recipients. The population of Medicaid recipients affected by work requirements is small. Nationwide, nearly 60 percent of all Medicaid recipients are already working. Among those who do not work, more than a third are ill or disabled; another 28 percent are caring for family; 18 percent are students; and 8 percent are retired.

The remainder could not find work or are not seeking work for other reasons. They account for just 4.5 percent of all Medicaid recipients.

But for this population, work requirements could be dire. Able-bodied unemployed individuals would be thrown off of their health insurance, causing them new difficulty to obtain medical treatment. This would be extremely detrimental to their health and wellbeing.

Moreover, work requirements may actually backfire—they likely hinder employment more than they promote it. That’s because Medicaid doesn’t discourage work. When Ohio expanded Medicaid, three quarters of unemployed enrollees said that having Medicaid coverage made it easier for them to find jobs.

*          *          *

Waivers for Medicaid work requirements are no legal slam-dunk. And it’s important for advocates and commentators to put this case before Health and Human Services. One of the factors that courts will consider is whether the Department considered and responded to the evidence in the administrative record. That means that Price and Verma must reckon with the shortfalls of work requirement waivers before going giving the green light to states.

That’s a green light that conservatives have long been eager to give. But in their quest to scold the poor, Medicaid work requirements might be more than the law can bear.

Obamacare’s veto problem—and how to fix it

Emboldened progressives have spent much of the last two weeks cheering Obamacare’s triumph over the Trumpcare repeal train-wreck. But meanwhile, a pair of developments have quietly highlighted the limitations of Obamacare as a framework for truly providing healthcare to everyone .

Obamacare has cut the ranks of the uninsured to historic lows on the strength of its private insurance marketplaces and its Medicaid expansion. But too many actors disinterested or outright hostile to the law’s goals have the power to get in the way of universal healthcare. Quite simply, Obamacare’s design has left it subject to too many vetoes.

First came the news that the major insurer Anthem is considering exiting Obamacare’s marketplaces.  Anthem’s exit, the latest in a string of high-profile departures, could be a particularly painful blow. In fourteen states, Anthem sells Blue Cross Blue Shield plans—historically the insurer of last resort on the individual market. Anthem is currently the sole insurer in nearly 300 counties, serving around 250,000 people. If Anthem quits Obamacare, people in parts of four states would be at risk of having no insurer willing to sell on the individual market.

Next came Kansas’s failed attempt to expand Medicaid. Kansas is one of nineteen states that have refused to take federal funding to expand Medicaid to people earning just above the poverty line. Last week, both houses of its state legislature voted to finally expand Medicaid. Yet arch-conservative governor Sam Brownback barely batted an eye before vetoing the bill on the spurious grounds that “The cost of expanding Medicaid under ObamaCare is irresponsible and unsustainable.”

The Kansas House of Representatives tried to override Brownback’s veto this week, but came up three votes short. As Vox’s Sarah Kliff observed, “65 percent of Kansas legislators support Medicaid expansion. But it failed because they needed two-thirds support to override Brownback[’s] veto.”

This leaves at least 56,000 Kansans ensnared in a coverage gap: too rich to qualify for Kansas’s Medicaid program, but too poor to qualify for subsidies on Obamacare’s marketplaces. And in Kansas, “too rich” means parents earning more than $7,760 per year—38 percent of the federal poverty line. (Forget about Medicaid if you’re a childless adult in Kansas—you don’t qualify, period.)

These two events—Anthem’s cold feet, and Brownback’s cold heart—get at the core vulnerabilities of Obamacare’s coverage expansion. Businesses get a veto over Obamacare if they don’t think they can make enough money participating in it. If too many insurers think that selling in a part of the country doesn’t make sense for their bottom lines, that region is written out of national health reform not by its democratically-elected representatives, but by private corporations.

On the other hand, states get a veto over Obamacare if their governors or legislatures have ideological misgivings about the law. Of course, Obamacare’s drafters never intended this—it was the Supreme Court that made Medicaid expansion optional. The Court’s decision made it easy for state-level conservatives to flex their hostility to Obamacare and to second-guess the budgeting decisions of Congress. So a determined conservative governor or legislature can blow a massive whole in Obamacare by turning down free federal money to provide insurance to the poor.

Neither veto is tenable for a durable system of universal healthcare. As I have written, a universal healthcare scheme cannot only depend on the business calculations of private corporations. Yet as presently constructed, healthcare officials have no way to guarantee offerings on the insurance marketplaces. The Obama administration routinely cajoled recalcitrant companies to sell in parts of the country in danger of too little competition—a last-ditch effort that the Trump administration will be in little rush to emulate while it waits for the law to “explode.”

Universal healthcare can’t just bet on insurers voluntarily selling plans in every part of the country. The number of counties with one or fewer insurers is projected to swell over the coming years. Insurers are eager to sell in states with high population densities like New York and California, but aren’t sure they can make money selling in rural states like Alaska. This has left health reform proponents marking their calendars for June 21. That’s the day by which insurers must decide whether they will sell plans on Obamacare’s marketplaces next year—and therefore the day we’ll find out how much of the country will be graced with universal healthcare.

That’s simply not sustainable. Instead of counting on private companies to provide universal healthcare, we should revive the public option as at least a fallback in states with too few insurance offerings. This was a good idea that embraced by both Democrats and moderate Republicans during Obamacare’s drafting, but was ultimately jettisoned. By the end of his presidency, Barack Obama himself was pushing for this reform. Obamacare needs a backstop—we cannot just settle for an insurance desert where companies refuse to sell. A public option would do the trick.

Then there’s Medicaid. Kansas’s inability to expand its program even in the face of supermajority political support is a sign that it’s time to harmonize and simplify control of Medicaid. Medicaid has long been a joint operation between the states and the federal government. The federal government provides much of the funding, but we have fifty different Medicaid programs across the country.

Instead of leaving healthcare for the poor at the mercy of state politics, we ought to simply let the federal government take the reins of the entire Medicaid program. This would guarantee coverage for all who qualify, regardless of the state they happen to live in. The states would be freed of a massive fiscal burden, and 50 different bureaucracies would be eliminated, letting the federal government better streamline cost control experiments.

And after federalizing Medicaid, we ought to expand it again to cover more people. Medicaid has been a tremendous success under Obamacare, and we should build on it further.

Though nonstarters in the current political environment, these steps are vitally necessary to strengthen universal affordable coverage in the United States over the long term. Obamacare has too many places where those driven by profit or ideology can hack away at the goal of universal healthcare. Eliminating these veto points is the next step in reaching the dream of healthcare for all.

The simple appeal of single-payer

Sarah Kliff reports at Vox on the surprising popularity of single-payer healthcare even among Trump voters. When she asked a group of Trump supporters in Harrisburg, Pennsylvania, whether they wished we had a single-payer system like Canada’s, “[h]alf of the hands shot up.”

In one sense, this shouldn’t be all that surprising. Though often written off as a fringe fantasy, single-payer healthcare consistently polls well, drawing support even among Republicans. There is an element of the idea that has universal appeal.

But yet, the popularity among conservative voters is curious.  Kliff says fairness and consistency are two key draws of single-payer.   “The voters I’ve interviewed like the idea of everybody getting equal treatment, no matter where they live or how much they earn,” she reports.

That’s undoubtedly part of it. But I suspect something even more basic and practical accounts for single-payer’s enduring appeal. And that, simply, is its simplicity. People want out of the exhausting bureaucracy and byzantine complexity that is the American healthcare system. Our system is a confounding ad hoc kludge-on-kludge concoction of a public-private partnership layered on top of public programs grafted on to a tax-preferred fringe benefit.

When it comes to reform, relief from uninsurance and rising costs is just the beginning. People also want deeper relief from the sheer taxing ordeal of American healthcare: the churn between fragmented programs, the stress of navigating provider networks, the uphill futility of doing battle with insurance companies. When people look to government to reform healthcare, they aren’t just looking for help financing it—they want government to take on the stress and headache of navigating the entire system. Government should be a healthcare agent, not just a benefactor.

We often think about the size of government as a philosophical and horizontal continuum: how much space is government occupying? How much private industry is it regulating or displacing? But the individual experience may be much different. Individual Americans experience big government in a much more practical, vertical sense: how deeply are government systems imposing on my life for the worse? What costs—through taxation of either my income or my time and mental bandwidth—are government programs assessing me?

For most people, single-payer healthcare doesn’t inherently offend these anti-big government sentiments. Government absorbing the insurance system would ultimately streamline the healthcare financing experience for patients. The administration of healthcare financing would be synergized down to a single point: the federal government. That makes things a whole lot simpler for patients.

And because everyone would draw benefits from single-payer, they wouldn’t necessarily resent government spending on healthcare as a giveaway to someone else. For instance, Medicare enrollees, having paid in to the system over their lifetimes, want to “keep your government hands off my Medicare.” Because they have paid taxes in exchange for clear and visible benefits, Medicare beneficiaries don’t experience government-run health insurance as “big government.” Neither would enrollees covered by a broader single-payer system.

Strangely enough, it’s possible for individuals to experience a centrist program like Obamacare as “big government” in a way that they might not experience a typically left-wing program like single-payer. Obamacare provided much-needed relief on the basics of health insurance by guaranteeing access to it and subsidizing the cost. But it has done little to ease broader stresses endemic to our healthcare system. Indeed, Obamacare adds more complexity, with means-tested benefits for private insurance for some, and expanded public insurance for others. Either way, it’s a government program that requires consumers to make complex choices, figure out their own eligibility, and weigh different networks, premiums, and deductibles against each other.

The appeal of single-payer as the next order of health reform is that it would lift this burden off the individual. Single-payer would certainly be highly disruptive (perhaps existentially) for industry stakeholders. But for the day-to-day lives of actual people, it would be liberating.

Of course, our politics is skewed to avoid “big government” as business and industry experience it. My own suspicion is that, regardless of the theoretical benefits of single-payer (of which there are many), we are too far down the road of our own ramshackle system to tear it up and start over wholesale. Those with a stake in the current system would undoubtedly mobilize to defeat single-payer—especially once it comes time to dole out the massive tax increases needed to pay for it.

Where single-payer becomes possible, however, is in a crisis. And Republicans are courting just such a disaster by working to sabotage Obamacare. As David Leonhardt of the New York Times puts it, “if voters like government-provided health care and Republicans are going to undermine private markets, what should Democrats do? When they are next in charge, they should expand government health care.”

But even if single-payer comes to naught in the United States, the source of its appeal should guide the future of our public policy. Twenty-first century life imposes too many burdens and complexities on people. Maybe they just want government to lift some off of their backs.