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.

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.

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:

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.

Obamacare’s tenth life

This post is cross-posted at Medium.

Back in January, I recounted the Affordable Care Act’s many trials and tribulations in anticipation of what was poised to be its toughest battle yet. From Scott Brown cracking the Democrats’ filibuster-proof Senate majority in 2010, to John Roberts turning gun-shy before obliterating the individual mandate, through Ted Cruz’s government shutdown, Obamacare had more than its share of close calls.

Yet the law defied death again and again. “[F]or eight years, center-left health reform has prevailed against constant slings and arrows because its moral foundations are strong,” I wrote at the time. “Obamacare’s tendency to survive may just be what spares it again.”

And survive again it has. Trumpcare is dead, and Obamacare is alive. The GOP’s seven-plus year charge of repeal and replace went down in flames on Friday, having barely even made it out of the starting gate. And when it comes to the core of Obamacare, Republicans hardly even put up a fight.

That’s because the GOP long ago gave up on contesting the basic moral foundation of Obamacare: the notion that everyone is entitled to healthcare as a right. It was a quiet concession, drowned out by years of chest-thumping cries to repeal Obamacare, but the right implicitly acquiesced to Obamacare’s new normal years ago. That, more than anything, doomed the effort to repeal it.

Republicans tried to resist the moral force of universal healthcare by tarring it as “socialized medicine” and a government takeover of health insurance. But since Obamacare began delivering real benefits to real people, the center of gravity within Republican opposition shifted toward a more practical, less ideological critique about high premiums and inadequate coverage. Underneath the howls for repeal, the conservative objection increasingly moved from universal healthcare itself to the outcomes and mechanisms Obamacare employed to approximate it.

Donald Trump formalized this concession. Just days after his election, he announced that he intended to keep Obamacare’s popular guarantee of coverage for people with pre-existing conditions. Even earlier, Paul Ryan’s “Better Way” proposal agreed to preserve this protection, too. But to insure the sick, you must also insure the healthy — insurance markets cannot function any other way. And when it comes to universal healthcare, insuring both the sick and healthy is more or less the whole ballgame.

To keep protections for the sick in place, the Republicans would have to produce a plan that looked a lot like Obamacare. Under this constraint, the only way to differentiate it — and thus the only way to realistically claim to “repeal” Obamacare — would be to design a version of the law that was meaner, stinger, and outright worse.

That’s ultimately just what the GOP did, but only after abandoning their first strategy: so-called “repeal and delay.” This plan — to give Republicans the political catharsis of an immediate Obamacare repeal vote, but delaying the effective date of repeal for several years — implicitly conceded two important points: First, that it was unjust and untenable to simply repeal and toss people off of their healthcare. And second, that Republicans had no idea how to actually replace the law.

After it became clear that repeal and delay too would cause chaos on insurance markets, that half-baked plan was scrapped once enough leading Republicans (Trump included) clamored for simultaneous repeal and replace. And that course correction produced the monstrosity that was the American Health Care Act.

The bill was a horribly constructed, unloved mess from the day Ryan announced it from behind his smirk. But it was really its Congressional Budget Office score that did it in, for the CBO confirmed what everyone suspected: that AHCA grossly offended the prevailing moral principle of universal healthcare. In pursuit of that principle, Obamacare had normalized a baseline of widespread and affordable coverage. AHCA did immense violence to each of these, threatening to throw 24 million people off their insurance and jack up rates on millions more of the oldest and more vulnerable Americans.

With that, it was only a matter of time before AHCA collapsed in a heap. There were other factors, of course: The Republican Party was in a defensive crouch from the get go, and couldn’t coalesce around a replacement plan. A public enraged by the elevation of Donald Trump to the presidency and terrified of the threat to life and limb posed by repeal galvanized to mount a fierce resistance. But the common thread through all of them was the potent moral force of universal healthcare.

Granted, Obamacare hasn’t yet achieved the goal of universal coverage. But it made a major down payment toward that goal, lowering uninsured rates to historic lows. With the failure of AHCA, the country is refusing to turn back from those gains.

So for the second consecutive Republican presidency, grand conservative designs to gut a pillar of the welfare state have crumbled. When George W. Bush decided to spend his second-term political capital privatizing Social Security, his plan made it through the summer before being pronounced dead. What is remarkable about Obamacare repeal is that it fell apart so fast.

But like Social Security reform, AHCA crumbled under the weight of poor policy design, Republican factionalism, and public resistance. Call it loss aversion, status quo bias, third-rail entitlements — the welfare state has demonstrated an impressive staying power.

And it all comes back to the foundational moral basis for government forging ahead to better people’s lives and provide a sense of security. That’s the brick wall that Ryan’s now-aborted “rescue mission” ran into headlong. Universal healthcare is right and just, and that’s why Obamacare has survived yet again — and perhaps for good.

Stalemate-and-delay: the future of the Obamacare fight?

The fight over Obamacare is poised to dominate much of President Trump’s first year in office.  Republicans are dead set on following through on years of political attacks against the law.  Democrats are equally adamant about saving President Obama’s signature achievement and the millions insured under it.

The problem is that congressional Republicans look increasingly unprepared to follow through on their rhetoric about replacing the law.  Yet they and the Trump administration is convinced the law is failing.  This leaves the GOP in a real bind.

But there may be a way out.  When it comes to Obamacare, the best outcome for everyone may be a stalemate.

As a basic matter of math, Republicans need Democratic support to replace Obamacare.  They could repeal the law with a bare majority in the Senate, but will need eight Democrats to go against the party and overcome a filibuster to enact a replacement.  Republican leadership, including Trump and House speaker Paul Ryan, has backtracked from the repeal-and-delay misfire, and has since come to promise that repeal and replacement will occur near simultaneously.  That requires Democratic votes.

The core question for Trump and the GOP is how to get them.  Trump believes that he is negotiating from a position of ever-increasing strength.  He thinks the law will crumble on its own, even telling congressional Republicans gathered in Philadelphia that he had thought about “doing nothing [on healthcare] for two years, and the Dems would come begging to do something” after “catastrophic” price increases.  Ryan has the same forecast for the law, repeatedly (and falsely) asserting that Obamacare’s individual marketplaces are in a “death spiral.”

Trump has hinted at this scenario before.  Earlier in January, Trump tweeted that the GOP needed to “be careful” about repealing Obamacare, because Democrats would be to blame when the law “fall[s] under its own weight.”  There is clearly a side of Trump that sees political advantage to continuing to hang Obamacare around the necks of Democrats—a side of him that splits from Republican leadership in Congress on the immediate urgency to erase the law from the books.  By sitting back and waiting, Trump suspects he could get a better deal.

Democrats, on the other hand, are confident that Obamacare is succeeding.  They point to the 20 million people insured under the law and signs that its marketplaces have stabilized.  Democrats are determined to resist GOP repeal efforts, and are increasingly drifting toward a strategy of all-out opposition to Trump across the board.

From the Democrats’ perspective, there’s no reason to disabuse Trump of his notion that Obamacare is a ticking time bomb with their names attached to it.  Suppose Democrats stick together as a uniform bloc in opposition to repeal and replace.  A frustrated Trump might see the Democrats as “ungrateful” for the GOP’s efforts to save them from their supposed healthcare mess.  Trump might then decide to wait until carnage from Obamacare’s “collapse” starts to hit in order to exact a better deal out of desperate Democrats at that time.

For Democrats, this result keeps Obamacare on the books, delaying the repeal fight until a day when Trump may be on even weaker ground in public approval, and a day that is that much closer to the 2018 midterm elections.  At that point, Democrats could spark a wave election to take back the House or Senate, stopping Trump’s agenda altogether.

But stalemate-and-delay makes sense for Republicans, too.  If Trump gets fed up with congressional gridlock over healthcare and with how much of his first year in office the issue has consumed, he may want to shelve repeal—especially if he expects to pin down the Democrats into agreeing to more favorable terms down the road.  But would the repeal-obsessed GOP Congress go along with this?  Almost certainly.  Trump owns the GOP now, and the party will largely do as he says.  If Trump says build a border wall, Ryan asks how high (while writing a $15 billion check, to boot).  There’s no reason to think the party would subvert him if he tired of the Obamacare battle.

Trump and other leaders take the position that even though they could wait and let the law implode on its own, they have a duty to come to the rescue of those suffering under the tyranny of Obamacare.  By postponing the repeal push, Republicans get to blast obstructionist Democrats for perpetuating the hellish suffering inflicted on the American people under Obamacare.

This relocates the Obamacare debate back into the Republicans’ comfort zone.  Republicans are most at ease using healthcare as a political piñata against Democrats.  But now that they have the power to decimate Obamacare, they have no plausible plan to put the piñata back together again.  At the GOP’s Philadelphia retreat this week, one member of Congress said that the party’s leaders have offered “zero specifics” on an Obamacare replacement so far.  A leaked recording of that retreat shows Republican members of Congress ill at ease with the party leadership’s lack of strategy and clarity on healthcare.

So for Republicans in Congress, postponing repeal buys more time to devise a replacement plan, while allowing them to continue to use Obamacare as a political battering ram to rally their base going into the 2018 midterms.  Even though they’ve spent seven years railing against the law, Obamacare repeal is a fight that the GOP is not ready for.  Republicans are animated by political opposition to Obamacare as an avatar for big government liberalism.  But they still aren’t equipped or prepared to translate that political opposition into policy language.  Stalemate-and-delay allows them to reap the benefits of the former while avoiding the embarrassment of the latter.

Conversely, it also avoids Republicans taking ownership over the country’s healthcare system going into those elections—something many in the party are loath to do.  “We’d better be sure that we’re prepared to live with the market we’ve created” with repeal, said Rep. Tom McClintock of California.  “That’s going to be called Trumpcare. Republicans will own that lock, stock and barrel, and we’ll be judged in the election less than two years away.”

There are risks in this gambit for Democrats, but those risks are tolerable.  The key is for Democrats to stick together in total opposition to GOP repeal efforts.  And they will be sticking together to defend a wounded healthcare law—one that the Trump administration will weaken to the fullest extent of its executive authority.  Trump already issued an executive order instructing his administration to relax enforcement of the law “to the maximum extent permitted by law.”  White House adviser Kellyanne Conway even suggested the administration may refuse to enforce the law’s controversial individual mandate.  And Trump also canceled planned advertising for the law’s individual marketplace plans in the final days of open enrollment in an apparent attempt to reduce sign-ups.  These are all attempts to loosen the screws on Obamacare’s three-legged stool.

But these risks were always going to be the case under a Republican administration.  Republican sabotage was inevitable, but it beats wiping the law off the books entirely.

So perhaps Obamacare’s future looks much like its past: a political lightning rod perpetually on the chopping block, but never actually chopped.  Trump can rationalize stalemate-and-delay as standing pat until a later day when he can bend Democrats to his will.  Republicans can keep rallying their base on the promise of repeal were it not for those obstructionist, big government Democrats.  And Democrats can appeal to their base having successfully fought Trump and continuing to stand up to Republicans intent on gutting Obama’s signature achievement.

And that might be Obamacare’s political sweet spot.  Democrats want to save Obamacare, and Republicans need an off-ramp from repeal.  For both parties to win, the solution might just be to stalemate.

The case for federalizing Medicaid

If Donald Trump ever moves on from bickering over the size of his inauguration crowd to actually governing, one of the first orders of business will be churning out a promised “terrific” Obamacare replacement plan. While we don’t yet know the exact details of Trumpcare, Trump adviser Kellyanne Conway confirmed this week that block granting the Medicaid program to the states will be a big part of it.

This isn’t a surprise. Republicans like Speaker Paul Ryan and health secretary nominee Rep. Tom Price have called for kicking Medicaid down to the states for years. Unfortunately, it’s the exact wrong direction we should be going toward.

Medicaid provides health insurance to nearly one hundred million people, including children, pregnant women, nursing home residents, people with disabilities, and low-income Americans. For over fifty years, the program has been managed jointly by the federal government and the states. Washington finances at least half of the program’s costs, and often substantially more in poorer states. Obamacare expanded Medicaid to cover those just above the poverty line, and even offered to pick up the entire tab for the first years of the expansion. Still, nineteen conservative-led states turned down free money, causing a Medicaid “coverage gap” currently ensnaring 2.5 million people that would have otherwise gained insurance.

Conservatives in Washington want to drastically change this arrangement by simply cutting a check to the states and letting them run Medicaid. Conservatives like this idea for a few reasons. For one, a block grant creates more predictable (and lower) costs for the federal government. It gets the federal government off the hook for covering a share of whatever costs program enrollees incur, and instead just subsidizes state Medicaid programs. A block grant transfers most of the commitment of insuring vulnerable populations from the federal government to the states.

The problem, of course, is that this is a barely-concealed way of cutting healthcare funding for the poor. The only way for block grants to save the federal government money is to systematically lowball the amount of the grant. For example, the block grant plan pushed by Price and other House Republicans would slash Medicaid spending by $1 trillion — nearly 25 percent — over the next decade. A similar plan offered by Paul Ryan in 2012 would have caused up to 20 million Americans to lose their coverage.

This leaves it to individual states to pick up the slack, but it’s far from guaranteed that they are willing or able to do so. Medicaid is already one of the costliest expenditures for states, consuming on average nearly 20 percent of their budgets (second only to K-12 education). Making up for a $1 trillion funding gap would be a stretch even during relatively good economic times. But during a recession, block granting would be a disaster. While the federal government can take on debt to finance deficit spending, almost every state is required to keep a balanced budget. When revenues dry up during a downturn, states take an axe to social spending to make up the difference. These cuts inevitably come disproportionately from low-income programs. So the end result of block-granting means Medicaid will get cut to the bone just when more and more people will need it.

Block-grant proponents want to give states more of a role to experiment with Medicaid. But just as some states may seize on new flexibility to experiment upward with better, more generous programs, others will ratchet Medicaid downward by providing stingier benefits. Those nineteen states refusing the federal Medicaid expansion in particular have political cultures deeply hostile to insuring the needy. In Texas, for example, childless adults are ineligible for Medicaid regardless of how poor they are, and even parents are “too rich” for coverage if they earn more than 18 percent of the poverty line — $2,118 a year.

Even though national Republicans package Medicaid block granting as an exercise in states’ rights, it’s not clear how many states want the privilege of taking the primary lead in running Medicaid. Even some Republican governors worry that block grants will reduce the effectiveness of their safety nets. Medicaid block grants could easily follow the pattern of welfare reform — another safety net program devolved to the states during years of economic growth that has since shriveled away due to chronic underfunding.

Instead of block-granting Medicaid to the states, a better course is to do the exact opposite: have the federal government assume full responsibility for Medicaid. This would eliminate harsh state-based eligibility restrictions like in Texas, and would guarantee coverage for all who qualify. Because the federal government can run budget deficits, it is better situated to protect the program during economic downturns. And federalizing Medicaid would relieve the states of a massive fiscal burden, freeing up money for education, infrastructure, tax cuts, and other state projects.

Putting Medicaid entirely in the hands of the federal government may also better tame the program’s costs. As Greg Anrig of the Century Foundations writes, “taking 50 separate state bureaucracies out of the picture would be a meaningful step in the direction of reducing confusion and wastefulness.” Congress and federal agencies would also be better able to experiment with cost-containment strategies without the states in the mix.

Federalizing Medicaid could also yield tax relief for low- and middle-income Americans. While new federal revenues would need to be raised, the states would be free to cut taxes. And because the federal tax code is more progressive than the states’, most of the new financing for Medicaid would come from the wealthy. The net result would likely mean lower taxes for most Americans.

Federalization is not a new idea, nor a partisan one. As Anrig points out, Ronald Reagan proposed federalizing Medicaid in 1982 in exchange for giving the states over other safety net programs. Even earlier, in 1979 Jimmy Carter proposed federalizing Medicaid as part of his health reform pitch.

On the campaign trail, Donald Trump promised that he would not cut Medicaid. That’s a promise he cannot keep while also block-granting the program. Instead of pawning Medicaid off on the states, the federal government should lift it off of their shoulders entirely. That would give the states real flexibility.

Note: This post is cross-posted at Medium.

A Red State Option on Steroids for Obamacare

The Affordable Care Act came under existential attack the minute it was signed into law.  Almost immediately, a slew of Republican state attorneys general rushed to the court house to have the law struck down on the grounds that its individual mandate to purchase insurance was unconstitutional.  Less noticed but just as consequential was a sidecar challenge to the law’s mandatory Medicaid expansion, arguing that it violated states’ rights.

When the case (known as NFIB v. Sebelius) reached the Supreme Court, it split the polarized justices.  Four conservatives were ready to toss out the law entirely, four liberals were bent on saving it.  In an apparent tacit compromise, Chief Justice Roberts agreed to provide the fifth vote to uphold the mandate as a tax, while liberal Justices Breyer and Kagan joined the majority in striking down the mandatory Medicaid expansion.

This was hailed as a victory for Obamacare, but the under-noticed Medicaid ruling has had dire consequences.  The Court’s decision opened up a “Red State Option,” and nineteen conservative-led states have opted not to expand their Medicaid programs to cover the near poor, ostensibly out of sheer partisan spite.  This has blocked 2.5 million people from obtaining insurance.

I point this out because a pair of Republican senators are proposing a large-scale version of the Supreme Court’s compromise today.  In order to replace Obamacare, Sens. Susan Collins of Maine and Bill Cassidy of Louisiana would create a sort of Red State Option on Steroids, allowing states to opt out of Obamacare entirely if they so choose.  As Vox’s Sarah Kliff explains:

The Patient Freedom Act would, as described by Sens. Cassidy and Collins, give states three options:

  1. Continue to run the Affordable Care Act as is without any changes
  2. Switch to a different health insurance expansion that emphasizes auto-enrolling all uninsured residents into a federally subsidized catastrophic plan
  3. Offer no coverage expansion at all, and the state would lose the money it currently receives for insurance subsidies and Medicaid expansion

Under Option 1 (let’s call it the “Blue State Option”), progressive states such as California and New York that like Obamacare can keep it.  Or at least, they can keep most of it—Cassidy-Collins would impose a 5 percent cut on subsidy payments to Obamacare enrollees.

Under Option 2 (the “Red State Super-Option”), conservative states like Texas and Kansas can ditch Obamacare entirely and opt into a not-yet-fleshed-out conservative replacement plan.  Cassidy and Collins haven’t yet fully formed what this replacement looks like, but it will involve auto-enrollment of the uninsured into high-deductible catastrophic insurance plans attached to health savings accounts.  The money that would have been spent on Obamacare subsidies in these states will be redistributed into these HSAs based on each individual’s age, rather than income.

Option 2 will tend to disadvantage low-income individuals, because it abandons Obamacare’s means-tested subsidies.  And it also undercuts the GOP’s current main objection to Obamacare: its high out-of-pocket costs.  With high-deductible plans, enrollees aren’t really insured at all until they first rack up thousands of dollars in medical expenses, and must self-fund everything else with their own savings.  This will aggravate healthcare-induced financial strain, not alleviate it.  For that reason, HSAs tend to be virtually useless to all except the wealthy.  Even so, Option 2 is a revealing look at the true conservative impulse of what right-leaning health reform would look like.

Option 3 is essentially a State of Anarchy Option.  As health economist Aaron Carroll says, “I have no idea why any state would choose [this option].”  This option would appeal only to states looking to mindlessly blow up the healthcare coverage expansion (there may be some…), but would otherwise seem to solely exist to prod states toward choosing one of the other two options so as not to lose federal money.

Under all three options, the ACA’s taxes are left in place—a concession sure to rankle congressional Republicans.  Annual and lifetime limits will stay, too, as will the ability of children to stay on their parents’ insurance until turning 26, and the prohibition on insurers excluding patients with preexisting conditions.

The Cassidy-Collins plan is plainly meant as an attempt to craft a bipartisan way out of the Obamacare repeal fight.  Republicans need eight Democratic votes to enact any replacement plan, and Sens. Cassidy and Collins hope that Democrats might settle for kicking the Obamacare decision down to the states.

For Democrats, the only reason to support this idea is because saving Obamacare in blue states is better than not saving it at all.  It’s a sort of second-best option that at least protects individuals in Democratic-led states.

But Cassidy-Collins will also amplify healthcare polarization from state to state.  The Medicaid expansion has already shown that some states will almost certainly not make this decision based on legitimate policy considerations around how best to expand health insurance.  The issue of healthcare has become too partisan, with the ACA serving as an avatar for anti-Obama resistance.  Perhaps that resistance will finally defuse now that Obama has left office, but Cassidy-Collins certainly gives the states the opening to widen the geographic gulf in our healthcare system.

And of course, the most vulnerable will be the ones who suffer.  As Topher Spiro of the Center for American Progress writes, “It’s unconscionable that access to quality health care would depend on where you happen to live.”  Cassidy-Collins puts the decision about who deserves health coverage in the hands of state elected officials, who are disproportionately conservative Republicans skeptical of universal healthcare in much of the country.

Perhaps the most significant outcome of Cassidy-Collins is that it signals that there is a cohort of Republican senators who are serious about committing to a replacement plan before killing Obamacare altogether.  Collins has already said that Republicans must have at least a “detailed framework” for a replacement before repealing the law.  Her vote is one that Republicans need in order to move in any direction on healthcare.

But Cassidy-Collins is also telling in other ways.  By punting the repeal fight to the states and presenting them with a menu of healthcare options, the proposal creates a sort of Choose-Your-Own-Adventure Federalism.  In a country growing increasingly divided by politics, Cassidy-Collins embraces polarization in policy.

Contrary to Obama’s 2004 convention speech, there clearly are Red States and Blue States when it comes to health policy.  Federal health policy ought to serve as a floor to guarantee certain rights and benefits regardless of state politics.  But the so-called “compromise” bill in the Senate would abscond from that duty and instead only heighten our political divide.  Whether or not it is a tenable compromise, the fact that such an outcome is viewed as a plausible off-ramp speaks volumes about the state of our politics.

How Obamacare repeal sets the table for the entire GOP agenda

President-elect Donald Trump and his Republican allies in Congress are ready to press ahead with Obamacare repeal come January.  The effects of repeal will be devastating enough.  But repeal also triggers problems that help the GOP justify the rest of its agenda.  By repealing Obamacare, Paul Ryan and company will try to bootstrap in drastic changes across government in the name of reducing deficits and stabilizing federal programs like Medicare.

Republican plans to repeal Obamacare would exact a massive human toll.  Repeal could throw upwards of 30 million people off of their health insurance, doubling the current uninsured rate.  And if Republicans gut the law’s protections for those with pre-existing conditions, 52 million people would struggle to find affordable insurance.

The human carnage of repeal is meant to coerce Democrats into going along with a right-wing replacement bill.  Republicans will have 52 votes in the Senate in 2017.  They can repeal most of Obamacare with 51 votes for a reconciliation bill.  But to enact new legislation replacing the law, they’ll need eight Democratic votes to overcome a filibuster.  The thinking is that creating an Obamacare cliff with massive human disaster on the other side will compel cooperation from Democrats.

Never mind whether this scheme can actually work without provoking a stampede of insurers out of Obamacare’s marketplaces during the transition period leading up to the cliff.  Like the hostage-taking expeditions during the Obama administration—the debt ceiling fiasco, the fiscal cliff, the government shutdown—this is another instance of the GOP manufacturing a crisis in order to strong-arm its policy priorities through Congress.

Conveniently for Republicans, Obamacare repeal opens the door to far more of the conservative agenda than just upending the individual insurance market.  According to a new report from the Brookings Institute, repeal would also jeopardize the solvency of Medicare.  Obamacare included a 0.9 percent payroll tax on incomes above $200,000 to help shore up Medicare’s finances.  This extended the solvency of the program’s trust fund until at least 2028.  Without this tax, Medicare could go broke in less than eight years.

It’s impossible to imagine conservatives restoring any of Obamacare’s taxes on the wealthy.  (Indeed, cutting these taxes is part of the appeal of Obamacare repeal for Republicans.)  And by repealing the law, Republicans also drag Medicare closer to crisis.  It’s easy to picture Ryan and others seizing the opportunity to warn that Medicare cannot be sustained without drastic changes along conservative lines–the type of reform Ryan has spent years pursuing.  The conservative vision would terminate our commitment to Medicare as a government-run insurance plan, and replace it with a voucher payment to seniors to shop on their own for private insurance plans.

So by repealing Obamacare, Republicans worsen Medicare’s financial position and thereby tee up the case for privatization.  But that’s not all.  The passage of Obamacare has corresponded with a marked slowdown in the growth of healthcare costs over the last several years.  The U.S. is currently on pace to spend $2.6 trillion less on healthcare than we expected before Obamacare was passed.  It’s difficult to assess how much Obamacare contributed to these savings, but it undoubtedly played a part.

If this slowdown is reversed by repeal, and healthcare costs begin to balloon again, the GOP could well use it as an excuse to pass the rest of its radical policy prescription across the entire gamut of American insurance options.  These reforms range from block-granting Medicaid to capping the tax exclusion for employer-provided insurance to promoting higher deductibles for more people.

Repeal could even give Republicans space to shoehorn in their desired policies outside of healthcare.  The Brookings report also found that Obamacare repeal will worsen long-term deficits.  Republicans will also undoubtedly pursue massive tax cuts near simultaneously with Obamacare repeal.  This combination will cause deficits to explode.  And as the Congressional Budget Office begins projecting larger and larger deficits, Republicans will have a ready-made excuse to justify austerity politics and massive cuts to safety net programs and other domestic spending.

We’ve seen this story before: the GOP leverages a crisis of its own making to push through its chosen policy prescriptions.  Even with a congressional majority, Republicans won’t be able to quit governing through crisis mode.  Their policy agenda will be painful for millions of Americans, and deeply unpopular because of it.  Republicans need a pretext to bolster the political necessity for making sweeping changes to our safety net.  Repealing Obamacare unlocks a whole host of rationales to help the GOP do precisely that.

But this also allows Democrats and other Obamacare defenders to lay out the full stakes of repeal.  Obamacare repeal doesn’t just rob insurance from the millions who have gained coverage under the law.  Repeal also jeopardizes the financial sustainability of Medicare for future retirees.  Repeal threatens to ignite higher healthcare inflation, raising premiums and eroding employees’ take-home pay.  Repeal erodes the financial standing of a whole host of programs for low-income Americans that are vulnerable to arbitrary budget cuts.  The implications of repeal are simply massive.

By repealing Obamacare, the GOP is trying to tee up its entire legislative agenda.  Liberals have an obligation to shout from the mountaintops about the full harm of this conservative exercise in bootstrapping.