In the wake of Louisiana governor John Bel Edwards’ announcement last week that his state would expand Medicaid under ObamaCare, the White House rolled out a new scheme to persuade the 19 states that are still holding out to fall into line and expand their programs: throw more money at them.
But these state officials should resist the temptation, for at least three reasons:
- First and most obvious is that expansion states have all experienced the same thing: More people signed up than expected, and it blew a hole in the states’ budgets.
- The second reason is that there’s no such thing as “free” federal dollars. The money comes with conditions, which effectively shifts policymaking from the receiving state’s legislature and governor to a distant federal bureaucracy (in this case, the Centers for Medicare & Medicaid Services), which dictates how states must spend federal Medicaid funds.
- The third reason is less abstract: Medicaid will harm those it’s meant to help. Often lost in the expansion debate is that Medicaid is the worst form of health coverage in the country.
Moving to single-payer in the U.S. would require massive new taxes that would stifle growth, and consolidating all power over the health system in the federal government would lead, in time, to second-rate health care for many millions of people. Democrats praise Medicare’s simplicity, but giving the Medicare bureaucracy the power to set prices for all medical services in the U.S. would lead to the misallocation of billions of dollars.
The federal government has no good way to know what the proper price should be for the thousands of different services provided to patients, and thus would overpay for many while underpaying for many others. The result of applying this kind of mindless regulation system-wide would be impaired access to many needed services and the slow exodus of the nation’s best and brightest out of medicine and into other pursuits.
A recent about-face by the Obama administration on so-called “state innovation waivers” may be the most important change to ObamaCare that no one is paying attention to. These waivers, which will begin in 2017, allow states to take a block grant of funding and waive nearly every major component of the law. A major change, however, is now set to make these experiments mostly impossible. In recent guidance, stealthily released at the close of business on a Friday last month, the Department of Health and Human Services announced that the rules are changing.
Today, the House will pass a budget-reconciliation bill that repeals ObamaCare and stops taxpayer funding to abortion providers. After more than 50 House votes to repeal ObamaCare in part and in full, and after the conscience of our nation was awakened again to the great evil of the abortion industry, we will put this bill on the president’s desk.
Unfortunately, we know and have known for a while that President Obama will veto any bill that repeals ObamaCare or defunds Planned Parenthood. That isn’t news. But with this bill, Republicans show that we have listened to the American people and can use reconciliation to pass substantive policies despite opposition from congressional Democrats and the constant threat of filibuster. That means we can repeat this same process with a Republican in the White House, overcome obstruction from congressional Democrats, and accomplish our greatest priorities.
If it’s December, it must be time for a massive, one-time, all-or-nothing annual spending bill. That’s just what has become of Congress’s core function over the past decade. This year’s version includes a 2,009 page omnibus appropriations bill and a 233 page tax bill mostly extending various “temporary” tax preferences and other provisions.
Republicans have majorities in both houses, so this bill reflects their priorities on the whole. But on health care, it’s actually most interesting for what it suggests about the Democrats—some meaningful number of whose votes are after all necessary for passage.
It has been called into question whether it’s true that Sen. Marco Rubio is responsible for the provision (inserted into last year’s annual spending bill and now again into this year’s) that requires the risk-corridor program in ObamaCare to be budget neutral. Like this year’s giant spending law, last year’s omnibus bill was the result of a leadership-driven process that drew on substantive expertise from the relevant committee staffs but did not much involve most members of either house. But Rubio was without question the first and most significant congressional voice on this subject, and if he hadn’t done the work he did, the risk-corridor neutralization provision would not have been in last year’s (or this year’s) budget bill.
There is a political duty to prevent the coming bailout of big health insurers if Congress is serious about achieving repeal of ObamaCare. Individual Americans who have been harmed by the health care law aren’t eligible for an administration-provided bailout. Nor did doctors get help with the increased costs of bureaucratic compliance. Instead, the administration gave top priority to the interests of its corporate friends and supporters. This is crony capitalism at its worst.
To stay on the path of repeal and replace, ObamaCare opponents need to address three critical aspects of the effort. First is the question of risk-corridor payments under ObamaCare. These are the payments made to insurers with “excessive” losses from the plans they offer on the exchanges. A second important question is the “Cadillac” tax, which imposes a 40% excise tax on plans with premiums above certain dollar thresholds, and which would be fully repealed by the bill Congress will send the president. A third important question concerns another key feature of any credible replacement plan: tax credits.