In what will be a busy week in Washington, the Republican House hopes to take another whack at ObamaCare reform, a large chunk of which is Medicaid. As if this were not enough to handle, Donald Trump promises a “big announcement” Wednesday about his tax plan, which will likely include cuts in the corporate tax rate.
Let us stipulate that Medicaid reform and corporate tax cuts are both excellent initiatives. Done properly, each would offer Americans, including those at the lower end of the income scale, a better deal than they have now. Unfortunately, pitching health-care reform as the way to help “pay for” corporate tax cuts undermines the best arguments for both.
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Republicans have put themselves in a deep hole on ObamaCare, both politically and on the health-market merits, but maybe they’ll grab the rescue line now dangling in front of them. A potential compromise among the House’s contentious GOP factions could begin the climb out.
The chance to revive the failed repeal-and-replace bill developed this week when the House Freedom Caucus’s Mark Meadows and the centrist Tuesday Group’s Tom MacArthur struck a tentative deal. Their compromise would allow states to seek waivers to opt out of most of ObamaCare’s insurance mandates.
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Many people are going without insurance under ObamaCare because they cannot afford the law’s expensive plans or aren’t aware of their options. Congress can help these Americans and many others get insurance by enrolling them in no-premium, no-obligation plans from which they could withdraw if they wanted to. Opponents will argue that automatic enrollment infringes on personal liberty. But people placed into such coverage would be free to opt out or to select an option that better suits their needs. Few people opt out of employer pensions when they are placed into them automatically, and no-premium insurance would impose no cost on the enrollees.
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It has become a tired, familiar act. Members of the House Freedom Caucus say they are the only true conservatives, while other congressional Republicans are RINOs, “Republicans in Name Only.” In the latest episode, the Freedom Caucus and its outside allies—including Heritage Action and FreedomWorks—denounced the GOP health-care bill as “ObamaCare Lite.”
These claims confused the grass roots but were simply untrue. Look at the legislation’s text, which canceled ObamaCare’s insurance exchanges, halted and reversed its Medicaid expansion, killed its taxes, and whacked its individual and employer mandates.
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The Wall Street Journal makes an important point today about a subset of the Obamacare repeal fight: the lobbying to repeal the law’s taxes, like the ones on medical devices and investment income for the wealthy. It gets more complicated to get rid of them, the Journal points out, if President Trump and Congress don’t reach some kind of resolution on Trumpcare. That would shift all of the lobbying for repeal of those taxes to the tax reform fight, which is already likely to be complicated enough.
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As Republicans take another crack at devising a plan to replace ObamaCare, here’s an idea they should consider: Give each Medicaid patient a health savings account—and put $7,000 in it every year. Under ObamaCare, Medicaid has become the only option for millions of Americans. But that doesn’t mean much if the doctors in their communities don’t accept new patients through the program.
The GOP’s recently benched health care bill would have substantially reformed Medicaid by giving the states block grants, along with more flexibility on how to spend the money. But there’s a better model. Republicans should empower Medicaid patients by providing funds to them directly, which would allow them to build a personal safety net that could last a lifetime.
In an interview in the Oval Office, Mr. Trump said he was still considering what to do about the payments approved by his Democratic predecessor, President Obama, which some Republicans contend are unconstitutional. Their abrupt disappearance could trigger an insurance meltdown that causes the collapse of the 2010 health law, forcing lawmakers to return to a bruising debate over its future.
“Obamacare is dead next month if it doesn’t get that money,” Mr. Trump said. “I haven’t made my viewpoint clear yet. I don’t want people to get hurt….What I think should happen and will happen is the Democrats will start calling me and negotiating.”
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By ending federal matching funds and shifting managerial responsibility to the states, Republicans propose to modernize Medicaid’s funding and give local authorities greater flexibility to design program innovations that are more specific to each state’s needs. The reason Medicaid costs less than private insurance is because it provides less. Medicaid provides “comprehensive coverage,” but coverage isn’t care. It is easy to write down a long list of services that are covered. Think of it as having a coupon for free health care—a coupon that is difficult, sometimes impossible, to redeem. Per capita allotments or block grants may result in reduced federal spending, but their primary purpose is to bring about reform of Medicaid.
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In an interview aired Wednesday, President Trump said that his overriding legislative priority is to pass health care reform, but he won’t wait indefinitely to turn his attention to overhauling the nation’s tax code. Trump told the Fox Business Network, “We’re going to have a phenomenal tax reform, but I have to do health care first. . . . I don’t want to put deadlines. Health care is going to happen at some point. Now, if it doesn’t happen fast enough, I’ll start the taxes.” The White House had hoped to pass a tax bill before the congressional recess in August, though officials have conceded the deadline is slipping. Trump suggested that it is important to pass the health care bill first, because it would provide “hundreds of millions of dollars” in savings that could be used to offset a net tax cut.
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Republicans left Washington on Friday without a health-care deal, despite renewed negotiations after last month’s fiasco and a burst of White House diplomacy. Perhaps the two-week recess will be a cooling-off period and we hope the House’s factions can agree on a deal. If they can’t, then at least we’ll learn who’s responsible for defeat.
President Trump and Republicans campaigned on repeal and replace, and the President at least wants to keep his word. The ObamaCare exchanges are also fragile and precarious, and consumers harmed by rising premiums and declining choices are likely to blame the party in power.
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