On health care, sometimes process overcomes substance. This is the case with the new Senate discussion draft for health care legislation. It aims to be the companion version of the House-passed American Health Care Act. But while everyone is focused on whether Senate Majority Leader Mitch McConnell is acting more or less like Democrats when they rammed through the Affordable Care Act seven years ago, very few are actually concentrating on what is in the draft bill.
True, the measure is similar to what passed the House. But the changes it proposes are actually less drastic. The main sticking point is how Medicaid, the national-state program for low-income health care, is to be funded going forward.
Needed: More devolution of power to the states
Medicaid was expanded dramatically under the ACA, or “Obamacare.” The new law would eliminate those expansions and cap the amount of money the federal government would pay for each Medicaid enrollee. The states have the option to make up the difference, and many of them may will do so.
But to accomplish this, the states will likely be forced to raise taxes. That means that the cuts in the program aren’t necessarily cuts at all, but shifts of financial burdens from Congress to state legislatures. All the Congressional Budget Office scoring of these proposals in the world will fall short of reality if – as is likely the case – states do actually make some effort to address the shortfalls.
Indeed, states have greater flexibility than the one-size-fits-all approach that Obamacare took. This, in itself, is a great improvement over the ACA, and will likely produce a great deal of innovation and experimentation that may well improve the system.
Getting rid of the bad in Obamacare
The Republican plan also allows states to implement work provisions in order to qualify for Medicaid benefits. The caterwauling on this issue is not dissimilar to the bewailing that took place in the 1990s. That’s when the welfare reform package agreed upon by congressional Republicans and President Clinton included similar provisions.
The conventional wisdom at the time was that such a heartless requirement would result in people starving in the streets. In fact, precisely the opposite happened! Welfare roles began to shrink for the first time in a generation. Most observers now view that approach as a major success. Given that this takes a similar approach, it is not unthinkable that hindsight will be equally kind to this bill.
Like the House-passed legislation, the Senate bill gets rid of the things Republicans hated most about Obamacare. The employer and individual mandates are all gone, as are the penalties levied against those who don’t comply with them.
It also abolishes nearly all the new taxes that came with the ACA, like the increased payroll tax on high income individuals and the taxes applied to insurers, drug makers, and medical device manufacturers. And, in good news for Kardashians (and possibly Donald Trump), it also gets rid of the 10 percent “tanning tax” for people who like to sunbathe under ultraviolet lamps.
The one tax it preserves is the so-called “Cadillac tax” for overly generous employers plans. But it delays implementation of that tax until 2020, as opposed to the House bill, which delayed implementation until 2026.
Keeping the good, or at least the popular, provisions of ACA
The things people like most about the ACA, however, are largely preserved in this bill. People with pre-existing conditions still can’t be denied insurance. Children can still stay on their parents’ policies until age 26. People still get subsidies for insurance, although they’re less generous than the Obamacare subsidies were.
The bottom line is that Democrats measure the success of federal healthcare by the number of people covered, and Republicans measure success by how much healthcare costs are lowered.
Both of these positions represent laudable goals in principle, but, to some degree, they are mutually exclusive, since lowering coverage lowers costs, and expanding coverage increases costs. The Republican plan tries to strike a balance between these two extremes, but any change in coverage is blown out of proportion by a media that doesn’t see any difference between fewer people covered because of less federal funding and fewer covered because they voluntarily choose not to buy insurance.
This bill certainly isn’t perfect–. But it certainly doesn’t deserve the opprobrium currently being heaped on it by the liberal media. In any case, it would be prudent for both sides to tone down the rhetoric and pay attention to what’s actually in the bill.