Senate Republicans’ healthcare bill is far from perfect, and what it does with the individual market may make things worse.
But the Medicaid provisions provide an opportunity for real reform. If implemented as written, it represents an improvement over a very bad status quo.
One positive point is that it would replace Obamacare’s Medicaid expansion with an age- and means-tested tax credit. This will allow many of the childless adults who climbed into the Medicaid expansion to purchase better coverage than Medicaid offers. This would also instantly benefit millions of people in states where the expansion was never implemented.
The bill also places much-needed restraints on Medicaid’s growth and removes some of the federally imposed obstacles that states face when they try to manage their Medicaid programs effectively. In theory, this should allow the states to maintain both nominal coverage and access to care — the latter being a serious problem for many indigent Medicaid patients that has been exacerbated by the expansion to childless adults above the poverty line.
But there are still two big problems. The first and most glaring is that the Medicaid reforms contained in this bill may never take effect at all. Just how likely is it that a future Congress — in 2021 when the expansion ends, let alone in 2025 when limits would be imposed on Medicaid growth — will just bite the bullet and allow potentially unpopular reforms to go forward?
Think back to Congress’ ill-fated attempt to reduce doctor reimbursements under Medicare (remember the “Doc Fix?”). History has shown that when faced with hard choices, Congress tends to chicken out at the tail end of the prescribed 10-year window, when cuts are actually supposed to take effect. As the Washington Examiner‘s Phil Klein put it, one likely outcome is that “the short-term spending” to shore up the insurance market “is going to come through, and the promised spending cuts and reforms are very unlikely to ever be implemented.” Were this scenario to play out, Republicans could rightly be accused of merely rescuing Obamacare from its own self-destruction.
The other problem is that the bill’s long-term potential limitations on the growth in Medicaid spending must be weighed against its other problems. The Senate bill may avert a full collapse of the individual insurance market, but only at the cost of a 12-figure taxpayer bailout over 10 years. It may also allow Republicans to check the box (sort of) on their promise to repeal Obamacare, but if it doesn’t provide states the flexibility to loosen regulations on insurance offerings and thus bring down monthly premiums, then it will do little to save them from the electorate’s wrath.
Most conservatives have come to recognize and even accept that neither the votes nor the political will exist at this point for the “root and branch” removal of Obamacare that they were promised. Ideological imperfection is simply part of the landscape now. Obamacare’s augmented and unnecessary federal interference in health insurance markets is not going anywhere.
But what Republican senators must understand, both for the common good and for their own political survival, is that they cannot afford to pass a merely inoffensive bill if it doesn’t dramatically change a bad situation for the better.
Unless the bill they pass produces a perceptible and substantive improvement to Americans’ experience buying insurance, the Republicans who now fret about going too far may not be able to survive the withering onslaught of Democratic rhetoric about their heartlessness, which will come at them just as ferociously either way.
