In 2010, 2014, and (arguably) 2016, America elected Republicans because they wanted Obamacare repealed and replaced. They did not elect Republicans to revamp Medicaid. In fact, candidate Trump said he would not cut the program.
Yet, neither the House nor the Senate health care bill repeals and replaces Obamacare. And both revamp Medicaid. Not wise.
This is not to say that Medicaid won’t need to be revamped. It will. But the need to revamp Medicaid is not immediate. The immediate need is to save America from Obamacare and its destruction of the private health insurance market, as Republicans promised to do.
Moreover, it’s questionable whether either the House or the Senate bill could rescue Medicaid. The rescue doesn’t take place for years. But as Daniel Horowitz argues, “if [Republicans] are going to keep the core of Obamacare, which is the private market regulations and subsidies, and own the death spiral immediately from the adverse selection of getting rid of the employer and individual mandates (on top of keeping the regs), [they] will not survive politically. . .[until] 2020, much less by 2025, to enact the promised Medicaid ‘reforms.’”
Horowitz also argues that effective Medicaid reform will require a viable private market into which Medicaid recipients can migrate. But neither the House nor the Senate proposal heals the private market. “How,” he asks, “can we maintain, own, and exacerbate Obamacare’s destruction of the private sector, flood the rolls of Medicaid even more until 2020, and then suddenly throw people off? Into what?”
The final problem with doing Medicaid reform instead of “repeal and replace” is that this move may doom the salutary (in some cases) alterations to Obamacare contained in both bills. The Medicaid reforms are the main driver of the gloomy forecasts of the Congressional Budget Office. Whether or not one believes the forecast for the Senate bill, it is a serious obstacle to getting 50 Republicans to vote for the Senate bill.
Why did the GOP decide to do Medicaid reform rather repeal and replace? I’m not sure. However, I do know that reforming Social Security, Medicare, and Medicaid has been Speaker Ryan’s number one issue for years. He says he’s “been dreaming” about revamping Medicaid “since I’ve been around, since you and I were drinking at a keg.” Obamacare legislation gave him and like-minded conservatives the opportunity.
Medicaid reforms of the type contained in the House and Senate bills also saves money. This appeals to conservatives in its own right. Furthermore, as I understand things, it provides a basis for characterizing the legislation as a spending bill, thus rendering it immune to filibuster under the “reconciliation.”
I’ve argued that Republicans are taking too cramped a view of what can be done through reconciliation. It may be that viewing Medicaid reform as necessary for purposes of reconciliation makes the related error of taking too stringent a view of must be done for these purposes.
I’ll give the last word to Horowitz:
What Republicans and some conservatives are doing is completely backwards. They are putting themselves on the hook for the political liability of Medicaid “cuts” that will not and cannot happen anyway, all the while not repealing Obamacare for the private market, the critical political and policy winner.
They are attempting to first storm the fort on the cliffs with the hope of establishing a beachhead after they are dead. Instead we must establish the beachhead first, and that begins with repealing the core elements of Obamacare’s destruction of the private sector.