HPM Faculty Voices
An Op-Ed from the Department Chair
As I write this note, the Republican leadership in the Senate is working behind the scenes to convince fifty Senators to vote for the Better Health Reconciliation Act, and to thereby move ahead with the longstanding Republican opposition to the Affordable Care Act. The outcome of this political battle is far from clear, particularly given the deep divisions between conservatives (such as Ted Cruz, Mike Lee and Rand Paul) and moderates (such as Susan Collins, Dean Heller and Lisa Murkowski).
This political battle has enormous implications for every American. At the heart of the battle is the future of the Medicaid program, the nation’s largest health insurance program, covering one out of every five Americans. It provides reasonable and low-cost insurance to seniors in nursing homes, the disabled still living in the community, and poor and working class families. It is administered by the states, which split the cost with the federal government, but have significant discretion to implement innovative and diverse care management strategies. And it is an increasingly popular program, though it still struggles to escape the stigma of its welfare-based roots.
The ACA provides additional federal funding for states that choose to expand their Medicaid coverage. The Republican effort to phase out this additional funding is not a surprise, though it is poor policy (since this is one part of the ACA that works well) and also questionable politics (especially in the thirty-one states that adopted the expansion).
But the Republicans also seek to cap federal spending on Medicaid more generally, cutting almost $800 billion in federal funding over the next decade, even though most of that funding has nothing to do with the ACA? Why add this effort to an ACA repeal proposal?
The “Willy Sutton” answer is that the broader attack on Medicaid is included because that is where the money is. Want to cut federal spending by hundreds of billions of dollars (so as to enable billions in tax cuts)? Medicaid is where to look, a target of opportunity the Republican’s could not resist.
But there also is a long history of Republican efforts to cap federal spending on Medicaid, beginning with Richard Nixon and Ronald Reagan and continuing with Newt Gingrich and Paul Ryan. Every prior effort has failed. Medicaid enrollment and program spending instead has significantly increased under every President, Republican or Democrat, since the early 1980s. Why? Because Medicaid benefits many and is a program with unexpected political resilience and influence!
Given this history, the Republican leadership made a predictable but politically unwise decision to take on Medicaid as part of their effort to repeal the ACA. Medicaid has consistently defied the political odds, and (hopefully) will do so again.
So, what should Mitch McConnell do? First, don’t use an effort to repeal the ACA as a vehicle to enact a $600 billion tax cut. Instead, try to find a few Democratic votes for a more moderate proposal, one that could still allow Republicans to claim they have repealed “Obamacare.”
One such idea would be to eliminate the ACA Exchanges (which were a poor policy idea) and instead allow Exchange enrollees to buy-into Medicaid. Or use Medicaid as the heart of a “public option” strategy, allowing anyone to buy into the program. The Nevada legislature recently enacted such a provision, though the Governor vetoed the proposal. But I firmly believe that regardless of what happens in DC over the next month, we ought to use Medicaid as the path toward an affordable and truly “better” health system for all Americans.
Michael Sparer, PhD, JD
Professor and Chair