Tuesday, June 27, 2017

The Senate’s Health-Care Hour

GOP opponents will be held accountable if they ruin this rare reform moment.


By Review & Outlook
The Wall Street Journal
June 27, 2017

Senate Republicans are headed for a vote on their health-care bill as soon as this week, and Majority Leader Mitch McConnell is still scrambling for 50 votes. What the holdouts should understand is that this is a defining political moment. They may never have a better chance to improve U.S. health care and reform government, and the window is closing.

Repairing the failing individual insurance market, putting Medicaid on budget for the first time in the entitlement’s history, and passing an enormous pro-growth tax cut are historic opportunities. If reluctant GOP Senators think they won’t be held accountable for a defeat, they should think again.

Moderates like Ohio’s Rob Portman and West Virginia’s Shelley Moore Capito remain nervous about the bill’s Medicaid overhaul, but the block grant model is the kind of fiscal progress they normally claim to want. The budget will never balance, and debt will continue to accumulate, if Congress can’t modernize entitlements. Mr. Portman already won an extension to four years from three in the House bill for the start of phasing out Obama Care’s Medicaid expansion, and many Senators represent states that didn’t expand.

Liberals call block grants heartless, but ObamaCare increased Medicaid enrollment by 29% to 74.5 million Americans—one of four citizens—in a program originally meant for poor women and the disabled. Equalizing payments for these traditional beneficiaries and ObamaCare’s new able-bodied adult enrollees above the poverty line is uncaring only in liberal caricature. The real scandal is Medicaid’s poor health outcomes and a funding formula that doesn’t encourage states to prioritize the neediest Americans.

Conservatives such as Ted Cruz of Texas, Rand Paul of Kentucky, Mike Lee of Utah and Ron Johnson of Wisconsin claim the bill doesn’t do enough to lower insurance premiums by repealing every mandate and regulation that artificially drives up costs. Their objections are principled but no bill will ever be perfect and most of their ideas don’t now command a Senate majority.

On policy substance, the Senate bill gives Governors the regulatory flexibility to upgrade their insurance markets. Even if the bill isn’t everything conservatives imagine, no one can credibly claim it isn’t deregulatory progress. ObamaCare created a rule-making pathway supposedly meant to encourage state innovation, but these so-called 1332 waivers are highly prescriptive in statute and the Obama Administration tightened them even more through regulation. Among the four states that applied, only a single waiver was approved.

The Senate bill would fast-track 1332 applications and expand their scope to include items like the definition of a “qualified health plan,” minimum benefits or limits on purchasing catastrophic health plans. The Senate waivers are far more comprehensive than the House’s Meadows-MacArthur amendment, and any Governor who wants to experiment with market solutions and roll back overregulation will be liberated from federal command and control.

The Trump Administration would rapidly start to restore the traditional state regulatory authority over insurance. Waiver critics say a Democratic successor could take back freedoms not codified in law. But federalist devolution will be hard to reverse if Governors can show they can make premiums more affordable, improve the incentives for insurers to rejoin a more robust market and increase insurance without mandates.

The Congressional Budget Office on Monday released its cost-and-coverage estimate of the Senate bill, and opponents are touting its guess of 22 million fewer insured people compared to ObamaCare. But CBO’s forecasts always underestimate the benefits of markets, and the real news is that the scorekeepers expect premiums to fall by 30% by 2020 than under current law. The GOP can deliver tangible financial gains to the millions failed by ObamaCare.

These are enormous conservative policy victories, even if they aren’t everything we or other free-marketeers would like. Democrats built the entitlement state piecemeal over decades, and it will have to be reformed in pieces that are politically sustainable.

Some Senators can’t be placated on substance and they may decide that defeating the bill is better for them politically. This is pure fantasy. Democrats won’t ease their opposition to Nevada’s Dean Heller in 2018 if he votes no. They’ll double their investment against him as Mr. Heller’s political base sours on him. When you face a tough political choice, better to stick with your friends than bet on the kindness of political enemies.

Another fantasy is that Republicans can vote no and blame Democrats for the collapsing ObamaCare status quo. The media will blame Republicans for every premium hike, and voters believe they elected a GOP Congress and President. If this bill fails Republicans will be forced to come hat in hand to Chuck Schumer’s Democrats for the votes to stop a downward spiral of surging premiums and declining choices. Conservative reform won’t be included.

The larger and rarer opportunity is to show that conservative ideas can succeed in health care. More progress is possible as voters come to trust Republican solutions, but not if the GOP now panics into defeat. Senator Johnson entered politics to oppose ObamaCare. Is he really going to squander this chance to make his detour into politics worthwhile?

Every consequential legislative reform is difficult, but the GOP anxiety over repeal and replace is excessive. They should have more confidence in their convictions and how their solutions can improve American lives.


Article Link To The WSJ: