Liz Peek

Two Republican Senators Just Guaranteed Runaway Spending on Medicaid

Liz | 07/19 at 08:47 AM

The latest scuttling of the Senate health care bill comes at the hands of Senators Mike Lee of Utah and Kansas’ Jerry Moran. Lee, of course, has made a name for himself battling the GOP establishment. In this latest disruption, he lacked the political bravery to go it alone – to be The Guy that torpedoed the long-awaited repeal and replace effort – and so he apparently enlisted milquetoast Moran, a former McConnell ally, to share the spotlight.

Not only have they doused chances of reforming Medicaid, an out-of-control entitlement that has grown beyond its mission and financing, but they have further slowed the Trump agenda of lower taxes, lighter regulation, and infrastructure investment, which offers income and job opportunities for the entire country. There’s a reason the dollar swooned when the two senators announced their opposition; the world is losing confidence that our hapless Congress will move on the promises of last year’s election.

Related: Why Trump Can’t Sell Health Care Reform – and the Price He’ll Pay for It

The difficulty of replacing Obamacare, which now has its tentacles into every crevice of the healthcare industry and American life, was never going to be easy. But without teamwork, it was going to be impossible, and so here we are.  

Presumably, the two senators are moved by politics. A recent contest to fill the seat vacated by Mike Pompeo in Kansas was surprisingly close, with GOP victor Ron Estes winning by only 7 points. In November, Trump won that district by 27 points, and Pompeo scored more than a 30-point margin. Maybe Moran thinks he is better off distancing himself from the Trump agenda. 

Meanwhile, neither Mike Lee nor the state of Utah has ever been in Trump’s corner. Trump won in the state, beating Hillary Clinton 45 percent to 27 percent, but it was also in Utah where Independent (conservative) Evan McMullin had his best results, taking 21 percent of the vote. Mormons were not sold on Trump, and Lee was an early member of the “never Trump” caucus.

Nonetheless, we must take at face value Lee’s statement explaining his opposition to the Better Care Reconciliation Act: He complained that the bill doesn’t repeal “all of the Obamacare taxes, it doesn’t go far enough in lowering premiums for middle-class families, nor does it create enough free space from the costly Obamacare regulations.”

Related: The GOP Senate Health Bill Just Died as Two More Senators Say No

Some of Lee’s concerns had already been met, since he teamed up with Ted Cruz in pushing through the “Consumer Choice” amendment, allowing insurers to offer streamlined plans free of Obamacare’s onerous mandates as long as they also sold the beefed-up versions. That sounds like a lot of “free space,” especially when combined with a withdrawal of Obamacare’s mandate requiring most Americans to buy insurance.

Lee’s complaint that the bill doesn’t repeal “all of Obamacare’s taxes” is baffling. The only remaining taxes are those on the wealthy; the levies on insurers and medical device manufacturers, as well as other taxes, are tossed out. But just recently, on June 27, Lee had released a statement damning the original version of the BCRA because it included “hundreds of billions of dollars in tax cuts for the affluent.” Which is it? Does he want to keep the taxes on the wealthy or not? 

Lee portrays himself as a principled conservative, but like so many of his ilk, he balks when having to put his words into action. He introduced a bill, the Welfare Reform and Upward Mobility Act, that, among other worthwhile goals, would “get existing federal welfare programs under control.”

Yet, Lee has just killed the biggest entitlement reform effort in decades. The most redeeming feature of the Senate’s healthcare bill is that it reins in the growth of Medicaid, an entitlement program that has rapidly morphed into the nation’s third-biggest domestic program behind Social Security and Medicare.  Medicaid accounts for one out of every six dollars spent on healthcare in the U.S. and consumes nearly one tenth of the federal budget. Add in spending by states, and the total skyrockets to well past half a trillion dollars per year.  

Related: As Health Care Reform Crumbles, House GOP Turns to the Budget and Taxes

Medicaid is notable for having well exceeded its original mandate to help poor single parents and their children on welfare. Obama, desperate to increase sign-ups for the ACA, opened eligibility to able-bodied working-age adults. In the early roll-out of Obamacare, 71 percent of the newly covered came from that expansion. As others have pointed out, the federal government pays states 90 percent of the cost of Medicaid expansion vs. 57 percent for traditional Medicaid. It is a travesty, and badly needs reform, which the BCRA offered.

Senator Mitch McConnell proposed shortly after being blindsided by the defections of Moran and Lee that the Senate would vote instead for an immediate repeal of Obamacare, with a two-year window during which legislators could craft a replacement program. That gambit was presumably to show reluctant conservatives that they lacked the votes to eradicate President Obama’s legacy program. Indications are that no such vote will take place because many are skeptical that Congress will come up with a decent alternative. Their viewpoint is understandable.

The damage done by Moran and Lee is incalculable and unfixable. Moran had the temerity to say in his statement, “If we leave the federal government in control of everyday healthcare decisions, it is more likely that our healthcare system will devolve into a single-payer system, which would require a massive federal spending increase.”

Nothing could speed that eventuality faster than the GOP losing a majority in the House in 2018, which Lee and Moran’s votes may well ensure. If Democrats rally from their demoralized minority on the strength of Republican’s inability to topple Obamacare, we will indeed move towards a single-payer system, and we will thank Mssrs. Lee and Moran.

Posted in Fiscal Times
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