Health-care bill is fair
Before Obamacare, state governments were the chief regulators of health insurance. Obamacare put the federal government in that role. The latest Republican health-care bill, sponsored by Sens. Lindsey Graham, Bill Cassidy and others, would partially reverse that shift in authority. It would also give states the ability to allocate a lot of federal health-care dollars as they wish.
Debate over the bill thus largely reflects the assumptions that people bring to it. Liberals and conservatives have different answers on three related questions: Should states be trusted more or less than the federal government to do right by the poor and sick? How well is Obamacare performing? And is it possible for states to spend money more efficiently than Obamacare is doing?
According to the Kaiser Family Foundation, the bill will have the federal government give states 8 percent less between 2020 and 2026 than Obamacare would give them. If you think that it’s unreasonable to expect states to get much more bang for the buck than the federal government does, and that states won’t tax themselves to make up shortfalls, you’ll see that as a draconian cut.
My predispositions on these questions are the typical conservative ones, so I’m inclined to favor the bill, and to regard the criticisms of it as vastly overstated.
Progressives worry that states will apply for waivers without making adequate provision for the chronically ill and the federal government will rubber-stamp its approval. I assign a low probability to that scenario because political pressure will militate against it.
There are many other constructive ways states could use their new authority. Obamacare has expanded coverage both through its exchanges and (even more) through expanding Medicaid to cover able-bodied people above the poverty line. A state could combine both groups into one pool, giving everyone in it a share of the state’s block grant to buy insurance. The result could be better insurance than Medicaid and a healthier pool than the exchanges.
Another complaint about the bill is that it penalizes liberal states and rewards conservative ones. That feature of the bill is better seen as a corrective to the way federal policy has favored the liberal states over the conservative ones. Anyway, it cuts against progressives’ fears about coverage. The states that would see significant cuts in federal funding under Graham-Cassidy are the very ones that would be most inclined to pick up the slack themselves.
The process that has led to this bill, with no congressional hearings and no mark-ups, is indefensible. But its substance is reasonable. States could use it to facilitate more robust and competitive markets in individual health insurance, and politics is likely to work against the worst-case scenarios.