#256: No Small Tweaks

#256: No Small Tweaks
January 25, 2011

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

I was asked during an interview on WRKO in Boston about whether the vote to repeal President Barack Obama’s health law had any meaning, or whether it was just pointless posturing. The latter certainly seems to be the opinion of certain Democrats in the House of Representatives, and it’s been a talking point repeated all around the DC talking head circuit over the past few days.

Yet in reality, a vote is an essential way of matching up talk with action: Since Republicans promised to do it, they would do it. On the other hand, while 13 Democrats remain out of the 34 who had voted against the legislation last year--and the news regarding the law has gotten much worse as we have followed Nancy Pelosi’s advice about learning what’s inside it--only three of those Democrats chose to actually carry their opposition over into actual action by voting for repeal. Those other 10 Democrats will have some explaining to do come November of 2012.

This lack of enthusiasm for matching actions to words also should serve as a lesson to Republicans who are overpromising about their possible successes in the Senate. While some Democratic Senators may critique the health care law extensively or share private promises of opposition, all that really matters is how they vote--and it’s unlikely that more than two or three will ever break with their party leadership on the matter. They’ll simply use the positioning to get something they want--that’s how politics works, and overly optimistic Republicans should know that by now.

More realistic Senate Republicans, like Sen. Jim DeMint (R-SC), already have committed privately to exercising the Rule 14 approach (as detailed by The Heritage Foundation’s Brian Darling) to bring the overall repeal bill up for votes frequently.

But there’s another way, a more practical approach, and one that might actually pass both houses. As detailed in my essay in Heartland’s new book of big ideas for the Republican Congress, in the absence of any likelihood of major policy changes or overall repeal, it’s better to avoid trying to fix the unfixable. Instead, a waiver-based approach that expands the authority of the states, forces HHS Secretary Kathleen Sebelius to act, and allows for short-term relief for entrepreneurs and state budgets makes the most sense.

It’s time to consider an approach that makes sense given the political realities involved, and not go the route of making small tweaks to a vast regime of health care control.

-- Ben Domenech


IN THIS ISSUE:


ALEC: STATE LEGISLATORS’ GUIDE TO REPEALING OBAMACARE

The American Legislative Exchange Council, source of the popular and effective Freedom of Choice in Health Care acts, has released its comprehensive and excellently assembled guide for state legislators to use in opposing the president’s health care law. The guide includes a litany of examples of action, as well as referrals to model language, which should be at hand for every state legislator who wants to have an impact in this area. Some of the activities include: “Introduce a resolution supporting repeal of ObamaCare to send the repeal message to members of your state’s congressional delegation,” “Enact a moratorium on ObamaCare rulemaking which will allow your state to focus its limited regulatory resources on core functions of government,” and--one step I believe is key--advice on how to “Reject ObamaCare discretionary grants that aid in the federal takeover of state health insurance regulation.”

Read the whole document, and share it with others.

SOURCE: American Legislative Exchange Council


AMERICAN ACTION FORUM: REPEAL, JOBS, AND BUDGET AUSTERITY

One of the chief arguments of the administration on the repeal vote was that it would have a profoundly negative effect on jobs and budget austerity. This is sheer hogwash--as Charles Krauthammer recently wrote in his Washington Post column:

Suppose someone - say, the president of United States - proposed the following: We are drowning in debt. More than $14 trillion right now. I’ve got a great idea for deficit reduction. It will yield a savings of $230 billion over the next 10 years: We increase spending by $540 billion while we increase taxes by $770 billion. He’d be laughed out of town. And yet, this is precisely what the Democrats are claiming as a virtue of Obamacare.

There’s more hard data here to critique the White House’s position, however, than a Krauthammer column. Former CBO head Douglas Holtz-Eakin’s latest paper, in fact, addresses this very topic in detail. It also includes a key note about effective marginal tax rates--one aspect of the anti-job effects of Obamacare that few people seem to acknowledge:

The ACA’s individual mandate requires families to purchase insurance. As a family’s income rises above 133 percent of the federal poverty level (FPL), they will receive their subsidy to purchase health insurance in the exchanges. In turn, however, as their hard work yields a higher income, exchange subsidies are clawed back or effectively taxed away. As Chart 1 shows, prior to the ACA there were already some lower income families facing effective marginal tax rates above those in the middle class. But the barrier to success imposed by the ACA’s individual mandate and perverse subsidy structure creates an even more daunting pattern of EMTRs.

SOURCE: American Action Forum


PRI: RHODE ISLAND’S MEDICAID WAIVER SHOWS HOW STATES CAN SAVE THEIR BUDGETS FROM OBAMACARE’S ASSAULT

I had the pleasure of interviewing former Rhode Island health secretary Gary Alexander this past week--now headed to the Pennsylvania cabinet--for a Health Care News podcast, which I’ll send to you shortly. The story he had to tell about the experience of Rhode Island’s Medicaid reform is fascinating and intriguing for a number of reasons. John R. Graham of the Pacific Research Institute has an excellent Health Policy Prescription outlining why many of the lessons of Rhode Island could be applied to other states. A longer excerpt is necessary here:

In August 2008, Rhode Island’s governor tasked his Secretary of Health and Human Services to apply for a “Global Consumer Choice Compact Waiver” from the federal government. ... It applied for a global cap on all Medicaid spending, in return for overall flexibility. The challenge was huge: the federal government did not approve the waiver until January 19, 2009 – the last full day of the Bush Administration! Previously, Rhode Island had navigated 11 different waivers. This meant that state bureaucrats faced off against a number of different factions within the federal Centers for Medicare and Medicaid Services (CMS), inhibiting the state’s ability to increase co-ordination and quality of care.

Rhode Island’s waiver is not a block grant. It preserves the FMAP, but caps aggregate spending through 2013 at $12.075 billion. Nevertheless, it appears to have had the results one would expect from a block grant: Spending has plummeted from what was anticipated. Remarkably, through the first six quarters of the waiver (January 1, 2009 through June 30, 2010) actual spending was $2.7 billion versus $3.8 billion budgeted - savings of almost one-third.

Research has not yet identified exactly how much each reform contributed to the savings, but one expects that many of the changes Rhode Island introduced would be significant contributors. For instance, the state was exempted from Any-Willing-Provider (AWP) rules, which meant that it had more power to incentivize quality from medical providers. It also “rebalanced” Medicaid Long-Term Care (LTC), reducing abuse of this program along the lines recommended in a report recently published by PRI. Critically, it empowered Medicaid beneficiaries to make better choices about their care by giving them more direct control of the dollars spent on their health care.

SOURCE: Pacific Research Institute


IBD: OBAMACARE WOULDN’T HAVE SAVED CHILD

Following on last week’s all-Medicaid edition of CPR and the above item, I was glad to see David Hogberg at Investor’s Business Daily smack down one of the most ludicrous claims I’ve seen about Obamacare’s benefit for Medicaid recipients. Responding to a claim by the Washington Post’s Ezra Klein that Deamonte Driver – a Washington, DC child who died tragically after an easily preventable dental problem turned deadly – would have been saved by Obamacare because he would’ve “had an Aetna card,” Hogberg demolishes the claim with the truth:

Under ObamaCare, if you earn less than 100% of the federal poverty level, you are only eligible for Medicaid. You are not eligible for a premium subsidy to help you buy private coverage on an insurance exchange. Presumably, someone like Driver’s mother who is living in homeless shelters is making less than 100% of the federal poverty level. The only people who qualify for either Medicaid or a premium subsidy are those between 100% and 133% of FPL. Klein knows this, as Ron Pollack of Families USA helpfully explained it to him.

Despite this, Klein says that the Affordable Care Act (aka ObamaCare) “means health-care coverage for more than 30 million Americans,” that “the repeal legislation Republicans are pushing does nothing to replace the coverage the Affordable Care Act would give to those people,” and, thus, that the GOP offers no “solution for the Deamonte Drivers of the world.” He further knocks Rep. Andy Harris, R-Md., for complaining that he had to wait 28 days for his congressional health insurance to kick in. “(Harris) knows his taxpayer-subsidized insurance is important. But what about Driver’s?” Klein asks.

Nice try, but ObamaCare doesn’t offer any solution for the Deamonte Drivers of the world either. In fact, to the extent that Medicaid played a part in his death (Driver’s mom had difficulty finding a dentist because few dentists accept Medicaid due to its lousy reimbursement rates), ObamaCare puts more Deamonte Drivers at risk by expanding Medicaid to 133% of FPL.”

As we know, Medicaid has awful outcomes and an even worse budgetary future. The idea that forcing more people into this already overburdened program even as we cut payment rates for doctors is “helping them” needs to be squelched like the idiotic statement it is.

SOURCE: Investors.com


HEALTH CARE NEWS: AN INTERVIEW WITH JOHN C. GOODMAN

One last item of note concerning the repeal vote--the following morning, I had the opportunity to interview John C. Goodman of the National Center for Policy Analysis. He had several insights to offer regarding the vote, and the steps that ought to come over the next two years in Washington on the issue, and whether a piece by piece approach can have any effect. I hope you’ll listen and subscribe to our podcast feed.

SOURCE: The Heartland Institute

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)