California Is What’s Wrong with Obamacare

In recent days, California lawmakers have finalized their budget. The legislation includes several choices regarding health care and Obamacare, most of them incorrect ones. Doling out more government largesse won’t solve rising health costs, and it will cause more unintended consequences in the process.

Health Coverage for Individuals Unlawfully Present

This move has drawn the most attention, as the budget bill expands Medicaid coverage to illegally present adults aged 19-26. California will pay the full share of this Medicaid spending, as the federal government will not subsidize health coverage for foreign citizens illegally present in the United States.

As to those who disagree with this move, one can study the words of none other than Hillary Clinton. In 1993, she testified before Congress in opposition to giving illegal residents full health benefits, because “illegal aliens” were coming to the United States for health care even then:

We do not think the comprehensive health care benefits should be extended to those who are undocumented workers and illegal aliens. We do not want to do anything to encourage more illegal immigration into this country. We know now that too many people come in for medical care, as it is. We certainly don’t want them having the same benefits that American citizens are entitled to have.

If Clinton’s words don’t sound compelling enough, consider one way that California may finance these new benefits: By reinstating Obamacare’s individual mandate. To put it another way, people who obey the law (i.e., the mandate) will fund free health coverage for people who by definition have broken the law by coming to, or remaining in, the United States unlawfully.

A Questionable Individual Mandate

This issue faces multiple questions on both process and substance. First, the budget bill includes about $8 million for the state’s Franchise Tax Board to implement an individual mandate, but doesn’t actually contain language imposing the mandate. The bill that would reimpose the mandate, using definitions originally included in the federal law, passed the Assembly late last month, but faces opposition in the Senate.

Third, implementing the mandate imposes legal and logistical challenges. I argued in the Wall Street Journal last fall that states cannot require employers who self-fund health coverage to report their employees’ insurance coverage to state authorities. The mandate bill the Assembly passed does not include such a requirement.

Without a reporting requirement on employers, a mandate could become toothless, because the state would have difficulty verifying coverage to ensure compliance—people could lie on their tax forms and likely would not get caught. However, imposing a reporting regime, either through the mandate bill or regulations, would invite an employer to claim that federal labor law (namely, the Employee Retirement Income Security Act) prohibits such a state-based requirement.

More Spending on Subsidies

While the budget bill does not include an explicit insurance mandate, it does include more than $295 million to “provide advanceable premium assistance subsidies during the 2020 coverage year to individuals with projected and actual household incomes at or below 600 percent of the federal poverty level.”

Obamacare epitomized the problems that policy-makers face in subsidizing health insurance. The federal law includes a subsidy “cliff” at 400 percent of the poverty level. Households making just under that threshold can receive federal subsidies that could total as much as $5,000-$10,000 for a family, but if their income rises even one dollar above that “cliff,” they lose all eligibility for those subsidies.

By penalizing individuals whose incomes rise even marginally, the subsidy “cliff” discourages work. That’s one of the main reasons the Congressional Budget Office said Obamacare would reduce the labor supply by the equivalent of 2.5 million full-time jobs.

California decided to replace these work disincentives with yet more spending on subsidies. This year, the federal poverty level stands at $25,750 for a family of four—which makes 600 percent of poverty equal to $154,500. In other words, a family making more than $150,000 will now classify as “low-income” for purposes of the new subsidy regime.

Hypocrisy by Officials

The individual mandate bill gives a significant amount of authority for its implementation to Covered California, the state’s insurance exchange. The bill says the exchange will determine the amount of the mandate penalty, and determine who receives exemptions from the mandate.

Who runs California’s exchange? None other than Peter Lee, the man I previously profiled as someone who earns $436,800 per year, yet refuses to buy the exchange coverage he sells. Or, to put it another way, if the mandate passes, Lee will be standing in judgment of individuals who refuse to do what he will not—buy an Obamacare plan.

If you think that seems a bit rich, you would be correct. But it epitomizes the poor policy choices and hypocritical actions taken by officials to prop up Obamacare in California.

This post was originally published at The Federalist.

Will Disclosing Prescription Drug Prices in TV Ads Make Any Difference?

Why did the Trump administration last Monday propose requiring pharmaceutical companies to disclose their prices in television advertisements? A cynic might believe the rule comes at least in part because the drug industry opposes it.

Now, I carry no water for Big Pharma. For instance, I opposed their effort earlier this year to repeal an important restraint on Medicare spending. But this particular element of the administration’s drug pricing plan appears to work in a similar manner as some of the president’s tweets—to dominate headlines through rhetoric, rather than through substantive policy changes.

Applies Only to Television

The rule “seek[s] comment as to whether we should apply this regulation to other media formats,” but admits that the administration initially “concluded that the purpose of this regulation is best served by limiting the requirements” to television. However, five companies alone accounted for more than half of all drug advertisements in the past year. Among those five companies, the advertisements promoted 19 pharmaceuticals—meaning that new disclosure regime would apply to very few drugs.

If the “purpose of this regulation” is to affect pharmaceutical pricing, then confining disclosures only to television advertisements would by definition have a limited impact. If, however, the “purpose of this regulation” is primarily political—to force drug companies into a prolonged and public legal fight on First Amendment grounds, or to allow the administration to point to disclosures in the most prominent form of media to say, “We’re doing something on drug costs!”—then the rule will accomplish its purpose.

Rule Lacks Data to Support Its Theory

On three separate occasions, in the rule’s Regulatory Impact Analysis—the portion of the rule intended to demonstrate that the regulation’s benefits outweigh its costs—the administration admits it has very few hard facts: “We lack data to quantify these effects, and seek public comment on these impacts.”

It could encourage people to consume more expensive medicines (particularly if their insurance pays for it), because individuals may think costlier drugs are “better.” Or it could discourage companies from advertising on television at all, which could reduce drug consumption and affect people’s health (or reduce health spending while having no effect on individuals’ health).

Conservative think-tanks skewered several Obamacare rules released in 2010 for the poor quality and unreasonable assumptions in their Regulatory Impact Analyses. Although released by a different administration of a different party, this proposed regulation looks little different.

Contradictions on Forced Speech?

Finally, the rule refers on several occasions to the Supreme Court’s ruling earlier this year in a case involving California crisis pregnancy centers. That case, National Institute of Family and Life Advocates v. Becerra, overturned a California state law requiring reproductive health clinics, including pro-life crisis pregnancy centers, to provide information on abortion to patients.

The need for that distinction arises because the pharmaceutical industry will likely challenge the rule on First Amendment grounds as an infringement on their free speech rights. However, a pro-life administration attempting to force drug companies to disclose pricing information, while protecting crisis pregnancy centers from other forced disclosures, presents some interesting political optics.

A Political ‘Shiny Object’

Ironically enough, most of the administration’s actions regarding its prescription drug pricing platform have proven effective. Food and Drug Administration Commissioner Scott Gottlieb has helped speed the approval of generic drugs to market, particularly in cases where no other competitors exist, to help stabilize the marketplace.

Other proposals to change incentives within Medicare and Medicaid also could bring down prices. These proposals won’t have an immediate effect—as would Democratic blunt-force proposals to expand price controls—but collectively, they will have an impact over time.

This administration can do better than that. Indeed, they already have. They should leave the political stunts to the president’s Twitter account, and get back to work on more important, and more substantive, proposals.

This post was originally published at The Federalist.

Study Contradicts Claims of California’s Obamacare “Success”

Liberals have cited California as the prototypical Obamacare success story for years now, but a new study puts that assertion very much in doubt. Five years ago, even before Obamacare’s exchanges went live, The New York Times’ Paul Krugman claimed California would prove that “a program designed to help a lot of people can, strange to say, end up helping a lot of people — especially when government officials actually try to make it work.”

Reporters have chimed in with similar stories about Obamacare’s supposed success in California. During the presidential campaign in 2016, the Los Angeles Times reported that “California is emerging as a clear illustration of what the law can achieve.” The article quoted several insurers saying the state “did it right,” and had created stable insurance markets.

Emergency Rooms Are Getting More, Not Less, Use

The study, conducted by the California Health Care Foundation, examined emergency department usage over the ten years from 2006 to 2016. While the report, perhaps quite deliberately, didn’t highlight this conclusion — it mentioned Obamacare once, and only in passing — the data indicate that emergency department usage since Obamacare has not only not decreased, it has accelerated, rising at a faster rate than in prior years.

One chart tells the tale:

The study indicates that ER usage accelerated in the years immediately following Obamacare’s implementation, just as it shows Medicaid patients comprised a larger share of ER visits. From 2006 through 2016, Medicaid patients nearly doubled as a share of ER visitors, while ER visitors with private insurance and no insurance both declined:

Unfortunately, this chart does not reveal data for the years immediately before and after Obamacare implementation in 2014, making it tougher to draw direct conclusions. However, the 20 percentage point increase in ER visits by Medicaid patients (California calls its Medicaid program “Medi-Cal”) more than outweighs the 9 percentage point decline in self-pay and uninsured patients and the 4 percentage point decline in patients with other forms of coverage.

While private patients’ ER usage held relatively flat over the decade, the nearly 4 million increase in ER visits by Medicaid patients swamped the combined 863,000 fewer visits by self-pay and uninsured patients and patients with other coverage.

To put it bluntly, the raw data from the California study suggest the state has less of a problem with an overall increase in ER visits and much more of a problem with an explosion in Medicaid patient ER visits. That inconvenient truth might explain why the California Health Care Foundation didn’t highlight the impact of Medicaid, or Obamacare’s expansion of it, in the report itself.

California Study Echoes Oregon ‘Experiment’

In 2016, a group of economists released an updated analysis from Oregon, which concluded that ER usage increased, not decreased, by 40 percent for participants in the Medicaid expansion. The increased ER usage persisted for at least two years, making it unlikely that it existed solely due to “pent-up demand” — i.e., individuals using their new insurance coverage to have lingering but previously untreated problems examined.

Contrary to the conventional wisdom that giving patients a more normal source of coverage would decrease ER utilization, the Oregon study found that usage of health care services increased across-the-board, including emergency department visits.

The California study did not reveal whether access problems resulted in the 170 percent increase in ER visits by Medicaid patients. The state has notoriously stingy payment rates for Medicaid providers, which could impede patients from accessing primary care, forcing them to use the emergency room instead.

At minimum, however, the study once again demonstrates how Obamacare has failed to deliver on its promise to lower the cost of health care by providing that care in a more timely fashion and at the most efficient location. The increase in ER usage by Medicaid patients also raises questions about whether an insurance card provides access to actual health care.

Five years ago, I wrote about how Krugman’s claims of California’s Obamacare success echoed The Mamas and the Papas: little more than California Dreamin’. Last week’s study reiterates how liberal claims that the state represents an Obamacare “success story” remain nothing more than a pipe dream.

This post was originally published at The Federalist.

Who Will Regulate the Regulators?

My recent investigation into insurance commissioners failure’ to consider, let alone prepare for, a new presidential administration withdrawing unconstitutional cost-sharing reduction payments when examining rates for the 2017 plan year included one particular story worth highlighting.

In Montana, the insurance commissioner branded Blue Cross Blue Shield’s premium increase as “unreasonable,” in part because it wished to prepare for an eventuality—namely, withdrawal of the cost-sharing reduction payments—that the commissioner herself ignored.

Insurer’s Request for Contingencies

As noted last month, Blue Cross Blue Shield of Montana first requested that state regulators permit it to stop reducing cost-sharing to low-income beneficiaries if the federal government withdrew the payments reimbursing insurers for those discounts. However, federal regulators rightly noted that Obamacare requires insurers to lower cost-sharing for qualified individuals, regardless of whether the federal government provides reimbursement for this, making this proposal impossible to implement.

Because it could not stop lowering cost-sharing if the federal reimbursements ceased, Blue Cross Blue Shield requested a higher premium increase for 2017, to cushion against the risk of an unfunded mandate—the federal government requiring the company to lower cost-sharing without reimbursing it for that. However, Montana’s insurance commissioner, Monica Lindeen, dubbed the carrier’s proposed premium increase “unreasonable.”

In a letter of deficiency posted on the commission’s website, Lindeen found several portions of the premium increase proposed by Health Care Services Corporation (Blue Cross Blue Shield of Montana’s parent company) unreasonable, including the portion linked to uncertainty over the cost-sharing reduction payments:

HCSC has added 4.2% to its rates because it believes that the government will lose a lawsuit that concerns the validity of the appropriation for cost-sharing reductions and that CMS [the federal Centers for Medicare and Medicaid Services] will not reimburse QHP [qualified health plan] issuers for cost sharing reductions in 2017. The lawsuit is currently pending appeal in the federal circuit court. Experts, including industry experts, agree that this case will not be resolved until at least 2018 and no one knows what the final outcome will be. HCSC appears to be the only health insurer in the country taking the position that its rates will be negatively impacted by this lawsuit in 2017….

In the years since CSI [the Commissioner of Securities and Insurance] has been reviewing health insurance rates, the CSI has always maintained the position that insurers may not base rating assumptions on speculation concerning the outcome of pending litigation. HCSC has stated that it will remove this rating assumption if the CSI allows HCSC to include illegal language in its policy. As the insurance regulator for this state, I cannot agree to that proposal. Raising 2017 rates on the basis of this assumption is unreasonable.

‘Unreasonable’ Regulators

The federal government withdrew the payments in October. Had the carrier not raised premiums pre-emptively to account for the possibility that the payments might disappear, it would have joined other insurers in incurring as much as $1.75 billion in losses over the final quarter of this calendar year.

Lindeen’s actions proved “unreasonable” in several respects. First, contra her claims that “experts agree” that the dispute over the payments “will not be resolved until at least 2018,” I specifically wrote in May 2016 that the incoming presidential administration could halt the payments “almost immediately.” The letter of deficiency does not even attempt to address this set of circumstances—the events that actually transpired—raising the obvious question of which “experts” Lindeen consulted, or whether indeed she consulted any “experts” at all.

Why It Matters

Liberals have worked to publicly embarrass insurance companies for years. The Obama administration stoked outrage over Anthem’s proposed 39 percent premium increase in California in early 2010 to marshal support for Obamacare’s passage, after Scott Brown’s special election Senate win made its prospects seem bleak.

The Left wants to make such “naming and shaming” de rigueur. California recently enacted a drug transparency law requiring pharmaceutical companies to justify price increases, a measure other states wish to emulate. But perhaps not surprisingly, liberals have yet to explain exactly what should happen when regulators get it wrong, as so clearly happened in Montana, where Lindeen arrived at a conclusion ultimately disproven by events.

At minimum, the Trump administration has a role to play in regulating the regulators, as the Department of Health and Human Services (HHS) must certify each state has an “effective” rate review program. Federal authorities should ask Montana’s insurance commissioner why she considered Blue Cross’ assumptions regarding cost-sharing reduction payments “unreasonable” when Blue Cross and not she ended up being correct. Moreover, given the larger regulatory debacle over cost-sharing payments, HHS has reason to write to every state and ask why they all made the mistaken assumption that unconstitutional payments to insurers would continue.

While this conservative would much prefer states regulating insurance markets rather than the federal government, the incompetence on display over cost-sharing reductions demonstrates the need for increased accountability among state authorities. If liberals wish to persist in their efforts to “hold industry accountable” for raising prices, perhaps they should explain how they will hold regulators accountable when those regulators drop the proverbial ball. Better yet, they should stop trying to scapegoat insurance companies for higher health costs, and work instead towards reducing them.

This post was originally published at The Federalist.

Exclusive: Congress Should Investigate, Not Bail Out, Health Regulators Who Risked Billions

What if a group of regulators were collectively blindsided by a decision that cost their industry billions of dollars? One might think Congress would investigate the causes of this regulatory debacle, and take steps to ensure it wouldn’t repeat itself.

Think again. President Trump’s October decision to terminate cost-sharing reduction (CSR) subsidy payments to health insurers will inflict serious losses on the industry. For October, November, and December, insurers will reduce deductibles and co-payments for certain low-income exchange enrollees, but will not receive reimbursement from the federal government for doing so. America’s Health Insurance Plans, the industry’s trade association, claimed in a recent court filing that insurance carriers will suffer $1.75 billion in losses over the remainder of 2017 due to the decision.

As Dave Anderson of Duke University recently noted, the “hand grenade” of stopping the cost-sharing reduction payments, “if it was thrown in January or February of this year, would have forced a lot of carriers to do midyear exits and it would have destroyed the exchanges in some states.” Yet Congress has asked not even a single question of regulators why they did not anticipate and plan for this scenario—a recipe for more costly mistakes in the future.

A Brewing Legal and Political Storm

The controversy surrounds federal payments that reimburse insurers for lower deductibles, co-payments, and out-of-pocket expenses for qualifying low-income households purchasing exchange coverage. While the text of Obamacare requires the U.S. Department of Health and Human Services to establish a program to reimburse insurers for providing the discounts, it nowhere includes an explicit appropriation for such spending.

As the exchanges launched in 2014, the Obama administration began making CSR payments to insurers. However, later that year, the House of Representatives, viewing a constitutional infringement on its “power of the purse,” sued to stop the executive from making the payments without an explicit appropriation. In May 2016, Judge Rosemary Collyer ruled the payments unconstitutional absent an express appropriation from Congress.

The next President could easily wade into this issue. Say a Republican is elected and he opts to stop the Treasury making payments related to the subsidies absent an express appropriation from Congress. Such an action could take effect almost immediately….It’s a consideration as carriers submit their bids for next year that come January 2017, the policy landscape for insurers could look far different.

One week after my article, Collyer issued her ruling calling the subsidy payments unconstitutional. At that point, CSR payments faced threats from both the legal and political realms. On the legal front, the ongoing court case could have resulted in an order terminating the payments. On the political side, the new administration would have the power to terminate the payments unilaterally—and it does not appear that either Hillary Clinton or Trump ever publicly committed to maintaining the payments upon taking office.

Yet Commissioners Stood Idly By

In the midst of this gathering storm, what actions did insurance commissioners take last year, as insurers filed their rates for the 2017 plan year—the plan year currently ongoing—to analyze whether cost-sharing payments would continue, and the effects on insurers if they did not? About a week before the Trump administration officially decided to halt the payments, I submitted public records requests to every state insurance commissioner’s office to find out.

Two states (Indiana and Oregon) are still processing my requests, but the results from most other states do not inspire confidence. Although a few states (Illinois, Utah, and California’s Department of Managed Health Care) withheld documents for confidentiality or logistical reasons, I have yet to find a single document during the filing process for the 2017 plan year contemplating the set of circumstances that transpired this fall—namely, a new administration cutting off the CSR payments.

In many cases, states indicated they did not, and do not, question insurers’ assumptions at all. North Dakota said it does not dictate terms to carriers (although the state did not allow carriers to re-submit rates for the 2018 plan year after the administration halted the CSR payments in October). Wyoming said it did not issue guidance to carriers on CSRs “because that’s not how we roll.” Missouri did not require its insurers to file 2017 rates with regulators, so it would have no way of knowing those insurers’ assumptions.

Other states admitted that they did not consider the possibility that the incoming administration would, or even could, terminate the CSR payments. North Carolina said it did not think the court case was relevant, or that cost-sharing reduction payments would be an issue. Massachusetts’ insurance Connector (its state-run exchange) responded that “there was no indication that rates for 2017 were affected by the pendency of House v. Burwell,” the case Collyer ruled on in May 2016.

Despite the ongoing court case and the deep partisan disputes over Obamacare, many commissioners’ responses indicate a failure to anticipate difficulties with cost-sharing reduction payments. Mississippi stated that, during the filing process for 2017, “CSRs weren’t a problem then, as they were being funded.” Minnesota added that “it was not until the spring of 2017 that carriers started discussing the threat [of CSR payments being terminated] was a real possibility.” Nebraska stated that “I don’t think that there’s anyone who allowed for the possibility of non-payment of CSRs for plan year 2017. We were all waiting for Congress to act.”

However, as an e-mail sent by the National Association of Insurance Commissioners (NAIC) to state regulators demonstrates, federal authorities at the Centers for Medicare and Medicaid Services (CMS) stated their “serious concerns” with the Texas and New Mexico proposals. Federal law requires insurers to reduce cost-sharing for qualifying beneficiaries, regardless of the status of the reimbursement program, and CMS believed the contingency language—which never went into effect in either Texas or New Mexico—violated that requirement.

In at least one case, an insurer raised premiums to reflect the risk that CSR payments could disappear in 2017. Blue Cross Blue Shield of Montana submitted such request to that state’s insurance authorities. However, regulators rejected “contingent CSR language”—apparently an attempt to cancel the reduced cost-sharing if reimbursement from Washington was not forthcoming, a la the Texas and New Mexico proposals. The insurance commissioner’s office also objected to the carrier’s attempt to raise premiums over the issue: “We will not allow rates to be increased based on speculation about outcomes of litigation.”

Of course, had insurers requested, or had regulators either approved or demanded, premium increases last year due to uncertainty over cost-sharing reduction payments, they would not now face the prospect of over $1 billion in losses due to non-payment of CSRs for the last three months of 2017. But had regulators approved even higher premium increases last year, those increases likely would have caused political controversy during the November elections.

As it was, news of the average 25 percent premium increase for 2017 gave Trump a political cudgel to attack Clinton in the waning days of the campaign. One can certainly question why Democratic insurance commissioners who did not utter a word about premium increases and CSR “uncertainty” during Clinton’s campaign suddenly discovered the term the minute Trump was elected president.

However, at least some ardent Obamacare supporters just did not anticipate a new administration withdrawing cost-sharing reduction payments. Washington state’s commissioner, Mike Kreidler, published an op-ed last October regarding the House v. Burwell court case. He did so at the behest of NAIC consumer representative Tim Jost, who wanted to cite Kreidler’s piece in an amicus curiae brief during the case’s appeal. But despite their focus on the court case regarding CSRs, it appears neither Jost nor Kreidler ever contemplated a new administration withdrawing the payments in 2017.

Congressional Oversight Needed

The evidence suggests that not a single insurance commissioner considered the impact of a new administration withdrawing cost-sharing reduction payments in 2017, a series of decisions that put the entire health of the individual insurance market at risk. What policy implications follow from this conclusion?

First, it undercuts the effectiveness of Obamacare’s “rate review” process. That mechanism requires states to evaluate “excessive” premium increases. However, the program’s evaluation criteria do not explicitly include policy judgments such as those surrounding CSRs. Moreover, the political focus on lowering “excessively” high premium increases might result in cases where regulators approve premium rates set inappropriately low—as happened in 2017, where no carriers priced in a contingency margin for the termination of CSR payments, yet those payments ceased in October.

As noted above, Montana’s regulators called out that state’s Blue Cross Blue Shield affiliate for proposing a rate increase relating to CSR uncertainty. The state’s insurance commissioner, Monica Lindeen, issued a formal “letter of deficiency” in which she stated that “raising rates on the basis of this assumption [i.e., loss of cost-sharing reduction payments] is unreasonable.” But events proved Lindeen wrong—those payments did disappear in 2017. Yet the insurer in question has no recourse after their assumptions proved more accurate than Lindeen’s—nor, for that matter, will Lindeen face any consequences for the “unreasonable” assumptions she made.

Second, it suggests an inherent tension between state authorities and Washington. Several regulators specifically said they looked to CMS’ advice on the cost-sharing reduction issue. Iowa requested guidance from Washington, and Wisconsin said the status of the payments was “out of our hands.” But given the impending change of administrations, any guidance CMS provided in the spring or summer of 2016 was guaranteed to remain valid only through January 20, 2017—a problem for regulators setting rates for the 2017 plan year.

Obamacare created a new layer of federal oversight—and federal policy—surrounding regulation of insurance, which heretofore had laid primarily within the province of the states. The CSR debacle resulted from the conflict between those two layers. Unless and until our laws reconcile those tensions—in conservatives’ case, by repealing the Obamacare regime and returning regulation to the states, or in liberals’ preferred outcome, by centralizing more regulatory authority in Washington—these conflicts could well recur.

Third, and perhaps most importantly, it should spark Congress to examine state oversight of health insurance in greater detail. The fact that insurance commissioners escaped the equivalent of a Category 5 hurricane—the withdrawal of CSR payments in January—and struggled through a mere tropical storm with payments withdrawn in October instead, had no relevance on their regulatory skill—to the contrary, in fact.

Unfortunately, Congress has demonstrated little interest in examining why the regulatory apparatus fell so short. The same Democratic Party that investigated regulators and bankers following the financial crisis has shown little interest in questioning why insurers and insurance regulators failed to anticipate the end of cost-sharing reduction payments. With their focus on getting Congress to appropriate funds restoring the CSR payments President Trump terminated, insurance commissioners’ lack of planning and preparation represents an inconvenient truth that Democrats would rather ignore.

Likewise, Republicans who wish to appropriate funds for the cost-sharing reduction payments have no interest in examining the roots of the CSR debacle. In September, Sen. Lamar Alexander (R-TN) convened a hearing of the Health, Education, Labor, and Pensions (HELP) Committee to take testimony from insurance commissioners on “stabilizing” insurance markets.

At the hearing, Alexander did not ask the commissioners why they did not predict the “uncertainty” surrounding cost-sharing reductions last year. HELP Committee Ranking Member Patty Murray (D-WA) asked Kreidler, her state’s insurance commissioner, about regulators’ “guessing games” regarding the status of CSRs with regard to the 2018 plan year. But neither she nor any of the members asked why those regulators made such blind and ultimately incorrect assumptions last year, by not even considering a scenario where CSR payments disappeared during the 2017 plan year.

Alexander and Murray claim the legislation they developed following the hearing, which would appropriate CSR funds for two years, does not represent a “bailout” for the insurance industry. But the fact remains that last fall, when preparing for the 2017 plan year, insurance regulators dropped the ball in a big way.

Ignoring their inaction, and appropriating funds for cost-sharing reductions without scrutinizing their conduct, would effectively bail out insurance commissioners’ own collective negligence. Congress should think twice before doing so, because next time, a regulatory debacle could have an even bigger impact on the health insurance industry—and on federal taxpayers.

This post was originally published at The Federalist.

Medicaid as a “Persistently Inferior” Form of Health Coverage

How many individuals would knowingly want to enroll in a form of health coverage with “persistently inferior” outcomes? It’s a good question, as a new study released last week suggests that Medicaid provides those persistently inferior outcomes in the nation’s largest state, raising more questions about the program that represents the bulk of the coverage expansion under Obamacare.

What This Study Looked Into

The study, published in the Journal of the American Medical Association Oncology, used a California data registry to compare cancer survival outcomes across multiple forms of insurance and nearly two decades (1997-2014). The study classified patients based on four forms of insurance: Private coverage; Medicare; other public coverage, about three-quarters (74 percent) of whom were Medicaid patients; and the uninsured.

The study examined five-year cancer survival rates for the five most common cancers in California: breast, prostate, lung, colorectal, and melanoma. As the chart demonstrates, the study looked at survival rates over three separate periods (1997-2002, 2003-2008, and 2009-2014) to determine trends over time.

And The Results Were

Overall, the study found “substantial and persistent disparities in survival for patients with either no or other public insurance compared with private insurance for all 5 of the cancer sites examined.” In general, these disparities increased rather than decreased over time: “with few exceptions, survival disparities were largest among those diagnosed during 2009-2014 relative to the two earlier time periods.”

As to whether patients with Medicaid coverage suffered worse health outcomes than the uninsured, the study provided a decidedly mixed verdict:

Our findings suggest that, while survival falls short of that achieved by patients with private insurance, public insurance such as Medicaid does confer a survival benefit over no insurance for breast, prostate, and lung cancer. However, there was little or no benefit of public insurance over no insurance for colorectal cancer or melanoma, and the lack of improvement in survival is a concern. These findings suggest that the health care provided to publically [sic] insured patients with cancer in California is not adequately meeting their needs.

Overall, the authors concluded that Medicaid provided “persistently inferior survival” outcomes for cancer patients—far from a ringing endorsement.

Why This Medicaid Study Matters

To be fair, the study’s harsh conclusions could stem in part from circumstances determined by the state the researchers studied. While Medicaid programs generally offer physicians low reimbursement rates, California has a reputation for notoriously stingy payments.

That said, the results certainly do not provide much encouragement to the many people newly enrolled in Medicaid as a result of Obamacare. While enrollment in Medicaid has exploded under the law, the program’s health outcomes leave much to be desired. Beneficiaries may sign up for Medicaid because the program offers few out-of-pocket costs to them, but to borrow the old phrase, they may be getting exactly what they paid for.

This post was originally published at The Federalist.

Judge’s Ruling Prevents Sabotage…Of the Constitution

Late this afternoon, a federal judge in San Francisco issued a ruling in the recent court case surrounding cost-sharing reduction (CSR) payments. Judge Vince Chhabria—notably, an appointee of President Obama—denied a request by Democratic Attorneys General for a preliminary injunction demanding that the Trump Administration keep making the CSR payments to insurers. By denying the request for an injunction, Judge Chhabria’s ruling illustrates how the Obama Administration sabotaged the Constitution by spending money without a congressional appropriation.

Notably, Judge Chhabria’s ruling came on the merits of the case for an injunction—he rejected arguments by the Justice Department that the states lacked standing to sue, or that they should have filed their case in the District of Columbia, where the House v. Hargan lawsuit initiated in 2014 remains pending. The judge observed repeatedly that “it appears initially that the Trump Administration has the stronger argument.” Specifically, he stated that the case differed from King v. Burwell—where the Supreme Court ruled that language that appeared clear in isolation (“Exchange established by the State”) was actually ambiguous in the context of the broader statute. Judge Chhabria concluded that, at this stage of the case, it appears the Administration has the stronger argument that the cost-sharing reduction payments and premium subsidies are two separate and distinct programs—meaning that the Obama Administration violated the Constitution by using an appropriation for the latter to spend money on the former.

On whether or not the states would suffer irreparable harm without a preliminary injunction, Judge Chhabria noted (as this author has done previously) that cutting off CSR payments would actually increase overall spending on health subsidies, and reduce the number of uninsured—outcomes that liberals would normally support. He pointed out this scenario to the plaintiffs—and their response, as cited in the ruling, speaks for itself:

When counsel for the State of California was confronted at oral argument with the fact that the relief sought by the states [i.e., a preliminary injunction] could cause this harm [i.e., a reduction in subsidy spending], he responded by suggesting that perhaps the Court could order the Administration to resume the CSR payments even while the states continue to allow the insurance companies to charge higher premiums on the exchanges, with the idea that the numbers would reconciled later, through some unexplained process. In other words, allow the insurance companies to collect double payments in 2018. This argument does not even merit a response.

But it does raise the question: why, in light of this discussion, have all these Attorneys General rushed to court seeking an emergency ruling against President Trump?

The answer might best be explained by the last two words: “President Trump.” To demonstrate themselves as part of “The Resistance,” the Democratic Attorneys General were willing to bring a case that might actually harm their constituents more than it helps them.

In his conclusion, Judge Chhabria had little patience for the liberal strategy of “talking down Obamacare”—making “doom-and-gloom” predictions prior to open enrollment, just to score political points by accusing President Trump of “sabotage:”

If the states are so concerned that people will be scared away from the exchanges by the thought of higher premiums, perhaps they should stop yelling about higher premiums. With open enrollment just days away, perhaps the states should focus instead on communicating the message that they have devised a response to the CSR payment termination that will prevent harm to the large majority of people while in fact allowing millions of lower-income people to get a better deal on health insurance in 2018. [Emphasis mine.]

Which raises an important question: Do Democrats actually WANT Obamacare to succeed—or do they secretly want it to fail, because they believe President Trump will get the blame if it does?

Regardless, today’s ruling upholds the argument that Obamacare does NOT include an appropriation for cost-sharing reduction payments, and that the Obama Administration sabotaged the Constitution and the rule of law by spending funds never appropriated by Congress. Perhaps now that one of President Obama’s own judicial nominees has ratified that conclusion, people can focus on that sabotage, instead of the supposed “sabotage” of Obamacare.

Five Factors That Could Interfere with Graham-Cassidy’s State Health Care Waivers

Some conservative writers—including others who write for this publication—have opined that the legislation written by Sens. Lindsay Graham (R-SC) and Bill Cassidy (R-LA) offers states the ability to innovate and reform their health care systems. Most conservatives, including this one, consider state flexibility an admirable goal.

Certainly reforming Medicaid—through a block grant or per capita cap, coupled with additional flexibility to allow states to manage their programs more freely—would go a long way towards improving care, and reducing health care costs.

1. Subsidizing Moral Hazard

The language on the top of page 15 explicitly links waivers to funding from the new system of block grants the bill creates. Any waiver will only apply to 1) coverage provided by an insurer receiving block grant funding and 2) coverage “provided to an individual who is receiving a direct benefit (including reduced premium costs or reduced out-of-pocket costs)” under the block grant.

This requirement that each and every person subjected to a non-Obamacare-compliant plan must receive a “direct benefit” subsidized by federal taxpayers has several potential perverse consequences. By definition, it encourages moral hazard. Because individuals will know that if they are subjected to health underwriting, or an otherwise noncompliant plan, they must receive federal subsidies, it will encourage them not to buy health insurance until they need it.

It means that either states will have to extend taxpayer-subsidized benefits to highly affluent individuals (allowing them to buy noncompliant plans), or have to permit only low- and middle-income families to buy noncompliant plans (to restrict the subsidies to low-income families). Both scenarios seem politically problematic to the point of being untenable.

When considering the two considerations above—will the bill lower premiums, and will it work?—this provision alone seems destined to preclude either from occurring. The moral hazard could increase premiums, not lower them, driving more healthy people out of the marketplace by telling them they will receive subsidies if and when they become sick and need coverage. The requirement that every person subjected to a waiver must receive subsidized benefits appears potentially destabilizing to insurance markets, while also creating political problems and administrative complexity.

2. Encouraging Lawsuits

The provision on page 12 requiring states applying for waivers to describe “how the state intends to maintain access to adequate and affordable health insurance coverage for individuals with pre-existing conditions” presents two concerns. First, a future Democratic administration could use rulemaking to define “adequate and affordable health insurance coverage” so narrowly—prohibiting co-payments or cost-sharing of more than $5, for instance—that no state could maintain access to “adequate and affordable” coverage, thereby eliminating their ability to apply for and receive a waiver.

Second, courts have ruled that Medicaid waiver applications are subject to judicial review, a standard that would presumably apply to the Graham-Cassidy waivers as well. While a Congressional Research Service report notes that courts have traditionally given deference to the Centers for Medicare and Medicaid Services (CMS) on waiver applications, the Ninth Circuit Court of Appeals in 1994 did in fact strike down a California waiver application that CMS had previously approved.

If a state receives a waiver, it seems highly likely that individuals affected, with the strong encouragement of liberal activists, will seek relief in court, and point to the page 12 language to argue that the court should strike down the waiver for not providing “adequate and affordable coverage” to people with pre-existing conditions. At minimum, the ensuing legal uncertainty could place states’ waiver programs in limbo for months or even years. And only one judge, or one circuit court, that views the pre-existing condition language as applying to more than states’ waiver application could undermine the program.

Congress could theoretically include language in Graham-Cassidy precluding judicial review of administrative decisions regarding waivers, as Democrats did 13 separate times in Obamacare. But on this particular bill, such a provision likely would not pass muster with the “Byrd rule” that applies to budget reconciliation measures.

Specifically, language prohibiting judicial review would have no (or a minimal) budgetary impact, and would represent matter outside the committees with jurisdiction over the reconciliation bill (Senate Judiciary versus Senate Finance and HELP Committees), both points of order that would see the provision stricken absent 60 Senate votes (which the bill does not have) to retain it.

Given the ongoing political controversy surrounding pre-existing conditions, some moderates may view the inclusion of this phrase as critical to their support for the bill. But its inclusion could ultimately undermine the entire waiver process and one of conservatives’ prime goals from the “repeal-and-replace” process, namely relief from Washington-imposed regulatory burdens.

3. Encourages Activist Judges and Bureaucrats

4. Allows States to Waive Only Some Regulations

While states may waive some Obamacare regulations, they can’t waive others, an internal inconsistency that belies the promise of “flexibility.” For instance, states cannot waive the under-26 mandate if they so choose. Moreover, language on page 15 prohibiting a waiver of “any requirement under a federal statute enacted before January 1, 2009” precludes states from waiving regulations that preceded Obamacare, such as those related to mental health parity.

If the sponsors believe in state flexibility, they should allow states to waive all federal insurance regulations, even ones, such as the under-26 mandate or mental health parity, they may personally support. Or better yet, they should move to repeal the regulations entirely, and let states decide which ones they want to re-enact on the state level.

5. No Funding Equals No Waivers

Because the bill explicitly ties waivers to federal funding, as noted above, the “cliff” whereby block grant funding ends in 2027 effectively ends waiver programs then as well. Such a scenario would put conservative policy-makers in the perverse position of asking Washington to increase federal spending, because any regulatory relief under Obamacare would otherwise cease.

Meaning of Federalism

The potential concerns above demonstrate how Graham-Cassidy may not provide full flexibility to states. Whether through cumbersome administrative requirements, a future Democratic administration, court rulings, or key omissions, states could find that as written, the bill’s promise of flexibility might turn into a mirage.

Given that, it’s worth remembering the true definition of federalism in the first place. Federalism should not represent states getting permission from Washington to take certain actions (and only certain actions). It should represent the people delegating some authority to the federal government, and some to the states. A bill that looked to do that—to remove the Obamacare regulatory apparatus entirely, and allow states to decide whether and what portions of the law they wish to reimpose—would help to restore the principles of federalism, and a true balance between Washington and the states.

This post was originally published at The Federalist.

A “Grand Bargain” on Obamacare Repeal?

To know where you’re going, it helps to recognize where you’ve been. Examining the causes of Republicans’ legislative setbacks on health care—including last month’s dramatic failure of a “skinny” repeal bill on the Senate floor—provides the glimmer of a path forward for a legislative “repeal-and-replace” package, if they are bold enough to take it.

In both the House and the Senate, debate focused on a push-pull between two competing issues: The status of Medicaid expansion in the 31 states that accepted it, and what to do about Obamacare’s regulatory regime. During the spring and summer, congressional leaders attempted messy compromises on each issue, phasing out the higher federal match for Medicaid expansion populations over time, while crafting complex processes allowing states, insurers, or both to waive some—but not all—of Obamacare’s regulatory requirements.

A “grand bargain” in this vein would give Senate moderates a clear win on Medicaid expansion, while providing conservatives their desired outcome on Obamacare’s regulations. For this conservative at least, the regulations represent the heart of the law, prompting both its spending on exchange subsidies—to offset the higher premium costs from the regulatory mandates—and the taxes needed to fund that spending. Expelling the regulations from the federal statute books would represent a clear step towards the promise of repealing Obamacare “root and branch,” and return control of health insurance to the states, where it lay from 1947’s McCarran-Ferguson Act until Obamacare.

Federal Regulations Are Driving Up Health Costs

When coupled with structural reforms to Medicaid—a block grant or per capita caps—included in the House and Senate bills, repealing the federal regulations would enable the “laboratories of democracy” to reassert control over their health insurance markets and Medicaid programs. It would also contrast favorably with a recent proposal introduced by senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA). While Graham claims his plan would “empower each individual state to choose the path that works best for them,” in reality it would retain federal dictates regarding pre-existing conditions—the most costly of all the Obamacare mandates.

In a sad irony, some of the same senators who want Congress to respect their states’ decisions to expand Medicaid also want to dictate to other states—as the Graham-Cassidy plan does—how their insurance markets should function. But the true test of federalism applies not in the principle’s convenience, but in its inconvenience.

Yes, This Idea Is Imperfect

To be sure, even this attempted “grand bargain” includes noteworthy flaws. Retaining the enhanced Medicaid match encourages states to prioritize expansion populations over individuals with disabilities in traditional Medicaid, and may lure even more states to accept the expansion. Keeping the higher Medicaid spending levels would preclude repealing all of Obamacare’s tax increases. And the Senate parliamentarian may advise that repealing Obamacare’s regulations does not comport with the budget reconciliation process. But despite the obvious obstacles, lawmakers should seriously explore this option. After Republicans promised repeal for four straight election cycles, the American people deserve no less.

Throughout the repeal process, conservatives have bent over backwards to accommodate moderates’ shifting legislative goalposts. When moderates objected to passing the repeal legislation all but one of them voted for two years ago, conservatives helped construct a “repeal-and-replace” bill. When moderates wanted to retain the Medicaid expansion in their states—even though the 2015 repeal bill moderates voted for eliminated it entirely—conservatives agreed, albeit at the traditional match rates. And when Senate moderates complained, conservatives agreed to a longer phase-out of the higher match rate, despite justifiable fears that the phase-out would never occur.

Winston Churchill purportedly claimed that Americans will always do the right thing—once they have exhausted every other possibility. This “grand bargain” may not represent the “right” outcome, or the best outcome. But conservatives have exhausted many other possibilities in attempting to come to an agreement. Perhaps moderates will finally come to accept federalism—giving states a true choice over their insurance markets, rather than trying to dictate terms—as the solution to keeping their promise to the American people and repealing Obamacare.

This post was originally published at The Federalist.

Yes, Obamacare Really Does Disadvantage Individuals with Disabilities

My article last week regarding disability groups’ political and policy views prompted some comments and criticisms on Twitter. Rather than trying to explain detailed subjects in bursts of 140-character tweets, I considered it best to compile them into a longer-form article.

To summarize my prior work: Obamacare provides states with a greater incentive to expand Medicaid to able-bodied adults than to cover services for individuals with disabilities. States receive a 95 percent match this year (declining to 90 percent in 2020 and all future years) to cover the able-bodied, but a match ranging from 50-75 percent to cover individuals with disabilities, while more than half a million are on waiting lists to receive home or attendant care.

Many of the responses I discuss in greater detail below attempt to obscure two separate and distinct issues: The question of the amount of funding for programs versus the priorities within those programs.

As a conservative, I’m likely to disagree with liberals on the ideal size of many government programs, but I thought I would at least agree with them that individuals with disabilities should receive precedence within those programs. However, Obamacare actually tilted Medicaid’s preference away from individuals with disabilities, which makes disability groups’ silence on that front surprising.

There Is No Correlation Between Waiting Lists and Medicaid Expansion

The timeliest rebuttal comes from a story on a long-term care report none other than AARP released yesterday. Susan Reinhard with that organization—no right-wing conservative group, by any stretch—said that

Many states have struggled to expand home- and community-based options for Medicaid enrollees needing long-term care because that is an optional benefit. Nursing homes are mandatory under federal law. While states focus on Medicaid coverage for children and families — as well as non-disabled adults covered by the Medicaid expansion under the Affordable Care Act — adults with disabilities have received less attention. ‘Long-term care is a stepchild of the program and not a top focus for states,’ she said. (emphasis mine.)

That statement notwithstanding, several people cited two different analyses that compare states’ decisions on expansion to the able-bodied and their waiting lists for home-based care for individuals with disabilities. But each of those “studies” (based on only one year of data available) take an overly simplistic approach, and therefore don’t get at the core issue of the extent to which the skewed incentives Obamacare created have encouraged states to prioritize the able-bodied over those with disabilities.

A state’s decision to expand Medicaid to the able-bodied, or reduce its waiting lists for individuals with disabilities, depends on myriad factors. For instance:

  • A wealthy state with a greater tax base would have more resources both to expand Medicaid to the able-bodied and to reduce its waiting list of individuals with disabilities, while a poorer state with a smaller tax base might not have resources to do either;
  • A state with “bad” demographics (e.g., an older and sicker population), or higher costs for health and personal care services, might have more difficulty reducing their Medicaid waiting lists;
  • A state may face other fiscal pressures—controversy over school funding, a natural disaster, a pension crisis—that could affect overall Medicaid spending.

Numerous variables affect states’ budget choices, and therefore their Medicaid waiting lists. The “studies” controlled for exactly none of them. They examined whether a state expanded Medicaid and the total number of people on a state’s waiting list, and that’s it.

Moreover, under Obamacare, all states receive the same (higher) federal match to cover able-bodied adults—another change in policy (prior to Obamacare, all Medicaid match rates were based on states’ relative income) skewing the balance in favor of wealthier expansion states. Yet, as noted above, the analyses claiming no correlation between expansion and Medicaid waiting lists didn’t even attempt to control for these variables—or any other.

Therefore, in the absence of a quality study examining the issue, I’ll go with something far simpler: Common sense. If you’re a state that wants to spend more money on Medicaid, and you can do something (i.e., cover the able-bodied) that gives you 95 cents on the dollar, or something (i.e., reduce waiting lists for individuals with disabilities) that gives you 50 cents on the dollar, which are you going to do first?

I thought so. The incentives in Obamacare strongly favor coverage of the able-bodied over coverage for individuals with disabilities. And no number of crude analyses attempting to provide retroactive justification for this bad policy can hide that fact.

Waiting Lists Are Worst In Two Non-Expansion States

This comment reinforces the crudeness of the analysis being cited. All else being equal, as the second- and third-largest states in the Union, Texas and Florida would be expected to have a larger number of people on its waiting lists for home- and community-based services than a smaller expansion state like Connecticut. All else isn’t equal, of course, but did the analysts attempt to control for these kinds of factors? Nope. They examined raw waiting list numbers, rather than waiting lists as a percentage of the population.

But just suppose for a second that the commenters above are correct, and there is no correlation between expansion to the able-bodied and waiting lists for home-based care. That means that the greater incentives Obamacare gives to states to cover the able-bodied—and while the advocacy community might not want to admit it, Obamacare clearly does give states greater incentives to cover the able-bodied—didn’t affect state behavior, or decisions about whether to reduce disability waiting lists at all.

In that case, why has the disability community expressed such outrage about the impact of per capita caps or block grants on Medicaid beneficiaries with disabilities? If states make decisions without considering federal incentives—the point of the claims that there is no correlation between expanding Medicaid to the able-bodied and longer waiting lists for individuals with disabilities—then why also claim that “cost-shifting to states will force massive cuts in Medicaid services?” Why wouldn’t states shift around resources to protect individuals with disabilities—what the disability community claims that states did to reduce waiting lists even while expanding Medicaid under Obamacare?

There are really only two credible possibilities:

  • States are affected by incentives, therefore Obamacare—by giving states a higher match to cover the able-bodied—encouraged discrimination against individuals with disabilities; or
  • States are not affected by incentives, and therefore the per capita caps—which generate a comparatively small amount of savings in the House repeal bill—will have little impact, because states will re-prioritize their budgets to protect the most vulnerable.

It’s therefore worth asking why some appear to be trying to argue both sides of this question, and doing so in a way that neatly lines up with partisan lines—trying to ignore Obamacare’s skewed incentives, while roundly castigating the House Republican bill for incentives that will “force massive cuts in Medicaid.”

Republicans’ Bill Would Cut Program Helping People Live at Home

This is a true statement: Section 111(2) of the American Health Care Act, House Republicans’ “repeal-and-replace” bill, would sunset the enhanced match for the Community First Choice program on January 1, 2020. That option provides states with a 6 percent increase in their federal match for home- and community-based services, including to individuals with disabilities. But here again, raising this issue demonstrates the inherent disconnect between the incentives being offered to states, and the disability community’s responses to those incentives.

  • Obamacare provides states with a match ranging from 20-45 percentage points higher to cover the able-bodied than individuals with disabilities: “No correlation between expansion and waiting lists for individuals with disabilities!”
  • Obamacare provides states with a 6 percentage point increase for home-based services: A “huge change to improve HCBS [home and community-based services] care.”
  • The Republican alternative to Obamacare would reduce Medicaid spending for traditional (i.e., non-expansion) populations by a comparatively small amount: “Massive cuts to Medicaid services.”

Isn’t there a slight contradiction in these responses—both in their tone and in their logic? And isn’t it worth noting that these contradictions all happen to align perfectly with the natural partisan response to each of these issues?

This Is A Political Problem, Not a Policy Problem

Claiming that the greater federal match to cover able-bodied adults than individuals with disabilities stems from a “political history problem” deliberately obscures its roots. This “history” did not take place half a century ago, at Medicaid’s creation, it took place in the past few years, as part of Obamacare.

When crafting that legislation, Democrats could have come up with other policy solutions that expanded Medicaid to the able-bodied without discriminating against individuals with disabilities in the process. They could have proposed increasing the federal match for coverage of individuals with disabilities, in exchange for states covering the able-bodied at the existing federal match rates. Congress enacted a similar type of “swap” in the Medicare Modernization Act. The federal government took over the prescription drug cost of Medicare-Medicaid “dual eligibles” in exchange for a series of “clawback” payments from states.

Democrats in Congress could have considered other ways to expand Medicaid without giving states a greater match to cover the able-bodied than individuals with disabilities. To the best of my knowledge, they chose not to do so. President Obama could have insisted on a more equitable Medicaid formula, but he chose not to do so. And the disability community could have pointed out this disparity to the president and leaders in Congress, but chose not to do so.

Agree or disagree with them, these were deliberate policy choices, not a mere historical accident.

How Can You Support Lower Funding While Complaining About Access?

The argument about lower funding levels misses several points. First, while the Congressional Budget Office has not released estimates of how much the per capita caps (as opposed to changes associated with scaling back Obamacare’s Medicaid expansion) will reduce federal spending, multiple estimates suggest a comparatively small amount of savings from this particular change—at most 1 or 2 percent of spending on traditional Medicaid populations over the coming decade.

Second, if given sufficient flexibility from Washington, states can reduce their Medicaid spending, rendering the discussion of “cuts” under the caps moot. Rhode Island’s Global Compact Waiver, approved in January 2009, actually resulted in a year-on-year decline of Medicaid spending per beneficiary. Moreover, the non-partisan Lewin Group concluded that Rhode Island’s waiver reduced that spending by improving beneficiary access and care, not by denying medical services.

Third, if caps on Medicaid are so harmful and damaging, then why did Obamacare cap spending on Medicare—and why did disability groups remain silent about it? Current law imposes a per capita cap on Medicare spending, one enforced by Obamacare’s Independent Payment Advisory Board (IPAB) of unelected bureaucrats.

What’s more, Obamacare imposes an annual inflation adjustment (gross domestic product growth plus 1 percent) likely to be lower than the inflation adjustment for disabled populations included in the House-passed bill (medical inflation plus 1 percent). Yet a critique of the Medicare payment caps or IPAB appears nowhere in the disability community’s 14 pages of comments regarding the bill that became Obamacare.

So the question to the disability community is obvious: Why does a Democratic proposal to impose per capita caps on Medicare raise no objections, but a Republican proposal to impose (potentially higher) per capita caps on Medicaid guaranteed to prompt “massive cuts in Medicaid services?”

Let’s Just Pay More for Everyone

This comment attempts to obscure the distinction between the amount of funding and the priorities for that funding. I might disagree with liberals about the overall level of funding for the program—not least because efforts like that in Rhode Island demonstrate the potential for Medicaid to become more efficient—but I should agree with them about the need to prioritize care for the most vulnerable. Unfortunately, Obamacare’s Medicaid expansion goes in the opposite direction.

In thinking about the important distinction between overall program funding and priorities within a program, I’m often reminded of a speech that former House Majority Leader Steny Hoyer (D-MD) gave on the House floor in September 2009: “At some point in time, my friends, we have to buck up our courage and our judgment and say, if we take care of everybody, we won’t be able to take care of those who need us most. That’s my concern. If we take care of everybody…then we will not be able to take care of those most in need in America.”

Yes, Hoyer’s speech discussed Medicare, not Medicaid, and he voted for Obamacare (and its Medicaid expansion) six months after giving it. But the speech raises an important point about the need to prioritize entitlements, one that the notion of giving higher reimbursement rates to all populations ignores.

That’s what’s wrong with focusing solely on the question on the amount of funding for a program. Reasonable people can (and will) disagree about where to draw the funding line, but it has to be drawn somewhere. “Solving” the question of funding priorities by increasing reimbursements for all populations—the equivalent of promising everyone a pony—will, by failing to choose wisely now, cause even tougher fiscal choices for generations to come.

Disability Groups Have More Important Priorities

Yes, I have worked with disability groups. For one, in 2013, I served on the Commission on Long-Term Care Congress created in the wake of the CLASS Act’s failure and repeal. We took many hours of public testimony from disability groups and others, and received dozens of other written comments—many from dedicated and passionate parents or caregivers of individuals with disabilities, and all of which I made a point to read. I won’t claim to have made disability policy my life’s work, but my jobs over the years have intersected with the disability community on several occasions.

By claiming that disability groups have “way more priorities than comparing their FMAP [i.e., their federal match rate],” this comment actually makes my point for me. The January 2010 letter by the Consortium of Citizens with Disabilities (CCD) setting out priorities for what became Obamacare was 14 pages in length, amounted to over 5,500 words, and included (by my count) 73 separate bulleted recommendations regarding the legislation. All that, and yet not one word on the bill prioritizing coverage of the able-bodied over individuals with disabilities? Frankly, the issue seems quite conspicuous by its absence.

Just Interview Someone From This Consortium

I received a series of tweetsculminating in a dramatic “Shame on you”—attacking me for not having contacted any members of the Consortium for Citizens with Disabilities (CCD) prior to writing my piece. It is correct that I didn’t reach out to any CCD member groups before printing the article. I didn’t need to because I had already spent years working with them.

The charge that I never spoke to “ONE SINGLE CCD MEMBER” is false—and demonstrably so. For nearly four years, from the spring of 2004 until the end of 2007, I worked as a lobbyist for the National Association of Disability Representatives (NADR). During that time, I spent many hours in CCD task force meetings, interacting both directly and indirectly with CCD members. The commenter’s accusation that if I had reached out to CCD members, I would know about the lengthy adjudication process for many Social Security disability claims holds no small amount of irony—I handled those issues over a decade ago.

In reality, my time working with CCD members while representing the disability representatives prompted me to write my article last week. While attending CCD meetings, I saw firsthand how some meeting participants—several of which remain in their current positions and active in CCD activities—made offhand comments of a rather partisan nature. Not everyone joined in the political commentary, but several felt comfortable enough to make clear their partisan affiliations in open discussions, even if I and others did not.

Similarly, I recall how the disability community fought against George W. Bush’s idea for personal accounts within Social Security almost uniformly, and even before Congress and the administration had an opportunity to fully develop their proposals. At the time, my client, the National Association of Disability Representatives, took an agnostic view towards the personal account concept, focusing more on the specifics of whether and how it could work for the disability community.

For instance, NADR wanted to ensure that any personal account proposal would hold the Social Security Disability Trust Fund (separate from the Old Age and Survivors Trust Fund) harmless, and that people who spent time receiving disability benefits would not be financially harmed (e.g., lack the opportunity to save wage earnings in a personal account, yet have their retirement benefits reduced) for having done so.

By contrast, most CCD members opposed the proposal from the get-go, often coordinating with Nancy Pelosi, Sander Levin, and other Democrats for events and strategy meetings. Archives on the disability coalition’s website from that era appear incomplete, but a 2005 August recess “Action Alert: Efforts to Privatize Social Security Continue!” gives a sense of the message coming from most CCD members, and the organization as a whole.

At this point any liberals still reading might applaud the disability community for having come out so strongly against the Bush proposal. But that idea focused on the Social Security retirement system, not the disability program, and the Bush administration and Republicans in Congress wanted to engage with disability groups to ensure any reforms held the disability community harmless. So how did failing to engage them—choosing instead to oppose from the outset—help the disability community?

In truth, early and vocal opposition to personal accounts may have put the disability community at greater risk had the personal account proposal been enacted without disability groups’ technical expertise on how best to structure it. And given both the partisan comments I heard from at least some CCD members at CCD meetings, it’s worth asking whether partisan or ideological concerns—separate and distinct from the interests of the disability community—unduly or improperly influenced the organization’s collective judgment back then.

Their inherent contradictions in the current debate—remaining silent about Obamacare’s unfair Medicaid match rate disparity and Medicare payment caps, while strenuously objecting to Republican attempts to impose payment caps on Medicaid—reinforce those concerns about undue partisanship.

It isn’t always easy stating inconvenient truths—pointing out that laws one doesn’t like should be enforced along with every other law, or where policies proposed by lawmakers with whom one might ordinarily be aligned fall woefully short. But such truth-telling remains an essential ingredient to authenticity and credibility. As I argued last week, I don’t think the disability community has done that in this case. I wish they had.

This post was originally published at The Federalist.