Why Republicans Get No Points for Opposing Democrats’ $3 Trillion Coronavirus Bill

On May 15, Speaker Nancy Pelosi (D-Calif.) will bring to the floor of the House a sprawling, 1,815-page bill. Released mere days ago, the bill would spend roughly $3 trillion—down from the $4 trillion or more that lawmakers on her socialist left wanted to allocate to the next “stimulus” package.

Most House Republicans will oppose this bill, which contains a massive bailout for states and numerous other provisions on every leftist wish list for years. But should anyone give them credit for opposing the legislation? In a word, no.

Conservatives shouldn’t give Republican lawmakers any credit for opposing bills that have no chance of passage to begin with—bills they never should vote for anyway. I didn’t go out and rob a bank yesterday. Should I get a medal for that? Of course not. You don’t get credit for doing the things you’re supposed to do.

Conservatives should demand more than the soft bigotry of low expectations that Republican lawmakers’ miserable track record on spending has led them to expect. For starters, instead of “just” voting no on the Pelosi bill’s additional $3 trillion in spending, why not come up with a plan to pay for the $3 trillion Congress has already spent in the past several months?

Yes, government needs to spend money responding to coronavirus, not least because government shut down large swathes of the economy as a public health measure. But that doesn’t mean Congress can or should avoid paying down this debt—not to mention our unsustainable entitlements—starting soon.

Decades of ‘Conservative’ Grifters

Two examples show how far Republican lawmakers stray from their rhetoric. In July 2017, former House Majority Leader Eric Cantor (R-Va.) said of his prior rhetoric regarding Obamacare, from defunding the law to “repeal-and-replace”: “I never believed it.” Of course, he waited to make this admission until he had left office and taken a lucrative job at an investment bank.

Cantor’s comments confirmed conservatives’ justifiable fears: That Republican lawmakers constantly play them for a bunch of suckers, making promises they don’t believe to win power, so they can leverage that power to cash in for themselves.

Perhaps the classic example of the “all hat and no cattle” mentality comes via former House Speaker Paul Ryan (R-Wis.). Notwithstanding Ryan’s reputation as a supposed fiscal hawk, consider his actions while in House leadership:

  • Instead of reforming entitlements, Ryan led the charge to repeal the first-ever cap on entitlement spending. He could have nixed Obamacare’s Independent Payment Advisory Board, a group of unelected officials charged with slowing the growth of Medicare spending, while keeping the spending cap. Instead, he got Congress to repeal the board and the spending cap that went with it—worsening our entitlement shortfalls.
  • For years, Ryan proposed various reforms to the tax treatment of health insurance, because economists on both the left and the right agree it encourages the growth of health-care costs. But as speaker, Ryan supported delays of a policy included in Obamacare that, while imperfect, at least moved in the right direction towards lowering health care costs. The delays allowed Congress to repeal the policy outright late last year, in a massive spending bill that shifted both spending and health-care costs the wrong way.
  • As chairman of the House Ways and Means Committee, Ryan gave then-House Speaker John Boehner (R-Ohio) the political cover he needed to pass a Medicare physician payment bill that increased the deficit and Medicare premiums for seniors. The legislation did include some entitlement reforms, but at a high cost—and didn’t even permanently solve the physician payment problem.

Ryan’s “accomplishments” on spending as a member of leadership echo his prior votes as a backbench member of Congress. Ryan voted for the No Child Left Behind Act; for the Medicare Modernization Act, which created a new, unpaid entitlement costing $7.8 trillion over the long term; and for the infamous Troubled Asset Relief Program Wall Street bailout.

Over his 20-year history in Congress, I can’t think of a single instance where Ryan took a “tough vote” in which he defied the majority of his party. Instead, he always supported Republicans’ big-spending agenda. In that sense, tagging Ryan as a RINO—a Republican in Name Only—lacks accuracy, because it implies that most Republican lawmakers have a sense of fiscal discipline that only Ryan lacks.

It doesn’t take a rocket scientist to draw the line from Ryan’s brand of “leadership” to Donald Trump. The latter spent most of his 2016 campaign illustrating how Republican elected officials failed to deliver on any of their promises, despite talking up their plans for years.

Stand for Principle, or Stand for Nothing

When Republicans enter the House chamber on Friday to cast their votes against Pelosi’s bill, they should take a moment to contemplate her history. In the 2010 elections, Pelosi lost the speakership in no small part because of Obamacare. One scientific study concluded that the Obamacare vote alone cost Democrats 13 seats in the House that year.

Pelosi did not relinquish the speakership gladly; few would ever do that. But she proved willing to lose the speakership to pass the law—and would do so again, if forced to make such a binary choice.

I know not on what policy grounds, if any, Republicans would willingly sacrifice their majorities in the way Pelosi and the Democrats did to pass Obamacare. (Reforming entitlements? Tax cuts? Immigration?) That in and of itself speaks to the Republican Party’s existential questions, and the ineffective nature of the party’s “leadership.”

It also provides all the reason in the world that House Republicans should not trumpet their votes against the Pelosi legislation on Friday.

This post was originally published at The Federalist.

Don’t Just Bail Out a Flawed Medicaid Program

In recent days, some observers have discussed the possibility of targeted assistance to state Medicaid programs affected by the coronavirus outbreak. Unfortunately, the legislation proposed by House Speaker Nancy Pelosi (D-CA) falls far short of that marker, providing a gusher of new spending with no long-term reforms to the program. Conservatives should insist on better.

The House’s bill, introduced late in the night Wednesday, contains several noteworthy flaws. By increasing the federal Medicaid match for all states by 8 percentage points for the entire public health emergency, it prevents the targeting of assistance to those states most affected by coronavirus cases.

Increasing the federal match for able-bodied adults to 98 percent encourages states to prioritize these individuals over disabled populations, while discouraging states from rooting out fraud. The legislation also precludes states from making any changes to their Medicaid programs for the duration of the bailout, reinstituting the fiscal straight-jacket contained in President Obama’s “stimulus” bill.

Like that 2009 package, Pelosi’s legislation proposes tens of billions in new spending for an already-sprawling Medicaid program without any structural changes. But if Pelosi or conservatives wish to pay for the short-term largesse via long-term changes to Medicaid, they need not look far: President Obama’s budgets included several proposals that, if enacted into law, would change incentives in Medicaid for the better.

One area ripe for reform: Medicaid provider taxes. Hospitals and other medical providers often support these taxes—the only entities that ever endorse new taxes on themselves—because they immediately come right back to the health care industry, after states use the tax revenue to draw down additional Medicaid matching funds. In 2011, none other than Joe Biden reportedly called this form of legalized money laundering a “scam.”

At minimum, Congress should immediately enact a moratorium on any new provider taxes, or any increases in existing provider taxes, cutting off the spigot of federal dollars via this budget gimmick. Lawmakers can echo President Obama’s February 2012 budget submission, which would have saved $21.8 billion by reducing states’ maximum provider tax rate.

That proposal delayed its effective date by three years, “giv[ing] states more time to plan”—which would in this case delay the changes until the coronavirus outbreak subsides. Another positive solution: Codifying the Trump administration’s Medicaid fiscal accountability rule, which includes welcome reforms reining in states’ most egregious accounting gimmicks, effective a future date.

More broadly, Congress should also consider the ways the existing matching rate formula encourages additional Medicaid spending by states. For instance, current law provides all states with a minimum 50 percent match rate, encouraging richer states to spend more on Medicaid. Absent that floor, 14 states—11 of them blue—would face a lower match; Connecticut’s rate would plummet from 50 percent to 11.69 percent.

Gradually lowering or eliminating the federal floor on the match rate, beginning 2-3 years hence, would discourage wealthier states from growing their Medicaid programs beyond their, and the federal government’s, control. Had lawmakers enacted this proposal as part of the 2009 “stimulus,” New York—which would have a federal match rate of 34.49 percent in the current fiscal year absent the 50 percent minimum—might have right-sized its Medicaid program well before the program’s current budget crunch.

Alternatively, Congress could embrace Obama’s budget proposal for a blended Medicaid matching rate. Replacing the current morass of varying federal match rates for different populations could save money, and eliminate the perverse incentives included in Obamacare, which gives states a higher match rate to cover able-bodied adults than individuals with disabilities.

Judging from her initial bid in the “stimulus” wars, Pelosi has taken Rahm Emanuel’s advice never to let a serious crisis go to waste. If she wishes to emulate Obama’s first chief of staff, conservatives should insist that she also enact some of the Medicaid changes proposed in Obama’s own budgets, to begin the process of reforming the program.

This post was originally published at The Federalist.

Hospitals Seek to Defend Their Questionable Accounting Scams

With the federal government more than $23 trillion in debt, why should taxpayers continue to fund states’ accounting scams designed to bilk Washington out of additional Medicaid matching funds? It’s a good question, but one hospital lobbyists don’t want you to ask.

Late last year, the Trump administration released a proposed regulation designed to bring more transparency and accountability into the Medicaid program. The hospital sector in particular has begun an all-out blitz to try and overturn the rulemaking process. The need for the regulations demonstrates the problems with the current American health-care system, and how hospitals stand as one of the biggest obstacles to reform.

How the ‘Scam’ Works

The proposed regulations call for more transparency about supplemental payments within the Medicaid program. These payments, which take a variety of different forms, are considered supplemental in nature because they are not directly connected to the treatment of any one particular patient.

Many of these supplemental payments represent a way for states—and hospitals—to obtain a greater share of Medicaid matching dollars from the federal government. Hospitals, local governments, or other entities “contribute” funds to the state for the express purpose of obtaining additional Medicaid funds from Washington. Those matching funds then get funneled right back to many of the same entities that “contributed” the funds in the first place. As the old saying goes, it’s nice work if you can get it.

Over the years, even liberal groups have expressed concern about these shady funding mechanisms. In 2011, then-Vice President Joe Biden reportedly called provider taxes—in which hospitals and nursing homes pay an assessment, which gets laundered through state coffers to receive—a “scam.” Think about it: How often do you ask to pay higher taxes? Hospitals and nursing homes often propose new or higher provider taxes because they believe they will get their money back, and then some, via greater Medicaid payments.

Likewise, in 2000 the liberal Center on Budget and Policy Priorities decried the use of “Rube Goldberg-like accounting arrangements” that “use complex accounting gimmicks to secure additional federal funds for states without actual state matching contributions.” Yet two decades later, the scams continue to proliferate, because, as a 2005 government audit noted, most states have hired contingency-fee consultants for the sole purpose of bilking additional Medicaid matching funds from the federal government.

Hospitals’ Scare Tactics Rationalize Theft

The Trump administration’s proposal would make these accounting arrangements more transparent, with the goal of phasing out several of the most egregious arrangements altogether. This has prompted hospital executives to consider the proposed rule something just short of Armageddon.

During a 2008 debate on a similar set of Medicaid regulations put forward by the Bush administration, very few members of Congress even debated the regulations, as opposed to their effects on hospitals. Likewise, most hospital lobbyists and executives don’t try to defend the merits of these accounting scams. Instead, they just focus on the effects, with the typical “parade of horribles” examples: “If you end these payments, Tiny Tim will die.”

Hospitals’ reluctance to defend these opaque funding arrangements on their merits represents an implicit admission: They never should have received this money in the first place. Translation: “We stole that money fair and square—and you better let us keep stealing that money, or else” the hospital will close, people will lose their jobs, etc.

Hospitals’ Disingenuous Tactics

Some lobbyists on Capitol Hill claim they “only” want to delay the regulations, to allow for additional feedback and give hospitals time to adjust. It’s a ridiculous argument on multiple levels. First, as the policy paper from 2000 reveals, hospitals have engaged in these types of tactics for more than two decades, and they continue to grow and proliferate. The idea that hospitals need additional time to adjust to a problem they created seems laughable on its face.

Consider also what happened in 2008, when the Bush administration proposed a similar set of regulations designed to crack down on Medicaid financing abuses. Democrats passed a one-year moratorium preventing the administration from finalizing the rules, blocking them from taking effect.

Why only a one-year delay and not an outright ban? At the time, staff for the House Energy and Commerce Committee publicly stated that the moratorium “intended to delay the implementation of the Medicaid rules just long enough so that a future Administration can withdraw them.”

That’s exactly what ended up happening: The Obama administration withdrew the regulations upon taking office in 2009, so Congress didn’t have to pay for the cost associated with blocking them permanently. Hospital lobbyists asking for a delay of the regulations are hoping a Democrat wins the White House this fall, and can withdraw the regulations next year. They just won’t tell Republican staffers that their strategy is premised upon President Trump losing his re-election bid.

Let the Regulations Proceed, And Let States Decide

If the regulations went into effect today, they wouldn’t automatically lead to any hospitals closing down, or even hospitals losing any money. The Centers for Medicare and Medicaid Services (CMS) said it would work with states to transition away from the offending transactions over time.

That said, some governors oppose the regulations for the same reason hospitals do: It would force state governors and lawmakers to make difficult choices. If the loopholes that allow states to bilk more funds out of Washington end, then states would have to pony up “real” money from their coffers to maintain payments to providers, rather than funds obtained via accounting gimmicks. Hospitals would have to compete with other important state priorities—transportation, education, corrections, etc.—to maintain their existing payments.

But as the old saying goes, to govern is to choose. Better for a state to raise taxes—and be up-front and honest about doing so—to fund its Medicaid program than for that same state to use opaque gimmicks to squeeze out more federal dollars. The latter situation amounts to a (deferred) tax increase anyway, by adding more dollars to Washington’s ever-growing debt.

After decades of delays, and with our country’s debt growing ever-larger by the day, Medicaid deserves the fiscal integrity these new regulations would bring. They should go into full effect, and sooner rather than later.

This post was originally published at The Federalist.

The Four Most Dangerous Words in Washington

More than three decades ago, Ronald Reagan rightly characterized the nine most terrifying words in the English language: “I’m from the government, and I’m here to help.” In Washington, a quartet of four words rank close behind Reagan’s nine in their ability to terrify: What are you for?

Countless people in official Washington, from leadership staff to reporters to liberals to lobbyists, use these four words, or some variation thereof, to try to get conservatives to endorse bad policy. Their words carry with them an implicit argument: You have to be for something, rather than just opposing bad policy.

Reagan would find that reasoning nonsensical. Why do you have to be for something when all the available options undermine conservative principles—because you’re from the government and you’re here to help? It’s a lazy straw-man argument, which might explain why so many people in Washington use it, but it’s a premise that conservatives should reject.

Example 1: Drug Price Legislation

On Monday, House Republican leaders released their alternative to House Speaker Nancy Pelosi’s prescription drug legislation. Their very first bullet in the summary of the legislation said that the bill includes “350 pages” of provisions. (Technically, the bill has 352 pages of content, while by contrast, the Rules Committee print of Democrats’ prescription drug legislation weighs in at 275 pages.)

Republicans quite rightly criticized Pelosi almost a decade ago for the awful process she used to enact Obamacare. Remember the speaker’s infamous quote about the legislation in March 2010, which House Republicans still have on their YouTube page:

Yet including the bill’s size as the first bullet point in their summary suggests Republican leadership considers it a feature, not a bug: “Look at how substantive we are—our bill is 350 pages long!” Granted, the House Republican package consists of a grab-bag of provisions related to drug pricing, most of which existed well before this week. Some of them doubtless contain good ideas, and ideas I have previously endorsed.

But think about what went into creating this “new,” 350-page bill. A bunch of leadership staffers sat around a big desk in the Capitol, decided what bills and provisions to include in the package—and, by extension, which bills to exclude from it. I know, because I’ve sat in those types of meetings. They released the legislation on Monday, and Congress likely will vote on it late Wednesday night (early Thursday at the latest).

Republican Members of Congress won’t have time to read all 352 pages of the House Republican bill. Some of them may not have time to read even the four-page summary of the bill. And their staff, who are currently overwhelmed by the litany of issues on Congress’ December agenda, from impeachment to a massive defense policy bill to another massive spending bill to the prescription drug debate, have neither the time nor the bandwidth to provide thoughtful advice and counsel.

But most if not all Republican members of Congress will vote for this drug price alternative they have not read and many do not fully understand. Why? Because most think they need to “be for something.” Because they believe that (false) premise, they will have effectively handed their voting card to unelected leadership staffers—who may or may not actually know what they are doing—to define what Republicans are “for.” It’s no way to run a railroad, let alone the country.

Example 2: Entitlements

My article last week about Democratic presidential candidate Pete Buttigieg’s proposed long-term care entitlement prompted an e-mail from a colleague. The e-mail asked a polite variation of the question noted above: If you don’t like Buttigieg’s approach to long-term care, what would you do instead?

My response in a nutshell: Nope. As I pointed out in the original post, our country faces $23 trillion—that’s $23,000,000,000,000—in debt—and rising. We can’t afford the entitlements and government programs we have now. To even talk about creating new programs (which would face their own solvency and sustainability concerns) only gives lawmakers and the American public a permission structure to avoid the hard decisions Congress should have made years ago to right-size our entitlements.

Example 3: ‘Surprise Billing’ Legislation

On Sunday, several members of key committees announced an agreement in principle on federal legislation regarding “surprise billing,” which arises when physicians and medical providers seek to recover charges when patients obtain care out-of-network during emergencies, or when patients inadvertently see an out-of-network physician (e.g., an anesthesiologist) at an in-network hospital.

(Disclosure: I have consulted with various firms about the potential outcomes and implications of this legislation. However, these firms have not asked me for my personal policy positions on the legislation, nor have they asked me to advocate for a position on it—as my positions, as always, are mine alone.)

I wrote back in July that this issue largely represented a solution in search of a problem, for multiple reasons. First, a relatively small number of hospitals and providers impose most of the “surprise” bills. Second, states have the power to fix this issue on their own by regulating providers, even if federal law makes it difficult for states to regulate all the insurers in their state.

So why do Republicans feel the need to sign off on federal legislation addressing a problem that states can decide to fix (or not to fix) themselves? Again, because lawmakers feel the need to “be for something.” That again brings to mind Reagan’s axiom about the nine most terrifying words, and the proposition that “I’m from the government and I’m here to help” often leads to unintended consequences.

No, Don’t Just ‘Do Something’

Perhaps by this point, some observers might have come up with an obvious question: How can you win elections if you don’t try to “do something?” The question has two simple answers.

First, citizens quite obviously do not vote solely based on a candidate’s ability to “do something,” such as expand the regulatory state, the welfare state, and government in general. If conservatives want to run campaigns based on giving voters “free stuff,” but just slightly less “free stuff” than Democrats, guess how many elections the conservative would win?

Second, as noted above, the “What are you for?” question has an obvious four-word response: “We can’t afford it.” That retort sadly has the feature of truth about it, as our country cannot sustain its current levels of government spending.

Any responsible parent knows that, no matter how often his child asks, letting that child eat ice cream three times a day does not represent good parenting. Congress long since should have imposed some of that sense of discipline on itself, and the American people.

Given our current fiscal situation, many policy proposals, no matter how popular, are not fiscally sustainable. The “What are you for?” question cleverly tries to elide that debate, in ways that will only undermine conservative principles, and our country’s solvency.

I’ll end by noting my strong support for the First Amendment: “Congress shall make no law.” (What, you thought it contains some other words too?) If Congress spent the majority of its time stopping bad laws and policies—particularly policies considered only slightly less bad than the original proposals—maybe our country wouldn’t face the prospect of paying off a growing mountain of debt.

This post was originally published at The Federalist.

“Ponzi Pete” Buttigieg Proposes More Unsustainable Entitlements

On the campaign trail for the Democratic presidential nomination, South Bend Mayor Pete Buttigieg tries to portray himself as a moderate politician. By running ads against implementing a single-payer health system, Buttigieg would have voters believe he rejects the radical leftism of socialist Sen. Bernie Sanders.

Don’t you believe it. Buttigieg recently released an aging and retirement plan that proposed massive amounts of new entitlement spending, with very little in the way of specifics to pay for all his ideas. It’s but the latest example of Democrats’ government giveaway train run amok.

CLASS Act ‘Ponzi Scheme’

The first part of Buttigieg’s paper talks about an “historic” new program, Long-Term Care America. The mayor claims this plan would provide aid to seniors “who require assistance with two or more activities of daily living….Benefits would be worth $90 per day for as long as [seniors] need care, and kick in after an income-related waiting period.”

But Title VIII of Obamacare contained language establishing the Community Living Assistance Services and Supports (CLASS) program. Moderate Democrats attacked the proposal as unsustainable. Prior to Obamacare’s enactment, Sen. Kent Conrad (D-N.D.), then the chairman of the Senate Budget Committee, called CLASS a “Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.” Those concerns ultimately proved correct, as the Obama administration had to shelve the program as unworkable before it ever collected a dime in premiums.

As a Senate staffer conducting oversight on CLASS, and later as a member of the Commission on Long-Term Care tasked with examining possible replacements, I examined the program’s failure in minute detail. But at bottom, the program suffered from the same problem facing the Obamacare exchanges: Too many sick people signing up for benefits, driving up premiums, and therefore driving away healthy individuals.

Obamacare required individuals to pay into the CLASS program for only five years to qualify for benefits. Actuaries believed that people would sign up, pay a few thousand dollars in premiums over five years, and then collect benefits totaling tens of thousands of dollars or more. Just as Obamacare’s pre-existing condition provisions have priced millions of people out of coverage—because individuals can sign up for “insurance” after they develop a pre-existing condition—so too would CLASS have attracted people already suffering from disabilities, who by definition don’t need insurance so much as they need care.

The exchanges have remained somewhat sustainable only because of massive amounts of federal spending on subsidies and bailouts. However, Obamacare forced CLASS to become self-sustaining, without relying on federally subsidized premiums or a bailout. The Obama administration in October 2011 conceded that it could not meet these statutory requirements, and therefore shelved the program. (Congress later repealed CLASS outright in the “fiscal cliff” deal in January 2013.)

Buttigieg’s plan acknowledges none of this history, and makes no mention of solvency or sustainability when talking about his proposed new program. Perhaps limiting it to only those over age 65, and imposing a waiting period for people to receive benefits, as his proposal outlines, will make it more financially sustainable (or less unsustainable). But Buttigieg also proposes a $90 daily benefit, 80 percent richer than the CLASS Act’s $50 per day benefit, exacerbating solvency concerns.

Costly Promises

Buttigieg’s promise of a long-term care benefit says nothing about whether this new federal spending would increase the deficit, your taxes, or both. In that respect, it represents but one of the many costly promises in his retirement plan, including:

  • An end to the two-year waiting period currently required for individuals receiving Social Security disability benefits to qualify for Medicare coverage;
  • An increase in the minimum wage to $15 an hour, and new staffing requirements for nursing homes, all of which will raise costs to the Medicaid program; and
  • An expansion of Social Security benefits—including a new minimum benefit and credit for caregivers—funded entirely by higher taxes on “the rich.”

At present, our federal government faces $23 trillion in debt, and trillion-dollar deficits as far as the eye can see. To put it bluntly, we can’t pay for the government we have now, let alone the new programs Buttigieg and his fellow presidential candidates have proposed.

Buttigieg can try to hide himself in the cloak of the “moderate” mantra all he likes. But his laundry lists of new and unsustainable entitlements represent nothing more than big-government liberalism.

UPDATE: This post was edited after publication, to clarify the nature of Buttigieg’s proposal as compared to Obamacare’s CLASS Act.

This post was originally published at The Federalist.

Warren Asks What the Country Can Do for You

Elizabeth Warren’s release Friday of a more specific health-care platform only raised more questions about Medicare for All and its effects on the middle class. Conservatives as well as Ms. Warren’s Democratic opponents questioned the assumptions behind her claim that she can enact a single-payer plan without raising taxes on the middle class. Yet the harshest critic may be Ms. Warren herself. “Ask not what your country can do for you—ask what you can do for your country,” John F. Kennedy, who once held Ms. Warren’s Senate seat, urged. She refuses to ask the middle class to pay a dime for her costly proposal.

Take Ms. Warren’s assumptions at face value, even if doing so requires a knowing suspension of disbelief. Assume she can reduce the 10-year cost of a single-payer system from the $34 trillion in new federal spending estimated by the liberal Urban Institute to a mere $20.5 trillion. Assume her program would reduce administrative costs without encouraging fraud. Assume also that her proposed wealth tax won’t generate massive tax evasion—she claims a Warren administration would generate $2.3 trillion in new revenue by cracking down on tax avoidance—and that not a penny of her $9 trillion in assessments on employers will end up being paid by workers.

Ms. Warren envisions a $20 trillion expansion of government—the largest in American history—paid for by a fraction of the population. She foresees unlimited “free” health care for millions of families, without so much as a $100 copayment, premium, assessment, tax or other fee.

Sure, the earned entitlement always had an element of fiction. Social Security and Medicare pay benefits based on current cash flows, with their respective trust funds containing little more than promises to pay future benefits. Urban Institute estimates show that even wealthy seniors will receive more in Social Security and Medicare benefits than they paid in taxes. But Ms. Warren’s plan would dispense with the pretense of social insurance, instead creating a crass form of political plunder that uses federal largess to buy votes.

In turning government programs into a version of “Oprah’s Favorite Things”—everyone gets a free car, paid for by somebody else—Ms. Warren follows the example of President Obama. He talked of social solidarity, saying “we’re all in this together,” but shied away from asking anyone other than “the rich” to pay for his new government programs. In 2008 candidate Obama made a “firm pledge” not to raise taxes on families making less than $250,000 a year, “not your income tax, not your payroll tax, not your capital-gains taxes, not any of your taxes.”

The “firm pledge” lasted two weeks. In February 2009 Mr. Obama raised tobacco taxes to fund an expansion of children’s health insurance. Then, after ObamaCare took effect in 2013, the law led at least 4.7 million Americans to receive insurance-cancellation notices. In the years since, the health-insurance market has shrunk by four million people, because those who don’t qualify for subsidies can’t afford coverage—what Bill Clinton called “the craziest thing in the world.” Working families ended up bearing the burden of Mr. Obama’s new programs.

Therein lies the true lesson for the American people. Elizabeth Warren may not ask the middle class to fund Medicare for All—at least not until she’s safely in office—but one can rest assured that, should she succeed in enacting her scheme, all American families will pay.

This post was originally published at The Wall Street Journal.

President’s Executive Order Shows Two Contrasting Visions of Health Care

As Washington remains consumed by impeachment fever, President Trump returned to the issue of health care. In an executive order released Thursday, and a speech at The Villages in Florida where he spoke on the topic, the president attempted to provide a vision that contrasts with the left’s push for single-payer socialized medicine.

This executive order focused largely on the current Medicare program, as opposed to the existing private insurance marketplace. By promoting new options and focusing on reducing costs, however, the president’s actions stand in opposition to the one-size-fits-all model of the proposed health care takeover.

The Administration Wants To Explore These Proposals

One fact worth repeating about Thursday’s action: As with prior executive orders, it will in and of itself not change policy. The more substantive changes will come in regulatory proposals issued by government agencies (most notably the Department of Health and Human Services) in response to the executive order. While only the regulations can flesh out all of the policy details, the language of the order provides some sense of the proposals the administration wants to explore.

Modernized Benefits: The executive order promotes “innovative … benefit structures” for Medicare Advantage, the program in which an estimated 24 million beneficiaries receive Medicare subsidies via a network of private insurers. It discusses “reduc[ing] barriers to obtaining Medicare Medical Savings Accounts,” a health savings account-like mechanism that gives beneficiaries incentives to serve as smart consumers of health care. To accomplish that last objective, the order references broader access to cost and quality data, “improving [seniors’] ability to make decisions about their health care that work best for them.”

Expanded Access: The order seeks to increase access to telehealth as one way to improve seniors’ ability to obtain care, particularly in rural areas. It also looks to combat state-imposed restrictions that can limit care options, and can lead to narrow physician and provider networks for Medicare Advantage plans.

More Providers: The order discusses eliminating regulatory burdens on doctors and other medical providers, a continuation of prior initiatives by the administration. It also references allowing non-physician providers, such as nurse practitioners and physician assistants, to practice to the full scope of their medical licenses and receive comparable pay for their work.

Entitlement Reform: Last, but certainly not least, the order proposes allowing seniors to opt out of the Medicare program. This proposal would not allow individuals to opt out of Medicare taxes, but it would undo current regulations that require seniors to opt into the Medicare program when they apply for Social Security.

As I had previously explained, this proposal stands as a common-sense solution to our entitlement shortfalls: After all, why should we force someone like Bill Gates or Warren Buffett to accept Medicare benefits if they are perfectly content to use other forms of health coverage?

Democrats’ Health Care Vision Is Medicare for None

Of course, many on the socialist left have made their vision plain for quite some time: They want the government to run the entire health-care system. Ironically enough, however, Sen. Bernie Sanders’ single-payer legislation would abolish the current Medicare program in the process:

(1) IN GENERAL.—Notwithstanding any other provision of law, subject to paragraphs (2) and (3)—

(A) no benefits shall be available under title XVIII of the Social Security Act for any item or service furnished beginning on or after the effective date of benefits under section 106(a)

As I first noted nearly two years ago, this language makes Sanders’ proposal not “Medicare for All,” but “Medicare for None.” It speaks to the radical nature of the socialist agenda that they cannot come clean with the American people about the implications of their legislation, such that even analysts at liberal think-tanks have accused them of using dishonest means to sell single-payer.

Just as important, “Medicare for None” would take away choices for seniors and hundreds of millions of other Americans. As of next year, an estimated 24 million seniors will enroll in Medicare Advantage plans to obtain their Medicare benefits. As I outline in my book, Medicare Advantage often provides better benefits to seniors, and at a lower cost to both beneficiaries and the federal government. Yet Sanders and his socialist allies want to abolish this popular coverage, to consolidate power and control in a government-run health system.

The actions the administration announced on Thursday represent the latest in a series of steps designed to offer an alternative to the command-and-control vision promoted by the left. The American people don’t deserve socialized medicine, but they don’t deserve the broken status quo either. Only true patient-centered reforms can create a health-care environment that works for seniors and the American people as a whole.

This post was originally published at The Federalist.

Six Things about Pre-Existing Conditions Republican “Leaders” Still Don’t Get

“If at first you don’t succeed, go ahead and quit.” That might be the takeaway from excerpts of a conference call held earlier this month by House Minority Leader Kevin McCarthy (R-CA), and published in the Washington Post.

McCarthy claimed that Republicans’ “repeal and replace” legislation last Congress “put [the] pre-existing condition campaign against us, and so even people who are [sic] running for the very first time got attacked on that. And that was the defining issue and the most important issue in the [midterm election] race.” He added: “If you’ll notice, we haven’t done anything when it comes to repealing Obamacare this time.”

Problem 1: Pre-Existing Condition Provisions In Context

I first noted this dilemma last summer: Liberals call the pre-existing condition provisions “popular” because their polls only ask about the policy, and not its costs. If you ask Americans whether they would like a “free” car, how many people do you think would turn it down? The same principle applies here.

When polls ask about the trade-offs associated with the pre-existing condition provisions—which a Heritage Foundation study called the largest driver of premium increases under Obamacare—support plummets. Cato surveys in both 2017 and 2018 confirmed this fact. Moreover, a Gallup poll released after the election shows that, by double-digit margins, Americans care more about rising health premiums and costs than about losing coverage due to a pre-existing condition.

The overall polling picture provided an opportunity for Republicans to push back and point out that the pre-existing condition provisions have led to skyrocketing premiums, which priced 2.5 million people out of the insurance marketplace from 2017 to 2018. Instead, most Republicans did nothing.

Problem 2: Republicans’ Awful Legislating

The bills’ flaws came from a failure to understand how Obamacare works. The law’s provisions requiring insurers to offer coverage to everyone (guaranteed issue) and price that coverage the same regardless of health status (community rating) make insurers want to avoid covering sick people. Those two provisions necessitate another two requirements, which force insurers to cover certain conditions (essential health benefits) and a certain percentage of expected health costs (actuarial value).

In general, the House and Senate bills either repealed, or allowed states to waive, the latter two regulations, while keeping the former two in place. If Republicans had repealed all of Obamacare’s insurance regulations, they could have generated sizable premium savings—an important metric, and one they could tout to constituents. Instead, they ended up in a political no man’s land, with people upset about losing their pre-existing condition “protections,” and no large premium reductions to offset that outrage.

Looking at this dynamic objectively, it isn’t surprising that McCarthy and his colleagues ended up with a political loser on their hands. The true surprise is why anyone ever thought the legislative strategy made for good politics—or, for that matter, good (or even coherent) policy.

Problem 3: Pre-Existing Conditions Aren’t Going Away

Within hours after Sen. Thom Tillis (R-NC) introduced a bill last year maintaining Obamacare’s pre-existing condition provisions—the requirement that all insurers offer coverage at the same rates to all individuals, regardless of health status—liberals weighed in to call it insufficient.

As noted above, Obamacare encourages insurers to discriminate against people with pre-existing conditions. Repealing only some of the law’s regulations would exacerbate that dynamic, by giving insurers more tools with which to avoid enrolling sick people. Liberals recognize this fact, and will say as much any time Republicans try to modify any of Obamacare’s major insurance regulations.

Problem 4: Better Policies Exist

According to the Post, McCarthy said he wants to recruit candidates who would “find a solution at the end of the day.” A good thing that, because better solutions for the problems of pre-existing conditions do exist (I’ve written about several) if McCarthy had ever bothered to look for them.

Their political attacks demonstrate that liberals focus on supporting “insurance” for people once they develop a pre-existing condition. (Those individuals’ coverage by definition really isn’t “insurance.”) By contrast, conservatives should support making coverage more affordable, such that people can buy it before they develop a pre-existing condition—and keep it once they’re diagnosed with one.

Regulations proposed by the Trump administration late last year could help immensely on this front, by allowing employers to subsidize insurance that individuals hold and keep—that is, coverage that remains portable from job to job. Similar solutions, like health status insurance, would also encourage portability of insurance throughout one’s lifetime. Other options, such as direct primary care and high-risk pools, could provide care for people who have already developed pre-existing conditions.

Using a series of targeted alternatives to reduce and then to solve the pre-existing condition problem would prove far preferable than the blunt alternative of one-size-fits-all government regulations that have made coverage unaffordable for millions. However, such a solution would require political will from Republicans—which to date they have unequivocally lacked.

Problem 5: Republicans’ Alternative Is Socialized Medicine

Instead of promoting those better policies, House Republican leaders would like to cave in the most efficient manner possible. During the first day of Congress, they offered a procedural motion that, had it been adopted, would have instructed the relevant committees of jurisdiction to report legislation that:

(1) Guarantees no American citizen can be denied health insurance coverage as the result of a previous illness or health status; and (2) Guarantees no American citizen can be charged higher premiums or cost sharing as the result of a previous illness or health status, thus ensuring affordable health coverage for those with pre-existing conditions.

Guaranteeing that everyone gets charged the same price for health care? I believe that’s called socialism—and socialized medicine.

Their position makes it very ironic that the same Republican committee leaders are pushing for hearings on Democrats’ single-payer legislation. It’s a bit rich to endorse one form of socialism, only to denounce another form as something that will destroy the country. (Of course, Republican leaders will only take that position unless and until a single-payer bill passes, at which point they will likely try to embrace it themselves.)

Problem 6: Health Care Isn’t Going Away As An Issue

The federal debt this month passed $22 trillion, and continues to rise. Most of our long-term government deficits arise from health care—the ongoing retirement of the baby boomers, and our corresponding obligations to Medicare, Medicaid, and now Obamacare.

Any Republican who cares about a strong national defense, or keeping tax rates low—concerns most Republicans embrace—should care about, and take an active interest in, health care and health policy. Given his comments about not repealing, or even talking about, Obamacare, McCarthy apparently does not.

But unsustainable trends are, in the long run, unsustainable. At some point in the not-too-distant future, skyrocketing spending on health care will mean that McCarthy will have to care—as will President Trump, and the Democrats who have gone out of their way to avoid talking about Medicare’s sizable financial woes. Here’s hoping that by that point, McCarthy and Republican leaders will have a more coherent—and conservative—policy than total surrender to the left.

This post was originally published at The Federalist.

How Republicans Shot Themselves in the Foot on Pre-Existing Conditions

Republicans who want to blame their election shortcomings on last year’s attempt to “repeal-and-replace” Obamacare will have all the fodder they need from the media. A full two weeks before Election Day, the bedwetters caucus was already out in full force:

House Republicans are increasingly worried that Democrats’ attacks on their votes to repeal and replace Obamacare could cost them the House. While the legislation stalled in the Senate, it’s become a toxic issue on the campaign trail for the House Republicans who backed it.

In reality, however, the seeds of this problem go well beyond this Congress, or even the last election cycle. A health care strategy based on a simple but contradictory slogan created a policy orphan that few Republicans could readily defend.

A Dumb Political Slogan

Around the same time last year, I wrote an article explaining why the “repeal-and-replace” mantra would prove so problematic for the Republican Congress trying to translate the slogan into law. Conservatives seized on the “repeal” element to focus on eradicating the law, and taking steps to help lower health costs.

By contrast, moderates assumed that “replace” meant Republican lawmakers had embraced the mantra of universal health coverage, and would maintain most of the benefits—both the number of Americans with insurance and the regulatory “protections”—of Obamacare itself. Two disparate philosophies linked by a conjunction does not a governing platform make. The past two years proved as much.

A Non-Sensical Bill

In life, one mistake can often lead to another, and so it proved in health care. After having created an internal divide through the “repeal-and-replace” mantra over four election cycles, Republicans had to put policy meat on the details they had papered over for seven years. In so doing, they ended up with a “solution” that appealed to no one.

  1. Removed Obamacare’s requirements for what treatments insurers must cover (e.g., essential health benefits);
  2. Removed Obamacare’s requirements about how much of these treatments insurers must cover (e.g., actuarial value, which measures a percentage of expected health expenses covered by insurance); but
  3. Retained Obamacare’s requirements about whom insurance must cover—the requirement to cover all applicants (guaranteed issue), and the related requirement not to vary premiums based on health status (community rating).

As I first outlined early last year, this regulatory combination resulted in a witch’s brew of bad outcomes on both the policy and political fronts:

  • Because lawmakers retained the requirements for insurers to cover all individuals, regardless of health status, the bills didn’t reduce premiums much. If insurers must charge all individuals the same rates regardless of their health, they will assume that a disproportionately sicker population will sign up. That dynamic meant the bills did little to reverse the more-than-doubling of individual market insurance premiums from 2013-17. What little premium reduction did materialize came largely due to the corporate welfare payments the bills funneled to insurers in the form of a “Stability Fund.”
  • However, because lawmakers removed the requirements about what and how much insurers must cover, liberal groups raised questions about access to care, particularly for sicker populations. This dynamic led to the myriad charges and political attacks about Republicans “gutting” care for people with pre-existing conditions.

You couldn’t have picked a worse combination for lawmakers to try to defend. The bills as written created a plethora of “losers” and very few clear “winners.” Legislators absorbed most of the political pain regarding pre-existing conditions that they would have received had they repealed those regulations (i.e., guaranteed issue and community rating) outright, but virtually none of the political gain (i.e., lower premiums) from doing so.

Some people—including yours truly—predicted this outcome. Before the House voted on its bill, I noted that this combination would prove untenable from a policy perspective, and politically problematic to boot. Republicans plowed ahead anyway, likely because they saw this option as the only way to breach the policy chasm caused by bad sloganeering, and paid the price.

Lawmaker Ignorance and Apathy

That apathy continued after Obamacare’s enactment. While Suderman articulated an alternative vision to the law, he admitted that “Republicans can’t make the case for that plan because they’ve never figured out what it would look like. The GOP plan is always in development but never ready for final release.”

Emphasizing the “repeal-and-replace” mantra allowed Republicans to avoid face the very real trade-offs that come with making health policy. When a Republican Congress finally had to look those trade-offs in the face, it couldn’t. Many didn’t know what they wanted, or wanted a pain-free solution (“Who knew health care could be so complicated?”). Difficulty regarding trade-offs led to the further difficulty of unifying behind a singular policy.

Can’t Avoid Health Care

Many conservative lawmakers face something that could be described as “health policy PTSD”—they don’t understand it, so they don’t study it; they only define their views by what they oppose (e.g., “Hillarycare” and Obamacare); and when they put out proposals (e.g., premium support for Medicare and “repeal-and-replace” on Obamacare), they get attacked. So they conclude that they should never talk about the issue or put out proposals. Doubtless Tuesday’s election results will confirm that tendency for some.

Rather than using the election results to avoid health care, Republican lawmakers instead should lean in to the issue, to understand it and ascertain what concepts and policies they support. The left knows exactly what it wants from health care: More regulation, more spending, and more government control—leading ultimately to total government control.

Conservatives must act now to articulate an alternative vision, because the 800-pound gorilla of Washington policy will not disappear any time soon.

This post was originally published at The Federalist.

What Mitch McConnell and Congressional Democrats Get Wrong about Entitlements

Sometimes, as parents often remind children in their youth, two wrongs don’t make a right. This held true on Tuesday, when Democrats erupted over comments by Senate Majority Leader Mitch McConnell (R-KY) on entitlement reform.

In returning to “Mediscare” tactics, Democrats made several false claims about entitlements. But so did McConnell, who blithely omitted what a Republican majority did earlier this year to worsen the country’s entitlement shortfall.

What McConnell Got Wrong

McConnell spoke accurately when he said in an interview that Medicare, Social Security, and Medicaid serve as the primary drivers of our long-term debt. He stood on less firm ground when he told Bloomberg that “the single biggest disappointment of my time in Congress has been our failure to address the entitlement issue.” Contra McConnell’s claim, Congress—a Republican Congress—actually did address the entitlement issue this year: they made the problem worse.

This Republican Congress repealed a cap on Medicare spending—the first such cap in that program’s history. It did so as part of a budget-busting fiscal agreement that increased the debt by hundreds of billions of dollars. It did so even though Republicans could have retained the cap on Medicare spending while repealing the unelected, unaccountable board that Democrats included in Obamacare to enforce that spending cap.

By and large, both parties have tried for years to avoid taking on entitlement reform. But Democrats included an actual cap on Medicare spending as part of Obamacare, and Republicans turned around and repealed it at their first possible opportunity. That makes entitlements not just a bipartisan problem—it makes them a Republican problem too.

What Democrats Got Wrong

But McConnell’s comments suggested just the opposite. He noted that, while entitlements serve as the prime driver of the nation’s long-term debt, any changes to those programs “may well be difficult if not impossible to achieve when you have unified government.” McConnell said the same thing in a separate interview with Reuters on Wednesday: “We all know that there will be no solution to that, short of some kind of bipartisan grand bargain that makes the very, very popular entitlement programs in a position to be sustained. That hasn’t happened since the ’80s.”

Even though Congress needs to start reforming entitlements sooner rather than later—even if that means one political party must take the lead—McConnell indicated he would do nothing of the sort. In fact, his comments implied that Congress would not do so unless and until Democrats agreed to entitlement reform, giving the party an effective veto over any changes. Yet Democrats, who never fail to demagogue an issue, attacked him for those comments anyway.

Actually, they haven’t “earned” those benefits. Seniors may have “paid into” the system during their working lives, but the average senior citizen receives far more in benefits than he or she paid in taxes, and the gap continues to grow.

Making a Tough Job Worse

In this case, two wrongs not only did not make a right, they made our country worse off. Like outgoing Speaker of the House Paul Ryan (R-WI), McConnell wishes to absolve himself of blame for the entitlement crisis, when he made the situation worse.

On the other side, Pelosi and her fellow Democrats continue the partisan demagoguery, perpetuating the myth that seniors have “earned” their benefits because they see political advantage in defending nearly infinite amounts of government subsidies to nearly infinite numbers of people. For all their love of attacking “science deniers,” much of the left’s politics requires denying math—that unsustainable trends can continue in perpetuity.

At some point, this absurd game will have to end. When it finally does, our country might not have any money left.

This post was originally published at The Federalist.