Thursday, November 17, 2016

Generic Republicans in Power: Medicaid and Medicare

It isn't just Obamacare that is on the line.  Although for reasons stated before, I doubt that Republicans will repeal the Medicaid expansion outright (short version: unlike the exchanges, the Medicaid expansion is not having any obvious problems, and reversing it would upset not only poor people who lose health insurance, but healthcare providers not who don't get paid and states seeing large holes blown in their budgets).

But it has been a longstanding goal for Paul Ryan to turn Medicaid (the federal insurance for poor people) into a block grant, and then slowly squeeze it down.  What this means is that the federal government, instead of paying a fixed share of states' Medicaid costs, would give states a fixed sum to spend on Medicaid and gradually reduce it relative to current  rates.  The result would be to slowly starve Medicaid of funds and have more and more people thrown off, but cast the blame onto the states.  And, after all, since Medicaid is a program for the poor, it will lack any real political clout to fight the squeeze.  Or will it?

You see, among the "poor" who receive Medicaid are recipients of Medicaid Long-Term Care.  Many of these are once-middle class people who are unable to take care of themselves and end up in nursing homes.  Once their assets are depleted paying for the nursing home, they become poor and have to rely on Medicaid to pay the expense.  Long-term expenses take about half of total Medicaid expenditures.  Imagine the outcry over the prospect of Granny being thrown out on the street!  And, perhaps even more significantly, Medicaid pays for about 43% of total long-term care.  Now imagine the outcry from the long-term care industry over seeing so important a source of finance undermined!

All of which means, yes, there will be a political price to be paid for putting a serious squeeze on Medicaid.  The question is whether Democrats are smart enough to ensure that Republicans actually pay it, and whether the public will listen.

But it doesn't stop with Medicaid.  Paul Ryan is now talking about transforming Medicare (the federal health insurance for people over 65) into a voucher system, i.e., something like the Obamacare exchanges.  Of course, that may be just loose talk by Paul Ryan.  But then again Tom Price, Chairman of the House Budget Committee is talking about doing something similar.  He further proposes to do it as part of the budget process, to avoid any danger of a Democratic filibuster.  Some people are even expressing fears that this might get by so fast that Democrats won't have time to build resistance.

I really have trouble seeing it, for several reasons.  First and foremost, tampering with Medicare is political suicide.  Seriously, during the 2012 election season, even though Republicans were openly running on a proposal to turn Medicaid into a block grant and Medicare into a voucher system, Democrats found that pointing this out went nowhere in focus groups.  People simply refused to believe that Republicans would commit political suicide by doing anything so unpopular.  Certainly we know that when George W. Bush proposed turning Social Security into a "defined benefit" plan, (i.e., a 401-k) opposition was so fierce that it didn't even make it to the House floor.  It surpasses belief for me that anyone could actually slip this by the American public unnoticed.  Or that struggling Democrats would let such an obvious godsend pass.

Second, Donald Trump knows that tampering with Medicare is political suicide.  That is why he ran for President on an express promise not to tamper with either Medicare or Social Security.  Now, he has made a lot of impossible promises and will have to tone them down.  In fact, a lot of people have pointed out that Trump's supporters knew that his promises were not possible to keep and could forgive him for not living up to them, so long as he showed he had the right values.  But promising to keep his hands off Social Security and Medicare is not an extravagant promise that no one really expects him to keep.  It is a basic bedrock that all our previous Presidents have kept up to this point. So my guess is that he will discretely let it be known to Congress that this bill isn't wanted, and that they will comply in the interest of getting their other priorities passed.

Furthermore, if the Republican leadership is so rash as to raise such a measure, they will probably find it lacks sufficient votes to pass.  And if it does pass the House, even as a budgetary matter so that Senate Democrats cannot filibuster, it will only take a few Senate defectors to spike it.  And if it somehow passes the Senate, I am guessing that Trump would veto it.  It violates one of his most important campaign promises.  And besides, the veto would get him lots of bipartisan cred and force even his enemies to take him seriously.

But if this measure does make it into law, Democrats know what to do.  They have the example of Republicans to follow.  The transition will take time.  Make it the defining issue of the midterm election.  Make it the defining issue of the 2020 general election.  Fire up, not just their base, but the AARP and seniors everywhere to call for the repeal of this monstrosity.

The other thing to keep in mind is that when similar but separate things happen at once, they tend to become conflated in the public eye.  Many people conflated the Obama stimulus and the bank bailouts because they were both large, controversial spending bills that happened within a few months of each other.  During the 2013 debt ceiling crisis and government shutdown, timing both of these at once served Republicans poorly because it meant that the two were conflated in the public eye and most people didn't distinguish between government shutdown and the debt ceiling.  And in the recent election it seems unlikely that most people distinguished between Hillary Clinton sending State Department e-mails on a private server, deleting e-mails, or the publication of embarrassing e-mails hacked by the Russians.  The point is, putting "Hillary Clinton" and "e-mails" into the same sentence started produced an almost reflexive response in a great many people.

So, let's say Republicans vote to repeal Obamacare and suddenly 20 million people are in danger of losing their health insurance.  At the same time, they propose to block grant Medicaid and the long-term care industry starts warning that Granny will be thrown out in the street.  And then at the same time, they announce they they are going to change Medicare, probably to make it into something like the exchanges they have denounced as an outrage that must be shut down.  The basic message, "The Republicans are coming after your health insurance" is going to be a lot louder than any fine-tuned distinctions between these different programs.

Republicans would be insane to attempt so many unpopular but similar measures at the same time. And the Democrats are idiots if they don't know how to capitalize on it.

PS:  Talking Points Memo refers to this as the Medicare "phaseout."  Good!  Come one, Democrats, that is the phrase to use!  Make it poison for them!

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