Don’t Overthink It: Obamacare Opponents Oppose Obamacare

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By Josh Barro

Reihan Salam makes a qualified defense of governors refusing to take federal funds for Medicaid expansion. In National Review, he says of governors who intend to turn down the money and leave millions of working poor Americans without coverage:

They might believe … a health system reform that seeks to contain cost growth through progressive cost-sharing, deregulation designed to facilitate business-model innovation, and other market-oriented measures will become more likely if PPACA is politically defeated.…

It is crucially important for the law’s proponents to characterize Republican governors who oppose PPACA’s particular model of coverage expansion as opponents of coverage expansion for poor people as such. Conflating opposition to PPACA with opposition to helping the poor and the sick is good politics.

No. No. No. Where to begin?

First of all, governors can’t repeal the Patient Protection and Affordable Care Act. Their option is to take federal funds that will pay for 90-plus percent of a Medicaid expansion to cover the working poor, or not. Republican governors who decline these funds will be attacked for blocking coverage expansion to help the poor and the sick that is nearly free to state taxpayers because that is exactly what they will be doing.

Second, any governors who believe that undermining Obamacare is part of a long game to get a better health reform are mistaken. If there is Republican enthusiasm for "a health system reform that seeks to contain cost growth through progressive cost-sharing, deregulation designed to facilitate business-model innovation, and other market-oriented measures," then where was that reform (or even serious legislative action toward such a reform) when Republicans ran the federal government between 2001 and 2007?

The alternative to PPACA is nothing. Mitch McConnell’s comments last weekend were instructive -- Republicans in Congress have no meaningful plan to replace Obamacare and think that 30 million uninsured Americans is “not the issue.”

Conservative health wonks will object to my characterization. They will say they have many plans to use markets to drive down costs so that affordability is less of an issue. They may even advance plans that spend money to subsidize some sort of coverage for some expanded group of Americans. But Republicans have not taken them up on those plans when they have had the chance. That’s partly because expanding coverage costs money, and Republicans aren’t willing to spend money on it. And it’s partly because achieving significant cost control, even though market mechanisms, goes against the interests of groups that support Republicans, such as doctors and seniors.

There’s a reason Representative Paul Ryan’s plan to cut Medicare costs doesn’t even start affecting anyone for 10 years. The Republicans’ best electoral strategy on health care is to talk a good game but not implement reform with meaningful effects. If Republican governors refuse expanded Medicaid, those federal incentives won’t change.

This is a shame, because Reihan is right about one thing: There's a lot that’s undesirable about the PPACA model. The law should have been financed with efficient, broad-based taxes instead of singling out the wealthiest Americans. It should have longer phase-out ranges for benefits, to avoid poverty traps. It should define the guaranteed benefit package more narrowly, limiting guaranteed care to treatments that meet a high standard for cost effectiveness. It should encourage high deductibles and make greater use of market mechanisms to control costs.

Those are all things Republicans could have gotten if they had been willing to play ball on reform. But instead, they hunkered down and decided to throw everything they could at the law. Republicans even attacked PPACA provisions they should have liked, such as Medicare cost controls. Turning down the Medicaid expansion would be just another component of the obstruct-everywhere strategy.

Republicans might succeed in throwing enough wrenches in the law to prevent it from working, though that looks less and less likely following last week’s court decision. But nobody should fool himself into thinking the endgame is a sleeker, better reform that expands coverage and controls costs. If Republican lawmakers in the states decide to turn down Medicaid funds, the main effect will be many of their constituents going without health insurance.

(Josh Barro is lead writer for the Ticker. Follow him on Twitter.)

Read more breaking commentary from Josh Barro and other Bloomberg View columnists and editors at the Ticker.

-0- Jul/03/2012 17:01 GMT