Budget chicanery begets more budget chicanery.
About this time in 2010, Democrats were trying every procedural and accounting trick they could conjure to push ObamaCare through a restive Congress. The big hurdles had been overcome, but the final passage was tangled up.
There wouldn’t be a single-payer system, but the government would establish a “marketplace” where people could buy insurance, including the high-risk, unhealthy customers who private companies didn’t want to take on.
The universality of universal coverage was not an offer, but a requirement. The law would mandate that everyone, especially the low-risk younger Americans who often eschewed expensive health insurance, would have to buy a policy or pay a fine. That, the program’s designers figured, would keep markets stable by offsetting losses insurance companies would suffer with the undesirable customers. Two mandates: Insurers would have to cover, and consumers would have to buy.
Compelling the young and healthy to underwrite the coverage of the old and sick might take care of the problem of the hard-to-insure, but that didn’t address the concern for a larger group without insurance. Democrats had spent the 2008 election debating how to cover the millions of individuals and families who wanted coverage and could qualify for it, but couldn’t readily afford it: Working-class Americans with unreliable access to regular care who lived in dread of a catastrophe that would wreck them both physically and financially.
One answer Democrats found was to provide subsidies for individual buyers in the marketplaces through tax credits they could cash in for coverage. But the bigger piece of the puzzle was to dramatically expand Medicaid, turning a welfare program created to provide insurance for the very poor, into something available to the working class: Those making up to 138 percent of the federal poverty level (about $30,000 for a two-person household today).
But Medicaid was already a hugely expensive program. In order to get anxious moderates in his party on board, then-President Obama had promised to keep the overall price tag for the first 10 years of the program under $1 trillion. So what to do? Make it somebody else’s problem, of course.
Medicaid is really a state program. Federal tax-dollars subsidize about 70 percent of the costs overall, but the administration of benefits and the remaining 30 percent of the costs are borne by the states. What if they balked at the expansion? So the law declared a third mandate: States would have to expand their programs.
But when the Supreme Court in 2012 ruled that the individual mandate at the heart of the legislation was just a tax by another name and was therefore legal, the Roberts Court struck down the state mandate. The feds could not compel states to sign up for huge new expenses. That meant that when the program opened up in 2014, about half of the states — mostly Republican ones — held out.
But as time went by, state after state joined the program, a trend that was helped along by the massive influx of federal aid money during the coronavirus pandemic. Now, only 10 states don’t participate, with some 20 million Americans enrolled through the ObamaCare Medicaid expansion. And many of those folks live in poor states in Appalachia and the South, which is to say, red states. Louisiana, Kentucky, West Virginia, Arkansas and Mississippi are all in the top 10 states for Medicaid beneficiaries per capita.
Republicans have been very happy to reap the electoral benefits of being the party of the working class. Indeed the migration of lower-middle-class Americans from blue to red may be the most significant shift in political demographics so far this century. But when the GOP got the voters, they also got the headaches.
So, here we are, 15 years after the Obama Democrats turned themselves into pretzels trying to pay for an expanded social safety net to benefit one of the party’s core constituencies. Now, Republicans have many of those voters in their column, but are trying to turn the pretzel in reverse.
To appease GOP fiscal hawks, the Trump administration is looking for $2 trillion in spending cuts to finance massive tax reductions. And even in the light most favorable to President Trump’s chainsaw man, Elon Musk, his reductions to the federal bureaucracy won’t produce anything like that.
Covetous eyes now fall upon ObamaCare outlays. There’s the $91 billion a year that pays for subsidies for private insurance, but the real prize is the $138 billion the feds spend annually on Medicaid for the working class. If Congress could make significant cuts there, the 10-year multipliers could get Republicans close to their goals.
But, like Obama, Trump has made some promises that complicate the budgeters’ work. Trump has vowed that there will be no federal cuts to any of the big-three programs: Social Security, Medicare and Medicaid.
But what if they said they weren’t going to cut any benefits but got to cut expenditures? And so, we return to the tried-and-true solution: Make it somebody else’s problem.
House Republicans are looking to get $880 billion out of Medicaid cuts but are trying a new spin: They’re not cutting benefits, just expenditures. States can feel free to make up the difference in costs and keep coverage exactly as it is. Let the governors take the heat if voters don’t like it.
A dozen states have “trigger” laws that drop state participation if the federal cash flow is reduced. Many others would be forced to do the same. And, again, the burden would fall disproportionately on residents of red states. Linguistic tricks in Congress won’t be much comfort when those bills come due.
The GOP of a decade ago might have been able to make that one stick, but one wonders if the new party of the working class really has the stomach for it.
