I am starting to read through the Center for American Progress’s Medicare Extra proposal. It proposes to create a huge comprehensive public option with multiple buy-in points. It also replaces other government programs like CHIP and Medicaid with Medicare Extra. Most of the financing is federal. There is something that strikes me as odd with the Medicaid program:
Medicaid and the Children’s Health Insurance Program (CHIP) would be integrated into Medicare Extra with the federal government paying the costs….
States would be required to make maintenance-of-effort payments to Medicare Extra equal to the amounts that they currently spend on Medicaid and CHIP.22 ….
Why?
And I mean that from a policy angle and a political angle. Why does CAP want to charge states for a portion of low income health care expenses? From a policy angle, I am scarred by the 2008-2010 Great Recession. I want as many automatic stabilizers that are not tied to balance budget requirements as possible. One of the big chunks of the stimulus bill was an enhanced federal Medicaid payment rate which allowed states to not cut budgets as deeply as they normally would have. We don’t want 50 Mini-Hoovers squeezing out Medicaid.
Secondly, and this is a political angle, state level buy-in to a proposal like this is probably likely to be a whole lot higher when the Feds could tell a state “You know, don’t worry about low income health care programs, we’ll take care of it and you can use that $3 billion a year on schools, roads, tax cuts or hookers and blow; your choice”
The support of governors was critical in the summer of 2017 because they saw their states directly benefit from the ACA’s Medicaid expansion. Taking away a problem will get a lot of governors’ to buy in as well.
I’m still reading and ruminating on the rest but this issue just seemed out of place with the rest of the document.
Ohio Mom
Can we just assume, given the source, which is CAP, that this is at best a pipe dream?
That you, David Anderson, will have fun pulling it apart and considering the “what ifs” but for the rest of us, all we need to know is that health care policy wonks continue to plan for a better day?
cervantes
I expect they see raising federal taxes as an obstacle. Sure, it reduces the state tax burden but it’s still going to be demagogued as a huge tax increase. That’s always the problem with trying to federalize health care costs. People don’t get see their health care premiums because it’s just money that was never in their paycheck in the first place.
David Anderson
@Ohio Mom: I think there is value in looking at what CAP is proposing because it is a decently fleshed out draft outline of what could be next in a Democratic Trifecta. The skeleton of the ACA was fleshed out over six or seven years and dozens of white papers and think tank proposals. Good ideas were stolen, rough edges smoothed down, stakeholders appeased so that by the summer of 2007 the three major viable Democratic candidates (Obama, Clinton, Edwards) were all proposing things that were 90% similar to each other and had more than a passing sibling resemblance.
The point of this post is to identify a potential rough edge that may need to be smoothed down in another iteration.
Ryan
“Why? And I mean that from a policy angle and a political angle. Why does CAP want to charge states for a portion of low income health care expenses?”
Because we are Democrats, and if Democrats can do anything, it is self-sabotage in the endless and pointless quest to prove to the David Broders of the world that we are responsible and thoughtful, irrespective of the policy, which you rightly point out, argues against states having to chip in if they cannot borrow during recessions.
David Anderson
@Ryan: and that is effectively the response I got from Topher Spiro (CAP’s healthcare lead). It’s a financin route not a healthcare delivery route.
? Martin
Well, our corporate overlords have given up on the government
This should scare the fuck out the industry. It’s not that Apple is moving some portion of their 100K employees out of the current health care system, it’s that a company with more money than many countries, who is capturing upwards of $.50 of every tech dollar spent in the US, is diversifying. There are 5 industries that are larger than tech that Apple can move into if they wish to continue growing:
Defense
Health
Energy
Transportation
Finance
Apple has their toes in 4 of those. They started their own energy company a few years ago. It’s the worst kept secret in the valley that they are working on autonomous vehicles. They have been steadily worming their way into the finance market as they’re now the largest contactless payment provider in the US and a few other countries.
The tech titans signaling that they are better off in-housing healthcare for their employees should scare the shit out of everyone whose focus has been on lobbying Congress. Kaiser Permanente started out as an in-house healthcare operation as well, but it didn’t stay that way. What’s more, Apple and Amazon aren’t going to play by the established rules which has favored stability of existing players rather than customer service.
And Apple just repatriated $250B to the US. They aren’t going to spend that money on factories which they don’t need. They’re going to spend it on growing their business, which means entering new markets. Amazon has pushed physical retail to its tipping point, they’re similarly looking for new sectors to move into.
Matt McIrvin
So, is the latest lawsuit to eliminate the ACA, on the grounds that Congress made it unconstitutional by removing the individual mandate so now it has to be thrown out entirely, likely to succeed? Sometimes I feel like the entire country is being run by trolls.
David Anderson
@Matt McIrvin: IANAL — I have no clue.
I do know that enough judges took King vs. Burwell as something other than a trolling attempt to not place odds against.
I also know that Kennedy and Roberts smacked down the plaintiffs pretty hard in King v Burwell and if they see that Congress can’t repeal the law, I am somewhat not petrified that they’ll allow a troll to repeal the law.
sherparick
@cervantes: Yea, I think this is it. CAP is a Washington Center Democratic and Liberal think tank with close links to the Washington political consultant class and the Democratic Congressional leadership. They would rather send the bill to the states then raise taxes (and frankly, this has been Republican’s strongest issue of for the last 40 years at both State and Federal level, we are the party that will not raise, and will try to cut, your taxes – this is how Republicans get elected governors in blue states like Massachusetts, Maryland, and Illinois, particularly after Democratic governors have raised taxes in slumps while at the same time cutting back on public services.) They were good budget hawks in 2009-10 and raised taxes to pay for the Affordable Care Act and it was one of the reasons they were slaughtered (besides the hysterical reaction on the right to Obama just being president.) A reminder that the Democrats are really not an “organized political party” as the old Will Rogers joke (I don’t belong to any organized political party, I am a Democrat), a collection of factions, tribes, and political operators who all have their own agendas and don’t really have any incentive (short term) to look at the other side’s interest (long term for Congressional Democrats, having state governors, secretary of states, and majorities in at least one of the houses in a state legislature is essential for regaining and keeping a majority, preventing gerrymandering, protecting and expanding voters’ rights, and checking the extremist elements of the Republican Party, but they loathe putting resources into that long term buildup at the expense of the upcoming election (hence the big footing in the Texas 23rd District by the DCCC).
Bob Hertz
I have never understood why planners like CAP and Bernie Sanders feel they have to fold Medicaid into a single payer plan. Why not leave it alone?
The CAP proposal in my first reading needs a lot more new taxes than the authors acknowledge. There is a schedule of premiums, all a percentage of income. I did a quick calculation, and my estimate is these premiums will cover about 60 per cent of the benefits cost. (at best)
This means that some sort of extra income and capital gains tax is required, and I mean in big numbers. Not just the pinprick taxes in the ACA, which raise about $34 billion a year from the rich. This has happened before, i.e.early enthusiasm for single payer followed by cold water after taxes are announced.