The Bigger Story, and Agenda, Behind GOP Changes to Obamacare, Medicare and Medicaid

This column was published as a Wall Street Journal Think Tank column on November 21, 2016.

Early media coverage of the Republican health-care agenda has concentrated on plans to repeal and then replace the Affordable Care Act. The larger story is GOP preparations for a health policy trifecta: to fundamentally change the ACA, Medicaid and Medicare–all three of health care’s major programs–and in the process, fundamentally alter the direction of the federal role in health and core elements of the social contract.

The expected proposals seek to end federal entitlement spending in health as it has been known by capping federal financial exposure through fixed-dollar insurance tax credits, Medicaid block grants, and voucher-like supports for Medicare premiums. Legislative details haven’t been released yet, but Republican plans are likely to shift costs to individuals and states as well as reduce consumer protections–and result in a significant increase in the number of uninsured. Conservatives who have long favored these changes view them positively; they want to reduce government regulation and federal spending, give consumers more choices in the marketplace, drive down costs by promoting high-deductible insurance coverage, and give states greater flexibility to tailor health programs to their own preferences and needs.

Whatever the pros and cons, these would amount to the biggest changes in the direction of federal health programs since the passage of Medicaid and Medicare.

Each proposal to change these programs contains potential trap-door issues. Would protections for people with pre-existing conditions be eroded in Republican ACA replacement plans, and to what extent? Would states lose money in a Medicaid block grant, and with what consequences? Would the ACA marketplaces break down in confusion if there is an interregnum between repealing and replacing the ACA? How would Medicare premium supports be indexed, and would future Medicare beneficiaries be able to afford the care they need once it is phased in? These are just a few of the subjects to be examined closely.

The media, whose credibility Donald Trump undermined in the presidential campaign, will be challenged to explain the stakes involved in such sweeping changes. It will be all the more difficult to inform a meaningful national discussion if a Republican Congress moves quickly, attaches many changes to budget reconciliation bills, and limits political accountability by deferring implementation of an ACA repeal plan until after the 2018 elections and/or a Medicare premium support plan until 2024. Mr. Trump’s reaction to media coverage on these issues and polling about these changes, particularly on popular programs such as Medicare and Medicaid, is an important unknown.

Among the critical things to be reported: comparisons of forthcoming plans with current law in ways that show how they would affect people and who the winners and losers will be. It should not be surprising if Republican plans do not achieve the same things Medicare, Medicaid, and the ACA do today because Republicans are pursuing different objectives.

During the 2012 presidential campaign, in an admirable act of political honesty, Sen. Orrin Hatch said that “conservatives cannot allow themselves to be browbeaten for failing to provide the same coverage numbers as Obamacare. … [W]e cannot succumb to the pressure to argue on the left’s terms.” An important point in the coming health policy debate is to clarify objectives in repealing and replacing the ACA and in fundamentally changing Medicaid and Medicare. The deeper issue is not about whether one is for the Republican health-care trifecta or opposes it but understanding that Republicans are not setting out to replace the ACA with something that does the same job “better” or to “reform” Medicaid and Medicare to make the current programs work better. The word “reform” has become a loaded term; it means different things to liberals and conservatives and would probably be inappropriate to most news coverage in this debate. The challenge is to clarify how conservative policy goals differ from liberal policy goals, to describe how Republicans would change the federal role in health, and to explain what the changes would mean for Americans.

News cycles are often driven by juicy stories focusing on the most controversial policy changes and the partisan politics they stoke. So among the media’s toughest challenges may be treating the proposed changes to Medicare, Medicaid, and the ACA not only as many separate stories and incremental updates but as one larger story, and to lay out the consequences–potentially good and bad–of such significant change in the federal role in health so people can make informed judgments about it.

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