To be continued
In North Carolina politics, I think the next big plot twist will involve Medicaid expansion. Gov. Pat McCrory has signaled that he will seek federal waivers for some kind of expansion in 2015, possibly following in the footsteps of fellow GOP Gov. Mike Pence of Indiana. Senate leader Phil Berger and other key legislators seem disinclined to go along, noting that Pence has yet to get what he wants from Washington and other Republican governors have, in the end, settled for relatively minor tweaks in Medicaid-expansion rules in exchange for “free” money.
If your long-term goal is Medicare/Medicaid for all — a single health-care payer under government control — then you’re happy with such an outcome. So is the hospital lobby, which actually gets most of the money in question. But for the rest of us, expanding Medicaid has always been the wrong solution to the right problem, which is inadequate access to necessary care by those who lack employer-based health coverage and the generous tax subsidies attached to it.
Though I can understand the intense pressure on state leaders to capitulate on Medicaid expansion, they should resist it. Thom Tillis’s victory and the Republican takeover of the U.S. Senate have dramatically changed the situation. The best course for North Carolina is to wait to see what reforms the new Republican Congress may be able to enact in 2015 and 2016. Obviously, President Obama would veto any repeal of the Affordable Care Act itself, but that doesn’t mean there aren’t ways its features might be modified, with the president’s acquiescence, to enable a more market-driven approach to reform.
A year ago, Obamacare was widely predicted to be the signature election issue of 2014. As the campaign unfolded, however, other events — state legislation here in North Carolina, Ebola and the ISIS crisis elsewhere — made headlines. So the conventional wisdom swung too far in the other direction, to the notion that President Obama’s primary domestic-policy achievement was no longer a key issue in the midterm elections.
That’s nonsense. Public disaffection with Obamacare played a key role in the Republicans’ Senate wins and widened majority in the U.S. House. According to an analysis by New York-based Kantar Media, about a quarter of all the political ads run from January to mid-October were about health care. During the final two weeks of October, GOP candidates and conservative independent-expenditure groups concentrated even more on Obamacare in their advertising, running about twice as many spots on the issue as they did on the economy and more than they ran on foreign affairs and immigration combined.
The Republicans won nearly all of the close races because they successfully turned the midterm election cycle into a referendum on Obama’s record. Health care was central to their strategy. The Affordable Care Act remains unpopular. On Election Eve, the spread of approval vs. disapproval of the law averaged minus-12 percentage points by the Huffington Post’s calculation and minus-14 points according to RealClearPolitics. On this matter, the public’s judgment is sound. Contrary to the original promises about the law, we now know that it will increase rather than reduce federal spending and the national debt over time, that insurance premiums are rising for plans inside and outside the exchanges (including large hikes for Blue Cross plans here in North Carolina) and that its mandates and perverse incentives will hamper job creation and economic growth.
Yes, there has been a recent decline in medical-cost inflation, to just 3.6% in 2013 — but it wasn’t caused by Obamacare. The trend predates it. The rate of growth in medical costs began falling about a decade ago, thanks in part to Bush-era reforms that accelerated the spread of health savings accounts and consumer-driven health plans. According to the Obama administration’s own estimates, health-care spending is projected to start rising at a faster rate, 5.6% in 2014 and an annual average
of 6.1% from 2016 to 2023.
The political implications from all this are obvious. Even some Democrats have mentioned such reforms as lifting or easing the employer and individual mandates and allowing lower-cost options (scaled-down “Copper” plans and those with HSAs attached to them) onto the exchanges. On Medicaid, the new Congress will likely propose that states be allowed to use tax credits and other subsidies to place lower-income beneficiaries into private plans, including those with real cost-sharing and other features to contain wasteful spending and reduce overall cost.
Rather than simply sign onto a flawed set of federal policies, North Carolina should hold out for a better deal. There is no shortage of Obamacare alternatives advocated by Republicans and conservative experts. All of them include some kind of subsidized coverage for individuals not currently eligible for Medicaid. If North Carolina and other states continue to demand better from Washington than simpleminded Medicaid expansion, that makes the enactment of such alternatives more likely. Rather than take precipitous action, state leaders should wait to see what happens in the next episode of the serial.