Health Care Concepts for a GOP Congress
Democrats laughed at Donald Trump when he said he had “concepts of a plan” for healthcare. Here’s a specific idea: Congress can let a Biden-era increase in ObamaCare subsidies expire as scheduled at the end of 2025. That would eliminate a major source of fraud by reducing the number of people who qualify for zero-premium insurance coverage. As they look set to win unified control in Washington, Republicans can pursue at least four further healthcare changes as part of a budget-reconciliation process.
First, undo Biden administration regulations that extend ObamaCare subsidies to certain dependents and Deferred Action for Childhood Arrivals recipients. These extensions came thanks to unilateral Biden regulatory changes and cost billions of taxpayer dollars. Reversing these provisions via law rather than regulation would repeal them more quickly and prevent a future administration from reversing course.
Second, repeal Section 9814 of the American Rescue Plan Act of 2021, Democrats’ Covid spending blowout. The provision provides a temporary increase in the federal Medicaid match rate if any of the 10 states that originally declined ObamaCare’s Medicaid expansion change their mind. That’s a $13.1 billion inducement for states to spend more on healthcare in expansions that would primarily favor able-bodied adults.
Third, impose a moratorium on Medicaid provider taxes, which are levied on health practitioners to fund state Medicaid programs. According to Politico, these levies are “a tax no one really pays.” States use the revenue to generate more federal matching funds for those health practitioners, a maneuver Joe Biden reportedly dubbed a “scam.”
The financial burden of this scam rose roughly tenfold between 2010 and 2022, according to analyses by the National Committee on Fiscal Responsibility and the Congressional Budget Office. This is in part because the progressive healthcare nonprofit Families USA and other medical associations have recommended this funding gimmick as a means for states to finance their 10% share of the costs of Medicaid expansion. An end to new provider taxes would at minimum prevent this legalized legerdemain from expanding further.
Finally, require healthcare demonstration projects, which pilot new ways to deliver health services, to remain budget-neutral. In 2014, the Government Accountability Office found that federal officials authorized about $778 million in excess spending for an Arkansas Medicaid waiver. In other words, the Obama administration offered a taxpayer-funded inducement for a red state to accept Medicaid expansion. The Biden administration continued the pattern by offering temporary subsidies to insurers offering Medicare prescription-drug coverage, which the CBO says will increase federal spending by $5 billion in 2025. Eliminating these types of giveaways would restore lawmakers’ power of the purse.
Depending on the final size of their House majority, Republicans may be able to pursue work requirements and Medicaid block grants. They could also alter ObamaCare insurance regulations that hiked individual market premiums by 105% between 2013 and 2017, the four years after the law’s main provisions took effect. The concept of these plans—fiscal responsibility—would provide a welcome change to Washington.
This post was originally published at The Wall Street Journal.