Frenemies of the States

At Mother Jones today, Nick Baumann has a revealing article on a fine bit of Republican hypocrisy regarding the power of the states in health care policy. In a bill designed to implement the Ryan/Romney policy of turning Medicaid into a block grant enabling states to restrict eligibility or cut benefits as federal funding is steadily reduced, there’s a provision that would actually reduce state flexibility to use their own funds for one kind of service–you guessed it, abortion.

Rep. Todd Rokita’s (R-Ind.) State Health Flexibility Act, also known as HR 4160, contains a provision that would force 17 states, including California, Massachusetts, and New York, to either discontinue programs that help low-income women pay for abortions, or spend a lot more money to purchase new insurance plans for those women….

Rokita’s bill “would be a significant change from how current law operates today,” adds Judy Waxman, the vice president for health and reproductive rights at the National Women’s Law Center. Timothy Jost, a health law expert at Washington & Lee University’s law school who identifies as pro-life, also believes the bill would change the status quo. “Current law allows states to spend their own money on medically necessary abortions if they do not spend [federal matching funds] on it,” Jost wrote in an email. “This doesn’t seem to be what the provisions…say.”

Requiring states to purchase separate abortion-only plans “would be a change and one that would be harmful to women in those states,” Waxman says, noting that the current structure has stood for decades without interference from Republican or Democratic administrations.

The whole idea here is to expand the long-standing Hyde Amendment prohibiting use of federal Medicaid dollars to the use of state dollars in conjunction with Medicaid. It’s a power grab made all the more interesting by its inclusion in a bill dumping low-income health care policy and costs on the states in the name of federalism. As Baumann puts it, when it comes to abortion, Republicans want to “give the federal government the final word: no.”

This is hardly unique. On the larger canvas of GOP proposals to “replace” the Affordable Care Act if it is repealed by a Republican-controlled Congress or overturned by a conservative-controlled Supreme Court, Mitt Romney and many of his colleagues repeatedly say they want the states to take the lead in figuring out what if anything to do about people with no access to affordable health insurance, as opposed to any “one size fits all” federal solution. But one of the few federal “reforms” almost all Republicans support is the innocuous-sounding idea of allowing interstate insurance policy sales, which will supposedly increase competition and reduce costs. In fact, the one thing for sure this “reform” would do is to destroy the power of the states to regulate health insurers, as Ezra Klein has succinctly explained:

Insurance is currently regulated by states. California, for instance, says all insurers have to cover treatments for lead poisoning, while other states let insurers decide whether to cover lead poisoning, and leaves lead poisoning coverage — or its absence — as a surprise for customers who find that they have lead poisoning. Here’s a list (pdf) of which states mandate which treatments.

The result of this is that an Alabama plan can’t be sold in, say, Oregon, because the Alabama plan doesn’t conform to Oregon’s regulations. A lot of liberals want that to change: It makes more sense, they say, for insurance to be regulated by the federal government. That way the product is standard across all the states.

Conservatives want the opposite: They want insurers to be able to cluster in one state, follow that state’s regulations and sell the product to everyone in the country. In practice, that means we will have a single national insurance standard. But that standard will be decided by South Dakota. Or, if South Dakota doesn’t give the insurers the freedom they want, it’ll be decided by Wyoming. Or whoever.

We’d see exactly the same scenario as occurred back in 1980 when credit-card issuers cut a deal with South Dakota to become the credit-card capital of the country:

The i[health insurance] industry would put its money into buying the legislature of a small, conservative, economically depressed state. The deal would be simple: Let us write the regulations and we’ll bring thousands of jobs and lots of tax dollars to you. Someone will take it. The result will be an uncommonly tiny legislature in an uncommonly small state that answers to an uncommonly conservative electorate that will decide what insurance will look like for the rest of the nation.

And the rest of the states, of course, would be prohibited by federal law from doing anything about it. You think today’s system discriminates against poorer, sicker people? Just wait and see what it would look like with interstate insurance sales!

Yeah, Republicans just love federalism, devolution, “subsidiarity” and all those other reasonable-sounding theories of decentralization so long as they help sell the abandonment of national responsibilities. But as often as not, their real goal is abandonment of public responsibilities at every level of government, or the imposition of conservative policies (like banning abortion or killing insurance regulation) on all levels of government. Form simply follows function, and the GOP is as likely to be hostile as friendly to the states–call them “frenemies.”

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.