Health Care Race to the Bottom

By now we should all understand that if you put together GOP plans to repeal the Affordable Care Act and also “block-grant” Medicaid, tens of millions of Americans would quickly lose access to affordable health care. If you buy the conservative health care philosophy, and/or believe Republican claims of interest in something approaching universal health coverage, some of these unfortunate people might regain access to minimal levels of care via high-risk pools and tax credits. But that’s obviously not a very high priority for the GOP, which according to its own rhetoric is more interested in holding down health care costs by encouraging “individual responsibility” (i.e., paying your own medical bills) for health treatments and outcomes.

But aside from the issue of the Republican Party’s “market-based vision” of the overall health care system, its commitment to a devolution of responsibility for public health care programs affecting low- and middle-class Americans who have not reached retirement age has its own destructive dynamics. At The Incidental Economist, my friend Harold Pollack makes the essential but rarely understood point on this subject:

States have long worried about becoming “welfare magnets,” attracting poor people to make similar moves. There is a lively empirical debate about how often this actually occurs. Poor people are less mobile than you might think. As a political matter, no state wants to become a magnet for such inflows. From a national perspective, this dynamic promotes a “race to the bottom,” in which states seek to offer less generous benefits than they otherwise would. This race to the bottom is reinforced by deep ideological and economic differences across state lines.

Before Social Security and Medicare, these same debates once occurred regarding state efforts to help impoverished or sick elderly people who could no longer care for themselves. Today, no politician would self-immolate by suggesting the block-granting Medicare or otherwise devolving supports for seniors to state governments.

We have not achieved the same consensus regarding health care for poor people or the disabled. In 1965, Medicaid established national minimum benefits, and provided national resources. ACA expanded these national commitments, devoting federal resources to finance near-universal coverage. On the surface, the health reform fight includes technocratic disputes over budget estimates and over which level of government is best-equipped to provide needed services. The real fight is much deeper than that.

There’s a remarkable historical inversion going on in this GOP effort to unravel a national commitment to low-income health care, by the way: what ultimately became “Medicaid” began as the Republican Party’s alternative to the universal, national health care system first promoted by Harry Truman and eventually established, for seniors only, in Medicare. Now Republicans claim to be championing Medicare (although simultaneously unraveling it via various efforts to cap or voucherize benefits and privatize its insurance function) by pitting it against ACA and Medicaid.

There is a natural partisan-political and ideological affinity for today’s Republicans to pursue this old folks versus poor folks strategy, of course. With the two parties increasingly polarized by age and race/ethnicity, GOPers have every political reason to place the vitiation of Medicare (and for that matter, Social Security) on the back burner, and treat health care for non-seniors as “welfare,” designed for those improvident and/or darker people, to be devolved to the tender mercies and inflexible budgets of state governments. (Yes, a big portion of Medicaid spending goes to long-term care for the elderly, but not necessarily the elderly who vote Republican).

But beyond the brutal generational politics of the matter, Republican efforts to treat Medicare and Medicaid so very differently relies on the belief of many seniors that the former is an “earned benefit” or a self-funded program (via payroll taxes and premiums, which only cover about half of Medicare benefits) while the latter is a “redistribution” program or “welfare.” This is the flaw in the conviction of some progressives that “Medicare for all” is the winning magic formula for achieving universal health coverage: few conservative seniors will support “Medicare for all” if it includes those people who haven’t “earned” it or paid for it.

In any event, Republican fiscal and health care proposals would decisively decouple health care treatment of the elderly and the poor/disabled (along with the middle-class uninsured that would be covered via ObamaCare) and send the latter straight into a race-to-the-bottom negative competition among states that is sure to ratchet down coverage, particularly as federal cost-sharing is steadily reduced (as the Ryan Budget would guarantee). It’s an aspect of the health care and budget debates that deserves vastly more attention than it has yet received from either party.

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.