“Enumerated Powers” And The Radicalism of The GOP Thought Process
Republican presidential hopeful Rick Perry chatted with The Daily Beast yesterday, and was asked about his understanding of “general welfare” under the Constitution. The left, the Texas governor was told, would defend Social Security and Medicare as constitutional under this clause, and asked Perry to explain his own approach. He replied:
“I don’t think our founding fathers, when they were putting the term ‘general welfare’ in there, were thinking about a federally operated program of pensions nor a federally operated program of health care. What they clearly said was that those were issues that the states need to address. Not the federal government. I stand very clear on that. From my perspective, the states could substantially better operate those programs if that’s what those states decided to do.”
It’s worth pausing to appreciate the radicalism of this position. When congressional Republicans, for example, push to end Medicare and replace it with a privatized voucher scheme, they make a fiscal argument — the GOP prefers to push the costs away from the government and onto individuals and families as a way of reducing the deficit.
But Perry is arguing programs like Medicare and Social Security aren’t just too expensive; he’s also saying they shouldn’t exist in the first place because he perceives them as unconstitutional. Indeed, when pressed on what “general welfare” might include if Medicare and Social Security don’t make the cut, the Texas governor literally didn’t say a word.
Now, this far-right extremism may not come as too big a surprise to those familiar with Perry’s worldview. He’s rather obsessed with the 10th Amendment — unless we’re talking about gays or abortion — and George Will recently touted him as a “10th Amendment conservative.” Perry’s radicalism is largely expected.
It’s worth noting, then, that Mitt Romney seems to be in a similar boat. He was asked in last night’s debate about his hard-to-describe approach to health care policy, and the extent to which his state-based law served as a model for the Affordable Care Act. Romney argued:
“There are some similarities between what we did in Massachusetts and what President Obama did, but there are some big differences. And one is, I believe in the 10th Amendment of the Constitution. And that says that powers not specifically granted to the federal government are reserved by the states and the people.”
What I’d really like to know is whether Romney means this, and if so, how much. Because if he’s serious about this interpretation of the law, and he intends to govern under the assumption that powers not specifically granted to the federal government are reserved by the states and the people, then a Romney administration would be every bit as radical as a Perry administration.
After all, the power to extend health care coverage to seniors obviously isn’t a power specifically granted to the federal government, so by Romney’s reasoning, like Perry’s, Medicare shouldn’t exist. Neither should Social Security, the Civil Rights Act, the Clean Air Act, student loans, FEMA, or many other benchmarks of modern American life.
And if Romney doesn’t believe this, and he’s comfortable with Medicare’s constitutionality, maybe he could explain why the federal government has the constitutional authority to bring health care coverage to a 65-year-old American, but not a 64-year-old American.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, August 12, 2011
Medicare Saves Money: Ensuring Health Care At A Cost The Nation Can Afford
Every once in a while a politician comes up with an idea that’s so bad, so wrongheaded, that you’re almost grateful. For really bad ideas can help illustrate the extent to which policy discourse has gone off the rails.
And so it was with Senator Joseph Lieberman’s proposal, released last week, to raise the age for Medicare eligibility from 65 to 67.
Like Republicans who want to end Medicare as we know it and replace it with (grossly inadequate) insurance vouchers, Mr. Lieberman describes his proposal as a way to save Medicare. It wouldn’t actually do that. But more to the point, our goal shouldn’t be to “save Medicare,” whatever that means. It should be to ensure that Americans get the health care they need, at a cost the nation can afford.
And here’s what you need to know: Medicare actually saves money — a lot of money — compared with relying on private insurance companies. And this in turn means that pushing people out of Medicare, in addition to depriving many Americans of needed care, would almost surely end up increasing total health care costs.
The idea of Medicare as a money-saving program may seem hard to grasp. After all, hasn’t Medicare spending risen dramatically over time? Yes, it has: adjusting for overall inflation, Medicare spending per beneficiary rose more than 400 percent from 1969 to 2009.
But inflation-adjusted premiums on private health insurance rose more than 700 percent over the same period. So while it’s true that Medicare has done an inadequate job of controlling costs, the private sector has done much worse. And if we deny Medicare to 65- and 66-year-olds, we’ll be forcing them to get private insurance — if they can — that will cost much more than it would have cost to provide the same coverage through Medicare.
By the way, we have direct evidence about the higher costs of private insurance via the Medicare Advantage program, which allows Medicare beneficiaries to get their coverage through the private sector. This was supposed to save money; in fact, the program costs taxpayers substantially more per beneficiary than traditional Medicare.
And then there’s the international evidence. The United States has the most privatized health care system in the advanced world; it also has, by far, the most expensive care, without gaining any clear advantage in quality for all that spending. Health is one area in which the public sector consistently does a better job than the private sector at controlling costs.
Indeed, as the economist (and former Reagan adviser) Bruce Bartlett points out, high U.S. private spending on health care, compared with spending in other advanced countries, just about wipes out any benefit we might receive from our relatively low tax burden. So where’s the gain from pushing seniors out of an admittedly expensive system, Medicare, into even more expensive private health insurance?
Wait, it gets worse. Not every 65- or 66-year-old denied Medicare would be able to get private coverage — in fact, many would find themselves uninsured. So what would these seniors do?
Well, as the health economists Austin Frakt and Aaron Carroll document, right now Americans in their early 60s without health insurance routinely delay needed care, only to become very expensive Medicare recipients once they reach 65. This pattern would be even stronger and more destructive if Medicare eligibility were delayed. As a result, Mr. Frakt and Mr. Carroll suggest, Medicare spending might actually go up, not down, under Mr. Lieberman’s proposal.
O.K., the obvious question: If Medicare is so much better than private insurance, why didn’t the Affordable Care Act simply extend Medicare to cover everyone? The answer, of course, was interest-group politics: realistically, given the insurance industry’s power, Medicare for all wasn’t going to pass, so advocates of universal coverage, myself included, were willing to settle for half a loaf. But the fact that it seemed politically necessary to accept a second-best solution for younger Americans is no reason to start dismantling the superior system we already have for those 65 and over.
Now, none of what I have said should be taken as a reason to be complacent about rising health care costs. Both Medicare and private insurance will be unsustainable unless there are major cost-control efforts — the kind of efforts that are actually in the Affordable Care Act, and which Republicans demagogued with cries of “death panels.”
The point, however, is that privatizing health insurance for seniors, which is what Mr. Lieberman is in effect proposing — and which is the essence of the G.O.P. plan — hurts rather than helps the cause of cost control. If we really want to hold down costs, we should be seeking to offer Medicare-type programs to as many Americans as possible.
By: Paul Krugman, Op-Ed Columnist, The New York Times, June 12, 2011
GOP Supported Individual Mandate To Prevent ‘Government Takeover’ Of Health Care
The Los Angeles Times’ Noam Levey looks at the history of the individual health insurance mandate and discovers that not only was the provision designed by Republicans as an alternative to President Bill Clinton’s health care reform plan in the 1990s, but it was specifically seen as a way to prevent a “government takeover” of health care:
“We were thinking, if you wanted to achieve universal coverage, what was the way to do it if you didn’t do single payer?” said Paul Feldstein, a health economist at UC Irvine, who co-wrote the 1991 plan with Pauly.
Feldstein and Pauly compared mandatory health insurance to requirements to pay for Social Security, auto insurance, or workers’ compensation.
So too did the Heritage Foundation’s Stuart Butler, who in 1989 wrote a health plan that also included an insurance requirement.
“If a young man wrecks his Porsche and has not had the foresight to obtain insurance, we may commiserate, but society feels no obligation to repair his car,” Butler told a Tennessee health conference that year.
“But healthcare is different. If a man is struck down by a heart attack in the street, Americans will care for him whether or not he has insurance.… A mandate on individuals recognizes this implicit contract,” said Butler, who was the foundation’s director of domestic policy studies.
Levey notes that fully a third of Republicans supported a bill that included a national individual requirement, introduced by then-Senator and current Rhode Island Gov. Lincoln Chafee. Sens. Bob Dole (R-KS), Charles Grassley (R-IA), Orrin Hatch (R-UT), and Richard Lugar (R-IN) all backed that measure. The National Federation of Independent Business, a conservative small-business group, even “praised the bill ‘for its emphasis on individual responsibility.’”
And this wasn’t some fluke of the ’90s either. As recently as 2007, “[t]en Republican senators — including Tennessee’s Lamar Alexander, now a GOP leader — signed on to a bill that year by Bennett and Sen. Ron Wyden (D-Ore.) to achieve universal health coverage.” The legislation penalized individuals who did not purchase insurance coverage.
Listing all of the GOP presidential candidates who have previously supported the mandate (Romney, Gingrich, Huntsman, Pawlenty) would only belabor the point, which is that the GOP’s new-found religion on the mandate and its constitutionality is driven by the political need to unravel the Democrats’ crowning social achievement, not any great concerns about policy, constitutionality, or freedom.
By: Igor Volsky, Think Progress, May 31, 2011
It’s Not Just Entitlements, The Real Issue: Controlling All Health Care Costs
The current cry to reduce Federal deficits and debt growth by reducing Medicare and Medicaid entitlements is totally missing the key issue: the need to moderate all health care inflation. This should be the time for a national debate on how to best tackle the underlying cost problem, for the sake of our future, the economy, and access to health care.
The June 13-19, 2009 Economist editorialized: “America has the most wasteful [health] system on the planet. Its fiscal future would be transformed if Congress passed reforms that emphasized control of costs as much as the expansion of coverage that Barack Obama rightly wants.”
Health reform failed to get an adequate handle on all health care costs. Now there are constant calls by various expert commissions and many in Congress for entitlement spending reductions. Such cuts will create enormous new problems by failing to address the underlying, real problem of health costs and inflation.
Cutting just Medicare and Medicaid without addressing the whole problem is like squeezing a balloon—the balloon starts looking very strange very fast. While it is difficult to tell how much cost-shifting may occur and it will vary from market-to-market, some Medicare and Medicaid cuts probably get passed through in higher costs to the private sector—hardly a helpful action. (Congressional Budget Office, December 2008, Key Issues in Analyzing Major Health Insurance Proposals, p. 116) Cuts that are too deep in Medicare will also end up causing providers to be reluctant to see seniors and people with disabilities—as happens all too often today in Medicaid. In time, quality may be threatened.
And Medicare and Medicaid are not particularly driving the problem of soaring health care costs. As various studies have shown, over the long haul, Medicare has probably inflated slightly less rapidly for a comparable package of services than the private sector has. Recent reports by the Medicare Payment Advisory Commission (MedPAC) show that high quality, efficient hospitals have made a little money on Medicare, while private insurers have often failed to control costs, and have paid less effective hospitals 132 percent of the costs of running an efficient hospital. (See, for example, MedPAC’s March 2009 Report to Congress, Section 2A.)
A Comprehensive Approach To Health Care Cost Containment
It is past time for a comprehensive solution to ensure the affordability of a fundamental need: access to health care. We should say that access to reasonably affordable health care is a basic national need, like access to clean water and air, and treat it like a regulated utility—like your water–where cost growth is kept within a reasonable range and where a reasonable quality service is widely available (but if you want to go buy Perrier, you can).
Instead of squeezing one part of the health care cost balloon (Medicare and Medicaid), we need an “all saver” system. Under this system, any provider in the health care sector which inflates its billings faster than the growth in the CPI plus, say, one percent (adjusted for changes in population, new technologies, increased productivity, and changes in the severity of the cases that provider treats) would owe a rebate of the excess amount to its customers—both private and public. If the rebate were not provided, that excess income would face a 100 percent tax. The Federal government could do this under the Commerce clause, or, to enable providers and patients to opt out, could require participation by those accepting payment from Medicare, Medicaid, and payers claiming tax-deductible medical expenses.
How would the plan work? Complicated? Yes, but soon very doable with today’s health information technology systems and the coding systems developed by Medicare and others. It would take several years to set the system up, but it would work like this. Let’s say a hospital in a base year of 2013 had $100 million worth of billings. If consumer inflation were 4 percent and if the system allowed another 1 percent (just because we do highly value health care and some extra growth is a reasonable choice), then in 2014, the hospital could bill $105 million. (Let’s assume that an expensive new technology is available that costs an extra $1 million, but let’s also assume that increase is coincidentally offset by a national increase in productivity of 1 percent that saves about $1 million.)
If the hospital bills its customers $110 million in 2014, yet those customers are no sicker or more complicated to treat than in 2013 (as proven by the audited billing codes or adjusted for coding creep), the hospital will owe its customers $5 million in rebates. If Medicare paid 40 percent of the bills ($44 million), it would receive back 40 percent of the $5 million excessive inflation ($2 million). If a large employer’s health plan paid 20 percent of the provider’s bills, it would get $1 million back, and so forth.
If a provider did not want to participate, they could insist on only after-tax cash customers, and individuals would be free to use such doctors and hospitals.
Changing The Debate
Instead of focusing on Medicare/Medicaid cuts, Congress should be debating ideas of how to moderate all health care spending while minimizing interference in the practice of medicine. The plan I’ve described is just one option, and of course it would have to be adjusted to deal with many complexities. For example:
- How could the plan be made fair to new doctors and facilities with one-time extra start-up costs and no history of billings?
- How could the plan use quarterly payments or rolling averages to avoid many providers shutting down in December?
- How could society encourage further innovation, perhaps by offering more inflation for drugs certified as breakthroughs by the Food and Drug Administration?
- What cosmetic-type services could or should be exempt?
- What MedPAC-like advice and constitutional governance would be best?
Of course, if over the next decade reforms such as electronic medical records, comparative effectiveness research, and new bundling of the way we pay for services sufficiently ‘bends’ the spending curve downward, this system could be suspended. But it is doubtful those changes will do enough, and it is time to act on a comprehensive solution.
Incidentally, slowing all health care inflation would not only save enormous amounts in Medicare and Medicaid; over time it should achieve huge extra CBO/Joint Tax scorable savings, because the private sector and individuals will claim less in tax-deductible expenses for health care.
Budget reform that gets a handle on all health care inflation will solve most—or at least the toughest–of the ‘entitlement and future debt problems facing the nation. The entitlement problem is overwhelmingly a Medicare problem, driven not so much by more seniors or an aging population as by constantly soaring per capita costs of care. If we try to solve the entitlement problem just by cutting Medicare and Medicaid, we will destroy those programs. We need a total solution, because soaring health care costs are distorting the economy and our future as a successful nation.
Now is the time for this debate.
By: William Vaughan, Health Affairs Blog, Originally published March 3, 2011
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