The Nobel prize-winning economist, Paul Krugman, more recently turned partisan flack for the New York Times, has occasionally referred to Republicans as “the stupid party.” After the debacle with the House’s American Health Care Act, maybe he is right. This bill is far from perfect but is a step in the right direction. Its major virtue is a serious attempt to get Medicaid spending under control.
According to an astute analysis by the Wall Street Journal:
- The AHCA would put Medicaid on a budget for the first time since its creation in 1965.
- Medicaid insures more than 72 million people, or one in every five Americans.
- Medicaid is now the third largest, and fastest growing, program in the federal budget. Federal outlays are now $360 billion per year, more than three times as much as in 2000.
- The federal government matches between 50% and 74% of state costs for Medicaid recipients, which means that the states have little incentive to control spending by allocating resources toward high quality care for the most vulnerable.
- A 2013 study by the New England Journal of Medicine found that “Medicaid generated no significant health improvements,” compared to the uninsured.
- The AHCA would transition federal funding to a per-capita block grant that would grow with an index of medical inflation. In exchange, governors would gain reform flexibility over the current rigid rules.
Conclusion. It is completely nonsensical for the House Freedom Caucus to oppose such an attractive reform plan just because it isn’t perfect. The members of the Freedom Caucus claim to be fiscal conservatives and to support balanced budgets. And yet they refused to take a simple, practical step to work toward that goal.