Next week, one of the most important pieces of legislation to come before Congress this year will be voted on by the Senate. It’s the latest and perhaps final Republican proposal to replace Obamacare.
It’s primarily the product of South Carolina Senator Lindsey Graham and Louisiana Senator Bill Cassidy. Senator Cassidy is a physician, which is worth noting. Five Senators ultimately helped shape the bill �" the next two to mention are Nevada’s Dean Heller and Wisconsin’s Ron Johnson. That’s why the bill is sometimes called the Graham-Cassidy-Heller-Johnson bill, or GCHJ.
But the fifth Senator to have a major impact on the content and strategy for the bill is former Pennsylvania Senator Rick Santorum, and he may have been the most influential of all, even though behind the scenes. He brought his experience in shaping welfare reform in the 1996 bill to the current healthcare reform effort. He was the originator, prime force, and, ultimately, Senate floor manager of the welfare reform bill. He was also the original conceptualizer of this and author, because he is the one who first planted the idea with Senator Lindsey Graham.
All of this is relevant for one overwhelming reason: the central feature of the welfare reform bill of 21 years ago is the central feature of the healthcare reform bill of 2017, and that’s the way it block-grants federal funds to the states. That’s an inherently conservative idea, based on the Tenth Amendment that states that any power that is not given to the federal government under the Constitution is reserved to the states or the people. The US Constitution does not give the federal government any obvious power to regulate healthcare. Now, I’ll readily concede that most have long forgotten the notion of a federal government that is limited to certain enumerated powers �" but the readers of Pennsylvania Town Hall may be among that faithful remnant that reveres and wants to uphold our Constitution, and for whom the Tenth Amendment is relevant and meaningful.
The reason I used the word “overwhelming” a few moments ago to describe block grants as the central feature of the new GOP healthcare bill is because achieving the proposed structure is so important that all other objections to the bill should be overwhelmed by it. Senator Susan Collins of Maine has voiced objections based solely on the fact that the new bill would reduce federal healthcare revenues to the state by less than 1 and ¼ percent of the state budget. This is exactly the kind of reaction to federalism. A well-designed, well-run state program could achieve efficiencies greater than that small shortfall. Furthermore, any genuine inequities in funding can be adjusted in subsequent years.
Senator Rand Paul claims that this new bill is Obamacare Lite. No. It’s whatever a given state wants it to be, within some limits, but it’s in no way limited to a light version of Obamacare. Jimmy Kimmel claims that the bill wouldn’t cover pre-existing conditions adequately. The Nursing Home trade association fears Medicare and Medicaid cuts. Both objections are at least partially wrong, but that’s not the point. Those things can all be fixed later. The one thing that can only be fixed now, and before the end of the month, is enacting the basic concept of block grants.
Saturday September 30th is the very last day that the Senate can approve the bill under the reconciliation rule that avoids filibuster. Tweak the dollars later if need be, and, try to do so on a bipartisan basis, but for right now, the primary focus of every Republican senator should be on the transformational, long-term benefits of block granting the program rather than running healthcare as a monolithic federal program.
There really are only three viable options to the future of healthcare financing in America. Simply eliminating the benefit �" that is to say, repealing Obamacare without replacing it �" is utterly unrealistic. So, the three options are permanent ObamaCare, which is collapsing and financially unsustainable, Bernie Sanders’ single-payer socialized medicine and Santorum-Graham-Cassidy that block grants federal healthcare money to the states. That sets the stage for state-based innovation, and those states who don’t want to innovate but want to keep their state in a plan that’s basically Obamacare without changes are free to do that too.
The model is the 1996 welfare reform approach. It worked. It reduced unemployment, promoted and incentivized work and restored dignity and independence to millions of previously dependent citizens. Santorum-Graham-Cassidy-Heller-Johnson can do something similar for healthcare. The dollars can be tweaked later, but the chance to change the basic funding model to block grants expires on September 30, never to occur again. Every Republican Senator should look at the big picture and vote for it. The only alternatives are unacceptable.