This week, Governor Rick Scott met with Rep. Tom Price, President-elect Donald Trump‘s nominee to oversee the federal Department of Health and Human Services, which is charged with oversight and administration of ObamaCare. Prior to the meeting, The Capitolist sat down with Governor Scott to discuss his vision for the future of health care reform.
Years from now, when ObamaCare has been reduced to little more than a case study in political science classes, Rick Scott envisions fifty unique but interconnected health policy laboratories – the states themselves – where the best ideas in each state are shared and adapted for deployment in other states.
This modular redesign of America’s health care system would rely heavily on Medicaid block grants that enable state leaders to custom-craft health policy in ways that best fits the needs of their citizens. This vision is radically different from the one-size-fits-all administration of Medicaid today, where the federal government collects tax dollars from each state, then redistributes the money in varying amounts, but not before requiring states to comply with a set of byzantine rules and regulations that offer little flexibility.
But there are progressive critics of Scott’s dream of getting Medicaid block grants, who point to the fact that states would be “on the hook” for any cost overruns if they exceeded the fixed amount provided by the federal government:
Under this [block grant] arrangement, the cost of the [Medicaid] program is shifted from the federal government to the states, which would be responsible for bearing the cost of any increases in Medicaid spending once the capped federal contribution is exhausted. SOURCE: Think Progress – The Case Against Medicaid Block Grants
Scott rejects this sort of progressive reasoning, where political pundits conveniently forget the original source of federal funding. “It’s our money to begin with,” Scott says. “I know how to spend it better than the bureaucrats in Washington. We have to maintain a safety net,” he explains, careful to assuage the fears of many who can’t get health insurance without regulatory and / or financial subsidies from the government. “But why shouldn’t we have all fifty states experimenting, figuring out what works? We should have fifty different laboratories, where I can watch what Texas is doing, and if something works there, I can implement it here.”
In some ways, that is similar to what ObamaCare tried to achieve when it offered states the opportunity to build their own health insurance exchanges. The problem, though, was that ObamaCare took a heavy-handed approach, attempting to shoehorn state health programs into a one-size-fits-all regulatory box that Republican governors and state legislators couldn’t abide with. Where President Obama expected Republican-governed states to seize the chance to customize their own health care exchanges within the overarching ObamaCare framework, the exact opposite actually occurred. Democrats embraced the chance to set up their own exchanges rather than let the federal government have complete control over health policy in their states. But so toxic was ObamaCare to Republicans, that they wanted nothing to do with the program whatsoever. Many states, including Florida and Texas, refused to take the bait, and the Obama Administration was forced to come in and set up federal exchanges. The net effect, politically, is that Obama and the Democrats have completely owned ObamaCare from top to bottom.
But that’s about to change. ObamaCare is failing, unsustainable, and doomed. Subsidies continue to eat a bigger and bigger share of the federal budget:
Using the methodology above, H&E estimates that the 2017 Silver benchmark plan will be 22 percent more expensive, on average, than 2016 benchmark plans. However, because of the distributions of the population in the marketplace and the lack of household income growth to match premiums, we expect the average monthly tax credit to increase by 26 percent to $367. If we assume that the proportion of enrollees receiving premium tax credits remains the same from 2016 to 2017, then the expected federal spending on premium tax credits for 2017 would be $42.6 billion. SOURCE: Center for Health and Economy – 12/14/2016
In little more than a month from now, Republicans will control the federal government from top to bottom. No matter what they choose to do with ObamaCare, whether they leave it alone, tweak it or kill it, they will own the outcome.
Scott can’t wait. “For the first time since I’ve been governor, Republicans control the White House, Congress, and the Health and Human Services agency,” he says, a smile on his face. “We’re finally going to have real free market health care.”
But what will Republican changes look like?
In 2009, Scott spent millions promoting his ideas for free market reforms when he launched Conservatives for Patients’ Rights. The group championed four “pillars” of free market health reform:
- Choice – Patients should be able to choose their own doctors
- Competition – Transparency in pricing for health treatments, and allowing insurers to compete across state lines will put downward pressure on health costs
- Accountability – Give consumers the same tax breaks for insurance that employers get. And hold health providers responsible by tracking and publishing health outcomes, so consumers can make informed health choices
- Personal Responsibility – Reward healthy choices by consumers.
Democrats know something along these lines is coming. And already, they are attacking some of the ideas. CNN ran a piece this week entitled “GOP health proposal tried in Georgia for years, but there were no takers.” The short version is that Georgia passed a law allowing health insurers with operations in both Georgia and another state to sell out of state insurance plans to Georgia citizens. To date, not a single health insurer has taken advantage of the law.
Naturally, Democrat political operatives point to the Georgia law as an abject failure of the free market concept, but Scott shrugs off the criticism: “It would be far more beneficial if all states allow it.”
Other conservative reformers agree, and point out that the Georgia law doesn’t even scratch the surface of the full-blown Republican proposal. Michael Cannon, director of health policy at the Cato Institute, explains:
“Insurers aren’t going to start offering new products with ObamaCare on the horizon, and that competitive federalism is impossible with ObamaCare on the books. But the Georgia law would probably be inadequate even if ObamaCare dies, because it was written to protect its domestic carriers. It doesn’t reduce barriers to entry for non-Georgia carriers; it therefore doesn’t force Georgia to compete with other states to provide optimal consumer protections; and it only applies to the individual market.”
Rick Scott and Donald Trump are close friends, and Scott has made it clear to Trump he wants to serve as a liaison on health care between the Trump Administration and state governors around the country. It’s clear that Scott’s vision, expertise, and passion for lowering health care costs will make him a key figure in the inevitable national debate on how we dismantle ObamaCare.