Memo to Medicare-Focused Democrats: Please Don’t Forget About Medicaid

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Chuck Schumer has sounded the alarm over GOP plans to privatize Medicare. But Medicaid is more at risk, and more immediately.Photo: Mark Wilson/Getty Images

Congressional Democrats are gearing up for a big campaign to head off or exploit Republican plans to significantly change the Medicare program. The nomination of Representative Tom Price, the House Budget Committee chair, to serve as HHS Secretary has served as a convenient news hook for these Democratic plans, always kept close at hand ever since Paul Ryan made radical changes in Medicare a key feature of his various budget proposals. Price has long supported Ryan’s schemes to turn Medicare benefits into vouchers used to buy private health insurance, and more to the point, has urged Republicans to tackle Medicare “reform” in 2017.

We still don’t know whether the Trump administration and congressional Republicans will actually risk other elements of their common agenda to go after Medicare. But Democrats aren’t taking any chances. Senate Democratic Leader Chuck Schumer is already accusing the newly ascendant GOP of incipient granny-starving: “Between this nomination of an avowed Medicare opponent and Republicans here in Washington threatening to privatize Medicare, it’s clear that Washington Republicans are plotting a war on seniors next year. Every senior, every American should hear this loudly and clearly Democrats will not let them win that fight.”

Schumer and others are comparing this moment to a similar juncture in 2004 when a newly reelected George W. Bush announced he would expend some political capital in seeking a partial privatization of Social Security. It was a big mistake, and aside from failing almost immediately in Congress as a significant number of Republicans headed for the hills, it marked the beginning of a long decline in Bush’s political fortunes punctuated by a Democratic midterm landslide in 2006.

Democrats are hoping for a similar cycle of Republican overreach and voter backlash today — or at least a tactical victory in public opinion forcing Trump (who once promised to protect Medicare benefits), Price, and Ryan to leave Medicare alone.

But there is some risk that by concentrating all their fire on Medicare, Democrats are potentially shirking other health-care safety-net programs, notably Medicaid, the low-income health-care entitlement that has been the object of conservative contempt for decades. Medicaid, after all, is inextricably connected to the Affordable Care Act (and in fact has accounted for a majority of the coverage gains attributable to ACA, despite the Supreme Court decision making Medicaid expansion optional), and if we know one thing for sure about Republican plans, it is that Obamacare repeal (if not replacement) will happen as quickly as possible using budget reconciliation rules that prevent filibusters.

GOP plans for Medicaid are as unclear as those for Medicare. Every Ryan budget has included the conversion of the program into a block grant (or a very similar fixed per capita allotment) whereby the federal contribution would be capped (if not reduced) in exchange for states having more (and perhaps total) flexibility over how to use the money — i.e., they would not have to continue the same benefits for the same population. Trump endorsed the Medicaid block-grant idea during his campaign as well. While there is no question that moving Medicaid over to block grants is intended to massively reduce federal support for low-income health care over time, there are some big questions about how it might play out. The largest is probably what to do about the 31 states that did indeed expand Medicaid under Obamacare. The budget reconciliation bill enacted by Congress last year (and vetoed by Obama) simply canceled the expansion, which would put states in the position of either abandoning new enrollees or footing the bill for their benefits. The House Republicans’ more recent “Better Way” agenda doesn’t cancel the expansion, but does eliminate the elevated federal match rate designed to encourage states to accept it. So it looks like some combination of state budgets and new Medicaid enrollees would take a big hit.

While congressional Democrats aren’t talking much about this threat to Medicaid, it’s a big deal to governors and state legislators — and the 12 Republican governors in states that did accept the Medicaid expansion are probably the biggest obstacles to a slashing federal support. One of them happens to be Mike Pence.

Another interesting wrinkle is that the woman who designed Indiana’s expanded Medicaid program, a consultant named Seema Verma, has been named by the new administration to become director of the sub-agency at HHS that supervises both Medicare and Medicaid. Her recent specialty has been helping states negotiate conservative policy concessions (e.g., making beneficiaries responsible for co-pays or small premiums) from an Obama administration eager to give broad waivers from the usual Medicaid rules as part of an agreement to take the federally financed expansion. In other words, she’s good at finding ways to help states drive down utilization of Medicaid while maximizing the federal dollars they receive. When installed in Washington, will she represent the GOP’s anti-Medicaid hard-liners or the Republican governors and legislators who don’t want to dump millions of people off Medicaid or pay the bill to keep them enrolled? Nobody knows.

Perhaps Democrats think they can count on Republican governors or their congressional allies to save Medicaid from evisceration, leaving them to concentrate on Medicare. But more likely, Schumer and others are simply obsessed with the political benefits of identifying themselves as defenders of Medicare. And there’s a lot of cynical logic supporting that approach. The seniors who are most concerned about Medicare — and the middle-aged people most affected by a voucher scheme that “grandfathers” current and near-future beneficiaries — vote at much higher rates than young folks and poor folks. They are also a great electoral prize for Democrats, who have been bleeding support among older voters lately. It’s no accident that the last time Democrats had a good midterm election, in 2006, they actually won the senior vote.

There is another factor that makes the self-conscious progressives you would expect to care most about Medicaid beneficiaries instead focus on Medicare. For supporters of a single-payer health-care system, Medicare is the great model of what they want all Americans to enjoy as an entitlement. Meanwhile, Medicaid is the classic “poor people’s program” they would just as soon abandon in favor of universal single payer. In the meantime, many left-bent pols supposedly transfixed by income inequality and its victims may not expend much effort on protecting Medicaid.

But precisely because they are less politically powerful, Medicaid beneficiaries are far more vulnerable to the new Republican regime than the older and wealthier (and for that matter, whiter) population of those on or anticipating Medicare. They are also more likely to feel the hammer come down earlier, either through administrative decisions by the Trump administration or an early budget reconciliation bill that includes an Obamacare “repeal.” It would be nice to hear more about them, particularly from their ostensible champions in the Democratic Party.