The Price of Price

Now everyone knows what happened. All the polling was wrong. Donald Trump won the election by skillfully riding a wave of economic and cultural backlash. Too many people felt left out of the recovering economy. The rich got their lost wealth back after the George Bush crash. Corporate profits soared. Wages didn’t. They finally edged up a little, too late and far too little. And gays were getting married, and the country was edging nearer to the day when whites would be just another minority – the largest minority, but a minority none the less. Spanish was being spoken in the streets, along with a whole lot of other odd languages, and the number of people who claimed no religion at all – they just didn’t care about such things – exploded. Jesus didn’t seem to matter anymore. People were also saying, as George Bush had said, that Islam was a religion of peace, that that terrorism stuff was an aberration, but it didn’t feel like that. And what was with that Black Lives Matter nonsense? The cops are the good guys. Everybody knows that.

Hillary Clinton had no answer to any of this. What was she going to do, extend and expand Obamacare? Sure, more people would have health insurance, but everyone else would somehow pay for it. Ordinary people would be supporting the poor, and minorities, obviously, and there were all the new rules. Some were fine – insurance companies couldn’t turn anyone down because of a preexisting condition – but insurance companies were required to provide contraceptive coverage. Some saw that as totally immoral – and there were those fines for not buying some sort of health insurance from someone. That went to the Supreme Court. The Supreme Court looked at the Commerce Clause and ruled those fines were perfectly fine. Many felt betrayed by what was supposed to be a reliably conservative Supreme Court – so Obamacare had to go. Donald Trump could make Obamacare go away – and he said he could fix all the other stuff. He didn’t say how he could fix all that other stuff, but that didn’t matter. He said he could. That was worth a shot. Ordinary folks would get their country back.

They should have asked how they’d get their country back. The core of Trump’s support was those left out of the economy, the largest bloc of which seemed to be straight white Christian male seniors. The ongoing severe shifts in the culture appalled them, as did Obamacare. That was a bridge too far. Medicare was fine – Medicare kept them from financial ruin, or death itself. Keep that. Social Security was fine too. Don’t mess with that. They lived on that. They paid for that. They were entitled to that. Just go back to the Reagan years, when the culture was stable, and familiar.

Donald Trump promised that, more or less. Ronald Reagan was quite thoroughly dead of course, but Trump might do – and that is getting history all wrong. There was that 1961 LP Reagan made, financed by the American Medical Association, of a speech he often gave, all about how Medicare, if passed, would be the end of America as we know it – “We are going to spend our sunset years telling our children and our children’s children, what it once was like in America when men were free.”

That was a great line. In 1980, Jimmy Carter called him out on that. Reagan bumbled about and finally said he never opposed Medicare, really – old folks should be cared for by this sort of program – but he had opposed it. The evidence was there, on vinyl. He hated the idea of social insurance, a government safety net for everyone who is foolish enough to get old without being smart enough to get rich. If that happened, well, that was their problem. What about personal responsibility? We all should be free to succeed, or fail, and the consequences of either are ours alone. That’s what freedom is all about, and Medicare was socialized medicine. If it passed, as it did four years later, our precious freedom would be gone forever.

Medicare actually was socialized medicine in a way, it passed, and our precious freedom wasn’t gone forever. But now it seems to be 1961 again, as Jonathan Chait explains:

During the campaign, coverage of the issues was blotted out by coverage of Hillary Clinton’s emails and Donald Trump’s broad suite of sociopathic tendencies. And of the issues that did receive any attention, a conspicuously missing one was Paul Ryan’s plan to push Medicare beneficiaries into private health insurance. Reporters just assumed that, since Trump never talked about it, it won’t happen. But Paul Ryan still wants it to happen. And in a Fox News interview with Bret Baier, Ryan said Medicare privatization is on.

“Your solution has always been to put things together, including entitlement reform,” says Baier, using Republican code for privatizing Medicare. Ryan replies, “If you’re going to repeal and replace Obamacare, you have to address those issues as well. … Medicare has got some serious issues because of Obamacare. So those things are part of our plan to replace Obamacare.”

Ryan tells Baier, “Because of Obamacare, Medicare is going broke.”

That last bit may not be true, but if Donald Trump won’t be Ronald Reagan, circa 1961, Paul Ryan will be. Ryan made no secret that he loathed Donald Trump, but he supported him anyway. If Trump won, as Speaker of the House, and with a Republican Senate, he could make Reagan’s dream come true. Trump never talked about any of this – he said things would be just fine in his usual vague way – but this would happen. Trump just had to get out of the way – and since Trump is not a policy wonk or even much of conservative, he would get out of the way. He’d hand the whole thing off to one of Ryan’s buddies and move on to other things. What did Trump care?

That seems to be what just happened, and the Los Angeles Times covers the unexpected war that just started:

President-elect Donald Trump reassured voters during his insurgent political campaign that he would protect Medicare, Social Security and other popular federal assistance programs.

But in tapping Rep. Tom Price (R-Ga.) to be his Health and Human Services secretary, he has elevated one of the most aggressive proponents of dramatically overhauling the government safety net for seniors and low-income Americans, a long-held conservative goal.

Trump also took a step toward a potentially explosive political battle over the entitlements, which account for close to half of all federal spending.

Such a battle – and the threat of benefit cuts to more than 100 million Americans – risks alienating some of the very working-class voters who fueled Trump’s unexpected victory.

He threw Paul Ryan a bone – Tom Price – but Price comes at a price:

His advisors and prospective Cabinet already include several figures whose wealth and political connections are at odds with Trump’s populist rhetoric.

“The pressure here will ramp up significantly,” warned John Lawrence, former chief of staff to House Minority Leader Nancy Pelosi (D-San Francisco), who has led numerous fights against GOP efforts in recent years to overhaul entitlement programs.

Even the smallest cuts in federal support can spark a backlash, Lawrence added, given people’s attachment to Medicare and other programs. “It can be $20, and they’ve got serious trouble on their hands,” he said.

Trump may not have thought this through. This isn’t a set-it-and-forget-it infomercial thing. This is life and death to millions of Americans, but he’s new to public policy. Forgive him, or don’t:

Congressional Republicans voiced strong support Tuesday for Price, whom Senate Majority Leader Mitch McConnell (R-Ky.) called “the right person to lead the charge” to repeal Obamacare.

But Democrats moved quickly to highlight Price’s calls for more far-reaching entitlement changes.

“Washington Republicans are plotting a war on seniors next year,” said Sen. Charles E. Schumer (D-N.Y.), the incoming Senate minority leader.

Several Senate Democrats, including red-state lawmakers such as Indiana Sen. Joe Donnelly, announced they would vote against confirming Price. “Tom Price has led the charge to privatize Medicare, and for this reason, I cannot support his nomination,” Donnelly said.

That was news to Donald Trump:

Trump, in announcing his selection of Price, called the 62-year-old six-term congressman “exceptionally qualified to shepherd our commitment to repeal and replace Obamacare and bring affordable and accessible healthcare to every American.”

The president-elect did not mention Price’s calls for major changes to Medicare and Medicaid, which Price has made a centerpiece of his legislative agenda.

Oops. Someone didn’t do their homework:

Price, like House Speaker Paul D. Ryan (R-Wis.), advocates replacing the government-provided Medicare health plan with a program that provides seniors with a voucher to purchase private health coverage.

This system, which supporters call premium support, saves the federal government money by gradually shifting costs onto beneficiaries, independent budget analyses have shown.

Price also advocates a new system of block grants to states that would sharply cut federal aid for Medicaid, which primarily serves poor Americans.

That spells trouble:

“Medicare is not seen as the same type of issue as the ACA,” Harvard University political scientist Robert Blendon, an authority on public opinions of healthcare, explained at a recent forum by the Alliance for Health Reform. “Most voters of both parties think Medicare is working.”

Even Medicaid, which began as a welfare program, and the related Children’s Health Insurance Program have established strong bipartisan support, reflecting in part the large role they play in providing coverage to children and elderly Americans in need of nursing home care.

Nearly two-thirds of Americans said that Medicaid is a “very important” government program in a 2015 national survey by the nonprofit Kaiser Family Foundation. That was only slightly below Medicare, which was rated similarly by 77% of Americans, and Social Security, which 83% of respondents said was very important.

Yeah, well, Trump kind of knew that:

Though he did not discuss healthcare and entitlement policies frequently, Trump insisted several times that he would protect programs serving vulnerable Americans.

“I’m not going to cut Social Security like every other Republican, and I’m not going to cut Medicare or Medicaid,” Trump said last year in an interview with the Daily Signal, an online news site operated by the conservative Heritage Foundation.

“Every other Republican is going to cut, and even if they wouldn’t, they don’t know what to do because they don’t know where the money is. I do,” Trump said.

Actually they do know. He’s the one who doesn’t know where the money is.

He was just talking, as he does, but Michael Hiltzik has the details:

There’s no secret about what specifically Ryan has in mind. He intends to replace traditional Medicare, an efficient program offering guaranteed treatment and featuring rock-bottom administrative costs, with a privatized program. Seniors would get a federal voucher to help them pay premiums charged by commercial insurance plans. Ryan calls this system “premium support.”

But since the value of the vouchers would rise at less than the rate of healthcare inflation, and the costs of private insurance typically rise faster than those of Medicare, an ever-larger share of healthcare costs would land on seniors’ shoulders.

The government keeps the money, or saves a whole lot of money, and seniors will have to make up the difference, if they can, but there’s more to it than that:

Ryan’s plan would do nothing to rein in healthcare costs, but would likely increase them, in part because Medicare beneficiaries would be saddled with paying not only for their care, but for the shareholder dividends and executive pay of private insurance companies. The savings Ryan touts would be illusory: They would merely be shifted from government to seniors.

His plan threatens to increase seniors’ costs in another way: by severing the link between the reimbursements paid to doctors and hospitals by traditional Medicare rates and those paid by Medicare Advantage plans, which are semi-privatized plans that offer enrollees more services but narrower provider networks.

Medicare Advantage is growing in popularity, with an estimated 31% of all Medicare beneficiaries enrolled. But those private insurance plans’ reimbursement rates are benchmarked to traditional Medicare rates, which are set by the government. Ryan has proposed removing the benchmark and allowing Advantage reimbursements to be set by competition. As healthcare commentator Andrew Sprung observes, “That would likely lift the lid on the payments insurers make to healthcare providers – and then, as costs rise, shift an ever-rising share of them to seniors.”

And then there’s that other matter:

Medicare faces fiscal problems, but it’s not going broke, and according to both the Medicare trustees and the Congressional Budget Office, the Affordable Care Act has in fact alleviated those problems rather than caused them. The trustees reported in 2010 that passage of Obamacare had postponed the projected exhaustion date of the Medicare trust fund by 12 years – to 2029 from 2017. Projections of Medicare spending growth have consistently come down, year after year, at least in part due to changes in the program imposed through Obamacare.

The program’s fiscal situation would be “substantially improved,” the trustees said, because the ACA instituted new cost controls and provided new tax revenues for the program. Both those features would disappear if the GOP repeals the ACA, as is its intention.

Ryan and Tom Price explain the issue backwards. Obamacare didn’t kill Medicare. Obamacare keeps Medicare solvent. Get rid of Obamacare and Medicare fails. They’re linked now. Ryan and Price know this. Get rid of one and the other has to go – their plan all along. No one told Donald Trump. Maybe they did but he wasn’t listening, or he found the details boring. He may have been tweeting at the time, but they made him a liar. Perhaps he doesn’t care.

Others may care, and Greg Sargent offers this overview:

So what does this mean for poor and working-class white Trump voters who are currently benefiting from the law, some no doubt enjoying health coverage for the first time in their lives?

Price has at least given a lot of thought to how to replace the ACA. But Price’s own replacement proposal would roll back the Medicaid expansion, a substantial portion of financial assistance for others getting coverage, and a fair amount of regulation of the individual market. And so, the likely end result (again, at best) is that a lot of the 20 million people who would lose coverage due to repeal will remain without coverage, and protections for those with bad medical conditions will be eroded.

Perhaps Trump voters didn’t know what they were voting for:

The core philosophical difference here is that conservatives want far less in government spending and regulations designed to cover poor and sick people, protect consumers and enforce a minimum standard for coverage. As a result, they are willing to tolerate far lower standards in those areas, though some also want conservative reforms to strive to make very cheap bare-bones catastrophic coverage widely available. Liberals think we should spend and regulate to the degree necessary to move toward universal care and see expanded and improved coverage as part of a broader effort to progress toward a higher societally guaranteed minimum standard of living. Conservatives won the election, and apparently, we are now going to do it their way. Elections have consequences.

Indeed, all this should immediately cast doubt on the notion that Trump will clash with congressional Republicans over the future of the safety net. During the primaries, Trump famously said he would not allow people to “die on the street,” which, along with his vows not to touch entitlements, led many to see him as an unorthodox Republican when it comes to the proper scope of government protections for the poor and unhealthy. But now Trump appears prepared to go along with the most conservative congressional Republicans on these matters.

That may be because he’s a complete novice at public policy. The most conservative congressional Republicans are not novices at all. As with his neckties and whatnot, here he simply outsourced the manufacturing to those who seem to be the best craftsmen and moved on – he doesn’t need his own necktie factory – but this is not a matter of menswear:

Did people benefiting from Obamacare who voted for Trump really expect repeal to happen? I think we need more reporting on this question. Yes, Trump did repeatedly say he would repeal Obamacare. But he also said he would replace it with “something terrific.” And he explicitly went out of his way to create the impression that he does not agree ideologically with Republicans who are hostile to government efforts to supply health care to those who can’t afford it.

Now, it’s always possible that many voters backed Trump in the full knowledge that their Obamacare might be repealed, for other reasons – because, for instance, he’ll supposedly bring manufacturing and coal jobs roaring back. Before long, those voters will learn whether their bet was a well-placed one. It’s also possible that Trump will surprise us all and insist on some kind of replacement that somehow preserves much of Obamacare’s coverage expansion. And a kick-the-can-down-the-road scenario which keeps deferring the harshest fallout from repeal is also a possibility.

But that’s unlikely:

It now looks more likely that we’ll see a substantial rollback of the progress toward universal health coverage we’ve seen in the past few years. News organizations love to venture into Trump’s America to hear voters explain that Trump spoke far more directly to their economic struggles than Democrats did. Maybe now we’ll get more coverage of those inhabitants of Trump’s America who are set to lose their health care, too.

That should be interesting. This is free-market economics. Some of those Trump voters might be jumping for joy at losing their new health insurance. Others might be jumping for joy at losing their Medicare. Big government was always the problem. Let’s go back to the Reagan years.

They could say that, but they may not be able to keep that up for four years. This is just the beginning. They’ll pay the price for that.