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Another Reformicon Faceplant on TrumpCare


Ramesh Ponnuru is the latest conservative intellectual to apologize for the BCRA. The results are unpersuasive in the extreme:

Republican efforts to pass health-care legislation are in jeopardy again, in part because of controversy over its potential impact on Medicaid. But the Republican reforms are more moderate, and more worthwhile, than they are getting credit for.

If cutting Medicaid by 35% and substantially reducing subsidies and regulations for private insurance, resulting in more than 20 million people without insurance and insurance for most people who maintain it being made worse is “moderate,” I’d hate to see the “extreme” version. And given that the only actual benefits in the bill go to very wealthy people getting a tax cut they will barely notice, the “worthwhile” is also going to be a tough lift.

Here’s the core of the argument, which is worth unpacking:

Medicaid is a program that is rife with inefficiency. A 2015 study found that recipients derived only 20 to 40 cents of benefit for every dollar governments spend on it. Researchers have struggled to find any positive effects Medicaid has on beneficiaries’ physical health.

This description of Medicaid is bad faith almost to the point of dissembling. The first claim leaves the impression that Medicaid is wasteful and inefficient compared to private insurance. But the linked study says no such thing. Rather, it concludes that Medicaid recipients get only 20%-40% of Medicaid benefits because the poor uninsured get a substantial amount of their medical expenses covered by “implicit insurance”: i.e. emergency treatment that is eaten by hospitals and/or taxpayers. The study counts this “implicit” insurance as an existing benefit and hence concludes that less than half of the spending benefits Medicaid recipients because more than half benefits the “implicit insurers.” But there’s nothing “inefficient” about replacing “implicit” insurance with actual insurance — quite the opposite. Actual insurance is a better deal for the poor, hospitals and taxpayers alike. Ponnuru also cites no evidence supporting his implicit claim that the private insurance he prefers is more efficient than public insurance, for this obvious reason that this is utter nonsense.  And the comparison with “implicit insurance” would still hold for private insurance — it’s neither here nor there.

The second claim is phrased cagily enough to not be outright false. But it’s intended to leave the impression that the bulk of the evidence is that having Medicaid is no better in terms of health outcomes than not having insurance at all. But the evidence in fact indicates that the highly implausible claim that Medicaid is no better than being uninsured is false. And, again, it’s pretty infuriating to see affluent conservatives glibly advocating these “are people really better off with health insurance?” experiments being carried out on much less privileged people.

Most of the rest of the column argues (not very convincingly) that the CBO estimates exaggerate the number of people who will be uninsured by BCRA. OK, let’s say arguendo that only 18 million people will lose insurance, leading to still-substantial preventable death, suffering, and financial ruin in order to give a huge tax cut for the rich. What’s the affirmative case for this? There isn’t one. Here’s the punchline:

My own conclusions should probably by now be pretty clear: The CBO is exaggerating the effects of the Republican legislation on Medicaid enrollment, it’s worth putting Medicaid on a firmer footing, and any additional resources for health insurance for low earners should be directed toward enabling them to buy private coverage rather than pumped into Medicaid. On Medicaid, in short, the Republicans are on the right track.

Medicaid will, in the Orwellian phrase, be “put on firmer footing” by massively cutting Medicaid spending and insuring fewer people. Most of these people will lose insurance entirely, and we’re quibbling only over the exact number. To replace Medicaid, Ponnuru gestures in the direction of providing more subsidies to buy inefficient, high-premium insurance, but slightly higher subsidies aren’t going to do much to help poor people who have the choice between insurance with $6,000 in annual deductibles and nothing.

It’s also worth nothing what Ponnuru doesn’t — the the Republican attack on the ACA has been breathtakingly dishonest. Trump promised to protect Medicaid, and not only Trump but Republicans in general have attacked the ACA as having premiums and  deductibles that are too high. Only the BCRA would make these problems much worse. Ponnuru tries to square the circle by arguing that Medicaid cuts don’t really count because the insurance has no added value — but the argument is false. The American public strongly prefers the ACA to BCRA, for obvious reasons that the latter offers massive cuts in exchange for nothing to people who don’t have a large amount of annual investment income. These “reformicon” defenses of BRCA are pathetic — just slightly more sophisticated-sounding versions of what the Wall Street Journal is saying.

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