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Graham-Cassidy Is a Too-Mild Improvement on Obamacare

Michael D. Tanner

Yogi Berra was right: It’s déjà vu all over
again.

Health-care reform is back on the table. With time rapidly
running out — the reconciliation rule that would allow
legislation to pass with just 50 senators’ votes expires on
September 30 — Republicans may take up yet another proposal
to “repeal and replace” Obamacare.

The legislation, proposed by Senators Bill Cassidy (La.) and
Lindsey Graham (S.C.), is less ambitious than previous repeal
efforts, which might just enable it to piece together enough votes
to pass. Essentially, Graham-Cassidy would fold all current
Obamacare funding, both premium subsidies and Medicaid-expansion
funding, into a single block grant to each state. Keeping this
money flowing means that Graham-Cassidy must keep most Obamacare
taxes in place. Only the individual and employer mandates and the
medical-device tax are repealed. This has led Rand Paul to warn
that the bill simply “rearranges the furniture a bit, changes some
names, and otherwise masks what is really going on — a
redistribution of ObamaCare taxes and a new Republican entitlement
program, funded nearly as extravagantly as ObamaCare.”

Single-payer is
inevitable if the GOP can’t come up with a bold
alternative.

Particularly troubling is the way that the bill’s sponsors are
using a reallocation of funding to round up support from reluctant
Republicans. The bill would shift money from some high-cost states,
such as California, Massachusetts, and New York, to more rural
states (read: red states). The bill’s supporters are essentially
playing the time-honored Washington game of promising “free money”
to the states. That never fails to be popular with governors and
senators from those states that “win.”

On the positive side, supporters of the legislation correctly
point out that it would give the states far more flexibility with
the funds they receive, and would allow them to waive many of
Obamacare’s more onerous regulations, including the mandate to buy
coverage, mandated benefits, and pre-existing-condition coverage
requirements. Those are the regulations most responsible for
driving up premiums and destabilizing insurance markets.

Meanwhile, on the other side of the aisle, Bernie Sanders has
introduced his latest version of “Medicare for All.” Like the
Republicans, Bernie has also scaled back his proposal, which
originally called for a government-run, single-payer system. This
one would cost only $1.4 trillion per year. That would be more than
a third of our entire current federal budget.

Wary that the price tag will likely terrify many Americans,
Bernie doesn’t actually include any mechanism in the bill to pay
for all this new spending. Still, his office suggests some
possibilities, including: a 7.5 percent hike in payroll taxes
(bringing the total tax to nearly 23 percent), a 4 percent
income-tax increase on all Americans, and additional tax hikes on
corporations and “the rich.” While calling his proposal Medicare
for All, he would actually offer benefits far more generous than
those found in current Medicare, including dental and vision care.
In fact, the benefits would be more generous than almost any
national health-care system anywhere, including Canada. And it
would all be “free”: No deductibles, co-payments, or out-of-pocket
costs.

And when Bernie says single payer, he means it. His plan would
outlaw private insurance, either employer-sponsored or individual.
If you don’t like what the government gives you, tough!

The contrast here is not just between rival health-care plans.
Ever since 1945, when Harry Truman first proposed a national
government-run health-care system, progressives have known what
they want. From Medicare and Medicaid through the Children’s Health
Insurance Program and the Affordable Care Act, they have advanced
steadily, if incrementally, toward that goal. We are not talking
about a conspiracy theory, but an ideological worldview that
encompasses health care.

Bernie’s plan is the latest step in that long march toward
government health care. It is not going to pass anytime soon. But
that fact that it is co-sponsored by 17 senators and supported by
nearly every rumored Democratic candidate for the 2020 presidential
nomination shows the degree to which Democrats are united around a
common goal. We can disagree with what they seek, but at least we
know what it is.

And, Republicans? They want a bill that will pass.

Think about it. In the battle of ideas over health-care reform,
Republicans have unilaterally disarmed. When was the last time
Republicans explained what a free-market health-care system would
look like, how it would work, and why it would be better for
health-care consumers? The old adage is true: You can’t beat
something with nothing.

That’s why Republicans are once again trying to eke out a narrow
win on a bill that slows but doesn’t reverse the ongoing march to
socialized medicine.

Michael
Tanner
is a senior fellow at the Cato Institute and the author
of Going for Broke: Deficits, Debt, and the Entitlement
Crisis.