State block grants: The GOP’s worst health care idea of them all

Even as the U.S. Census reported that the percentage of Americans lacking health insurance dropped to a new record low of 8.8 percent, the past week was nevertheless a big one for health care reform proposals in Washington. Sen. Bernie Sanders, backed by 15 of his Democratic colleagues, unveiled his “Medicare for All” bill providing one path to universal health care in the United States. But while Democrats were looking to enable insurance coverage for the 28 million people still lacking it, Republican Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana pitched their last-gasp Obamacare “replacement” plan to deny coverage to millions more.

After the much-deserved defeats of the GOP’s American Health Care Act (AHCA) and Better Care Reconciliation Act (BCRA), Graham and Cassidy are asking their Republican colleagues to try one more time before the Sept. 30 legislative deadline puts an end to their Obamacare repeal dreams. At the heart of the Graham-Cassidy proposal co-sponsored by Nevada Sen. Dean Heller and Wisconsin’s Ron Johnson is an old idea near and dear to Republican hearts: block grants for the states. That is, the new GOP bill would basically convert today’s federal spending on Affordable Care Act insurance subsidies and Medicaid expansion into smaller block grants turned over to the states to administer largely as they see fit. But as the history shows, that is a proven recipe for failure. After all, if “states’ rights” is simply short-hand for the denial of Americans’ rights, what Lindsey Graham touts as “state flexibility” is just a green light to withhold health care coverage to millions of their residents.

Sen. Graham has made no secret of his objectives. “If you believe in universal health care,” Graham boasted on Wednesday, “this is your worst nightmare.” He explained why to Breitbart News two weeks ago:

Here’s the construct. We are going to repeal the individual mandate, and the employer mandate. That generates about $200 billion in savings. The states can reemploy the individual mandate and the employer mandate if they would like but you cannot drag everyone else down with you. You can go to single-payer health care in a state if you wanted to, I think you would be foolish, but you cannot drag 49 other states with you.

So, what we did this will repeal the individual and employer mandate, and medical device tax. We left the other taxes in place and created a block grant. Under Obamacare, four states got 40 percent of the money. That’s New York, California, Maryland, and Massachusetts. They’re 20 percent of the population and so by 2026 our goal is to have parity. It will be roughly the same no matter whether you live in South Carolina or California. We help states that did not expand their Medicaid under Obamacare catch up. High-cost expansion states will have a glide path down to a number that will be parity by 2026.

Of course, had Republican-led states simply accepted Medicaid expansion, they would be at more than parity now in terms of health care funding.