New Republic: Obama’s Redirect — to the States?

Forget About Boehner. Try Republican Governors

  • Harold Pollack
  • October 29, 2010 | 12:00 am

This is the fifth in an occasional series examining how Republican control of Congress might affect policy debates in the next two years. (Part 1, Part 2, Part 3, Part 4)

Supporters of health reform are asking how President Obama might find common ground with House Republicans should Tuesday’s elections go badly. Count me as a pessimist on this front. House Republicans have perceived little reason to compromise on health reform or much else. For many, ideological principles and political incentives converge on one destination: Implacable opposition to the centerpiece initiative of the Obama presidency. Midterm victories would not soften conservatives’ policy views or this basic strategic judgment.

Republicans won’t have the votes to repeal the new law. They also face three awkward realities. First, the Affordable Care Act’s most unpopular provisions fill budget holes Republicans couldn’t easily fill. Second, specific aspects of ACA–such as those which forbid insurers from discriminating against sick people–are genuinely popular. Third, outright repeal would focus public attention on Republicans’ own proposals, something the Republicans would wisely avoid.

If they cannot repeal ACA, Republicans can greatly damage it. They can hold interminable hearings to rattle the Obama administration, publicize bureaucratic goofs, and perhaps uncover a workable scandal. They can underfund and otherwise undermine ACA’s implementation–and then blame the Obama administration for the resulting snafus.

The farcical “1099 collation calamity” exemplifies the latter strategy. To make a long story short, ACA raised roughly $18 billion by imposing rather cumbersome paperwork requirements to reduce tax evasion by small businesses. Small businesses didn’t like it. Democrats mustered 56 Senate votes for a reasonable fix, but Republicans blocked the vote. Having prevented Democrats from addressing the problem, Republicans have been happily running on this ever since.

House members have no day-to-day responsibility for the instruments of government. They face little political penalty if they damage these instruments, or if they undermine the quality of programs they disdain. Indeed the political incentives often run the other way.

Fortunately, President Obama has one way out. He can reach out to Republican governors who actually have some stake in ACA’s success. Establishing workable partnerships with these officials provides the best hope for productive negotiation with Republicans in Washington. It also happens to be the best pathway to sound policy, in implementing one of the most complex pieces of legislation ever enacted.

Governors are promising partners because they bear actual responsibility for millions of uninsured patients. They must respond to TV news accounts of uninsured cancer patients denied care. They must balance their budgets in the face of recession and rising costs health care. Elected by entire states rather than by narrow gerrymandered districts, they have some reason to present themselves as pragmatic dealmakers who get things done.

Governors need federal help and money to establish working health insurance exchanges on a tight timetable. ACA also expands funding for community health centers. These are essential to address the crush of uninsured people, particularly immigrants. These also provide thousands of jobs. If the House defunds ACA implementation, the first political victim will be the Obama administration. The second will be governors, Democrat and Republican, who will be held accountable for the resulting mess.

Governors also have a stake in ACA’s fine print. Pre-Existing Condition Insurance Plans (PCIPs) are now operational. For the next three years, these arrangements will provide $5 billion to cover the medically uninsured. Republicans sharply criticize PCIP. Senator Enzi and thirty Republican colleagues sent HHS Secretary Kathleen Sebelius a sharply-worded letter, citing expert estimates that PCIP is underfunded. The letter asks pointed questions about what will happen if PCIP is oversubscribed or run out of funds.

These criticisms are disingenuous, since Republicans propose their own similar arrangements which are more seriously under-funded. Still, PCIP obviously requires additional resources. The proper ask from a Republican governor could be very helpful in securing greater resources.

Over the long run, governors have good reasons to support federal policies to reduce states’ heavy fiscal burdens. Republicans complain about “unfunded mandates” embodied in health reform. This is also rather disingenuous. ACA provides states with substantial resources for Medicaid expansion and other challenges. ACA also subsidizes coverage for millions of low- and moderate-income people in red and purple states where the need is most acute. Ironically, in legislative negotiations for both the stimulus and ACA, Senate deficit hawks curbed liberal measures which would have lessened financial burdens on state governments.

Be that as it may, states will require federal financial help for years to come. Liberals have a special stake in providing this help, because state budget crises are killing progressive government. A permanent increase in the federal government’s Medicaid match rate is especially essential. States cannot reliably support continued increases in required Medicaid spending. Scrambling to make budgets work, they under-pay providers. They fail to operate Medicaid with the care, professionalism, or humanity that recipients deserve. There is no way to resolve this without large infusions of federal resources.

Will Republican governors play ball? Who knows. Above the fold, many bitterly oppose the new law. Below the fold, word from the field is that many are reasonably cooperative with federal officials as both sides confront the mammoth implementation challenges of health reform. Many states are publicly or privately seeking more federal resources.

States and the federal government are locked in an uneasy partnership. This arrangement has many downsides. At least it produces Republican partners with a stake in effective government. In this Tea Party era, that’s no small thing.

Harold Pollack is the Helen Ross Professor of Social Service Administration at the University of Chicago.

Kevin S. Wrege, Esq.

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One Response to New Republic: Obama’s Redirect — to the States?

  1. Rodney says:

    Great Post.
    These PCIP programs are to be in place until 2014, which is when affordable health insurance companies will be required to accept all applicants regardless of their health condition and pre-existing problems.

    Can we all just get along until then?

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