Opt Out Federalism
If the Affordable Care Act isn't as stable as it could be, every state will want the power to modify the plan so it'll work better for them. Some will take advantage of that power by adding an individual mandate. Some will try out various conservative theories of how best to structure the bill. Some, like Vermont, will try to push towards single payer. And those that do nothing will act as a control group to a grand health-care policy experiment -- though not, I think, to the benefit of their residents. [. . .] the practical effect will be of making the legislation very similar to the federalist ideas I mentioned earlier in the week.
There is political merit in this approach. Consider this from The Hill:
Senate Republican leaders will push a proposal sponsored by Sens. Lindsey Graham (R-S.C.) and John Barrasso (R-Wyo.) to allow states to opt out of federal requirements to add millions of beneficiaries to Medicaid rolls.
Experts project the law could add 15 million to 23 million people to Medicaid, putting substantial pressure on state budgets. “Medicaid is a real weak link” to this law, said Graham. “You’re going to have Democrat and Republican governors complaining about Medicaid expansion under the bill and how it will affect their states.
“The next debate is whether states should have a say about waivers for states,” Graham said.
This is a pretty ridiculous idea. If in fact the concern is the cost of Medicaid expansion, states can opt out of that already. Apparently the real issues are elsewhere. Via Joan McCarter, Sam Stein explains:
What sets Graham and Barrasso apart is that under their approach, states wouldn't have to institute their own sets of reforms before leaving the federal system. With the current law or the Wyden-Brown alternative, the Health and Human Services secretary could grant a waiver....
[W]hile Graham might argue that the pure opt-out clause is the equivalent of repealing and replacing Obama's bill, the likely end result of his legislation would that a good chunk of the country simply fails to push any additional reform.
"It looks like what they are introducing is a straight-up opt-out which would allow states to gut the law without implementing anything in its place," a top Democratic Senate aide said.
It seems unimaginable that the Obama Administration would agree to this. But perhaps they would agree to the Wyden-Brown plan:
Sens. Ron Wyden (D-Ore.) and Scott Brown (R-Mass.) introduced the “Empowering States to Innovate Act.” The legislation would allow states to develop their own health-care reform proposals that would preempt the federal government’s effort. If a state can think of a plan that covers as many people, with as comprehensive insurance, at as low a cost, without adding to the deficit, the state can get the money the federal government would’ve given it for health-care reform but be freed from the individual mandate, the exchanges, the insurance requirements, the subsidy scheme and pretty much everything else in the bill.
I think how Medicaid fits into this would have to be rethought. Federalizing Medicaid would be a good way to address the concerns of states about costs and "clear the brush," so to speak regarding the "reform" aspects of the Affordable Care Act (mandate, exchanges, regulations, etc.)
Seniors and the less well off could have single payer federal public insurance options and then the states, while meeting the objectives of the Affordable Care Act, could go their own way.
This seems to me to be the type of solution that the Obama Administration would find very appealing and which Republicans could claim as a victory over "ObamaCare."
This approach shows political promise in my view.
Speaking for me only
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