OPINION:
On November 18, 2021, the Congressional Budget Office (CBO) released its long-anticipated score of President Joe Biden’s Build Back Better (BBB) legislation. With policies ranging from tax credits for electric bikes to establishing a new Civilian Climate Corps, it includes everything and the kitchen sink. The only thing missing from the score is the cost of the sharpening stone for all the axes it grinds.
Take health care, for example.
Of the total $1.7 trillion in new spending, nearly $360 billion (21% of the total) is spent on health insurance benefits for Medicare, Medicaid and Obamacare. Remarkably, while Medicare spending makes up just $53 billion or 15% of that total, the BBB cuts over $283 billion from Medicare — a whopping 79% of the total spending on all three programs.
Why do Mr. Biden, Speaker Pelosi and Senate Majority Leader Schumer want Medicare to pay for their Medicaid and Obamacare priorities? Because they have a few political axes to grind.
BBB spends $204 billion on Medicaid. The largest item on the list is $150 billion for Home and Community Based Services (HCBS). This is a bit of ax-grinding directed at nursing homes. Democrats have consistently shamed nursing homes and blamed them for the COVID-19 pandemic. Instead of doing the hard work of digging in and working with nursing homes, the Democrats’ solution is to throw money at the competition.
At the same time, there are $35 billion in cuts to hospitals in non-Medicare expansion states. This ax-grinding is directed at Republican state legislatures. A little more than nine years ago, the Supreme Court ruled that the Obamacare Medicaid expansion was optional. Twelve states in our great country have exercised their right to decline that option.
These cuts to hospitals will threaten access and harm patients, the exact opposite of the goals of Medicaid expansion.
The legislation proposes to spend $102 billion on Obamacare private exchanges. The most expensive item is $44 billion for monthly premium reductions. Numerous economists have concluded that 65% of new exchange enrollees would have income above 400% of the federal poverty level (or more than $105,000 for a family of four).
This ax-grinding is directed at congressional Republicans. Obamacare was initially passed under partisan reconciliation, and the Democrats are pursuing the same course concerning its expansion. Inexplicably, other programs, like Medicare, only offer premium reductions at 133% of the Federal Poverty Level.
Big Pharma doesn’t escape. The legislation cuts $283 Billion out of Medicare prescription drug coverage. Maybe that is payback for the $23 million that PhRMA (pharmaceutical association) has already invested in lobbying this year.
Here’s the critical part: CBO estimates the drug cuts will lead to 8 fewer drugs in the U.S. over this decade and 30 fewer over the next decade. Fewer new and innovative drugs mean more suffering patients and more preventable deaths. Some Democrats seem willing to incur those preventable deaths if it means they can settle political scores with drug companies.
The Democrats’ biggest ax to grind maybe with Medicare beneficiaries and is probably purely partisan. Democrats are cutting Medicare and refuse to reinvest all the savings back into the program. Perhaps not coincidentally, the Pew Research Center found a higher percentage of individuals 65 years and older lean Republican.
Medicare is not on solid ground even without the extra burden of the BBB. Last week, the Biden administration announced a 15-year historic high increase in Medicare Part B premiums of nearly $22 per month for seniors on fixed incomes. Earlier this summer, the Medicare Trustees reported the Hospital Insurance Trust would be bankrupt by 2026. BBB’s frivolous $7 billion handout to teaching hospitals – the second such gift within the past two years — doesn’t help with the insolvency date
Democrats are not the only political party to use the full force of legislation to grind axes; Republicans do it too. But why do Medicare beneficiaries have to pay for it?
If Congress wants to invest in new Medicaid priorities, they should use Medicaid money. If they’re going to invest in new Obamacare priorities, they should use Obamacare money. Don’t make Medicare pay for Medicaid and Obamacare.
More importantly, don’t use something as important as the health care of the poor, the elderly, and those on fixed incomes to grind your own personal and political axes.
• Lisa Grabert is a research professor at Marquette University and a former Congressional aide to the House Ways & Means Committee, where she had primary authorship over Medicare legislation. Joe Grogan is senior fellow with the University of Southern California’s Schaeffer Center and the former director of the Domestic Policy Council, and an assistant to President Donald J. Trump.
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