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Lanhee Chen On The Senate Healthcare Bill

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Lanhee Chen and Avik Roy are the center-right’s biggest brains on health care.  Both are in favor of the Senate bill as it exists but both see additional compromises coming and will support what the political institution of the Senate passes.  But as my Washington Post column stresses this morning, the Senate GOP must pass a bill and do so this week.  Here is my conversation with Lanhee:




HH: One of the most important weeks in American modern political history has begun. The Supreme Court will hand down a decision in Trinity Lutheran which will decide the future of religious freedom in America, Justice Kennedy may step down, and the Senate Republicans are considering a bill which in my opinion they must absolutely pass after it has been molded and shaped through a week of negotiations. Joining me to discuss this latter is Lanhee Chen, who is of course the fellow, the David and Diane Steffy fellow at the Hoover Institution. Follow him @LanheeChen. He along with Avik Roy are the two big guns of the health care debate that are speaking to this. Lanhee, good morning, thank you for being up early to talk to me, you’re out in California. What is your assessment of where the Senate bill stands today?

LC: Well Hugh, good morning, I’m actually in New York City, and congratulations on a great debut on Saturday. That was fantastic.

HH: Oh, thank you. Mike Pompeo knows what he’s doing.

LC: Well, you do, too. And it was great. So on this bill coming up this week, you know, I think that we’ve been through a lot of different cycles on this now. And we had the House bill, obviously that the House bill, you know, had some challenges. But I still thought that was the right thing to do. The Senate bill’s actually an improvement on it in a lot of ways. And I really hope that people will take a good, hard look at some of the provisions in there that I do think ultimately are going to help bring down premiums particularly for the middle class. I do think that it’s going to still provide a good measure of assistance for people on Medicaid. Clearly, it tries to put some fiscal constraint around that program which is growing rapidly, in fact, growing faster than our economy. And actually, I think this bill will be an improvement. Not perfect, again, but I do think it’s a step forward, and I hope it moves forward in the Senate this week.

HH: Now my friend, Jon Allen, has tweeted out, do Senate Republicans have what it takes to dismantle the safety net for the poor and disabled? I replied, it isn’t dismantling, Jon, but a devolution to states where it will actually work for the poor. And I point out, I served 18 years on a local board that delivered health care to the poorest. And Medicaid doesn’t work. It just doesn’t work, Lanhee. Why doesn’t the left understand papered isn’t health care?

LC: Well, you’re exactly right. There’s a couple problems happening with Medicaid. The first problem is in many states, the coverage isn’t particularly useful, because no doctors will accept it. To your point about, you know, the fact that just because you have insurance coverage doesn’t mean you’re actually getting care. California’s a perfect example of this. If you’re paying doctors 25 cents on the dollar to see Medicaid patients, they’re going to say forget it, I’m not going to do that. And you’re seeing that in many more places around the country. In fact, if you look at the academic literature on Medicaid, one thing that’s become fairly clear is that Medicaid is not exactly quality insurance in many situations. In fact, there’s no reasonable evidence that suggests that being in Medicaid actually improves mortality outcomes. There are questions about whether it actually improves health outcomes. So you’re right about Medicaid. The other thing I’ve noticed with the left, Hugh, is that they seem to think that if they keep crying wolf, if they keep making the argument the Republicans are trying to kill people, which is literally an argument I’ve heard them make over and over again, that somehow that’s going to stop this effort to try, as you say, to bring health care to the level where it can be best delivered to the American people, that’s at the state and local level, and that’s what this bill tries to do.

HH: Well, it is, it is extraordinarily indicative of the left’s tactics, the rhetoric that goes along with this. But I don’t think that should deter the Senate. The Senate, poor Dean Heller, I think he’s torched his political career unless he can climb back to find a way to yes. Do you think they’re going to get to a yes vote, Lanhee, because if they don’t, the consequences are terrible for health care in America as the Obamacare death spiral continues? It’s also a disaster for the Republicans. They’ll lose control of the House. They may lose control of the Senate this cycle. They’ll lose it in 2020 if you don’t deliver on your core promise of eight years and four elections cycles, your base stays home. That’s the long and the short of it.

LC: Yeah, I thought your, the piece that you wrote, Hugh, had this exactly right, which is that if Republicans are unable to deliver on this basic idea of reforming and improving the health care system by getting rid of the Affordable Care Act, getting rid of Obamacare, it’s going to be a political problem for the Republicans. There’s no question about that. In terms of what happens this week, I don’t ever underestimate Mitch McConnell. He is a remarkably skilled senator. He’s a remarkably skilled leader. He understands what the Republicans in the Senate want. My sense is that they will eventually get to yes. It’s going to be very tortured. You’re going to see all sorts of media hyperventilation about this senator not being on board or that senator being on board. But at the end of the day, this is just too important, Hugh, for the future of our country and the future ultimately of the health care system.

HH: I stress it is vitally important for poor people that we get back to a delivery system that will see them. And my one anecdote that I use again and again, if you’re a poor kid in Orange County, California, you can’t get a dentist to see you no matter how much pain you’re in. You have to go to the emergency room. And that is because MediCal dentistry, you can’t make it up on volume. They lose money on every patient. And doctors are economically rational. They’ve got to stay in business. And so it is a nightmare what we have right now. We’ve got to fix it for the poor and the indigent and the disabled, but we also have to honor political promises. And I just believe, Lanhee, that Susan Collins and Lisa Murkowski and Cory Gardner, and maybe even Dean Heller can come back from the political dead, have to compromise. But so did Ted Cruz and Mike Lee, who want to get originalists confirmed, and so does, you know, Rand Paul has always seemed to me to be lost in his own space. I don’t know what he wants. I really, I can’t figure it out. But this is the art of the possible. This is constitutional government.

LC: Right, and none of these senators that have expressed concerns, in my mind, have said anything that sort of inalterably puts them in a position where they would not be able to come back and say you know what, there’s been some changes made here and there. And look, you know this, Hugh, there’s some horse trading that goes on in the legislative process. And ultimately, these guys are trying to maintain a maximum amount of leverage to get as much as they can for their states. I can’t blame them for that. But ultimately, at the end of the day, I do hope that they are able to see clear to a path that allows them to vote for important reform. And to get back to your point about Medicaid, there is nothing in this bill that changes the eligibility of Medicaid for those who need it most, for those who are the poorest, the sickest, the disabled, those who are aged and blind. They will remain Medicaid eligible. That does not change because of this bill. I think that’s a very important thing for people to realize. The safety net remains.

HH: Well, that is not believed. Jonathan Allen just tweeted at me the central premise of the Republican bill is that an eligibility-based entitlement would be reversed. It is not being reversed.

LC: No, not at all. In fact, the approach Republicans are taking is something called per capita caps, the idea being in Medicaid we are going to allocate a certain amount of money to states based on the individual characteristics of people in Medicaid. So people who are disabled are going to get more than people who, for example, are young kids who may be healthy. By the way, you know who came up with this idea? Bill Clinton in the 1990s. Democrats, including Henry Waxman, the liberal from California, were all over this idea. They were 100% supportive of it in the 1990s. What’s changed….

HH: Explain it again. Can you explain again what it does?

LC: Yeah, so basically the idea is very simple. If you have a Medicaid program, you as a state, you are going to receive a certain amount of money every year. And how we’re going to calculate that money is based on essentially looking at the different groups in Medicaid, and paying the states a differing amount for each of those groups. So for example, someone who is disabled consumes more health care services than, let’s say, a young child, someone who’s 8 or 9 years old and otherwise healthy. So the state’s going to get more money for that disabled person than they are for the young kid. That idea, this idea known as per capita caps, was the centerpiece of Medicaid reform during the 1990s when Bill Clinton fought for it. So I don’t understand this hypocrisy I’m seeing on the left. Now people are saying that this is going to decimate Medicaid. It’s simply untrue.

HH: But I think most of this debate is simply untrue on everyone’s, you know, the idea that there is a magic repeal and the market will take over, that’s not true.

LC: Right.

HH: And there is pathway evolution in the delivery of medical care. The pathway took a huge turn for the worse in 2009. This is a turning back to the better, and it’s a first step that has to be done. And a political reality of the consequence of not doing it is, I think, a disaster, and I want to ask you about that, Lanhee. I think that you lose the House in 2018, maybe even the Senate. Heller will lose, Jeff Flake will be in trouble, because the conservative base will feel betrayed. Very simply, wave elections, as Chuck Todd likes to say, only happen when one side is energized and the other side is demoralized. Right now, both sides are energized, so there will not be a wave. But if the Republicans don’t deliver on their core promise, I think it will be demoralized. What do you think?

LC: There are serious political ramifications, and it seems to me that this is the one thing that Republicans have been saying they were going to get done. For the last seven years, we’ve talked about repealing and replacing the Affordable Care Act, Obamacare. If we’re unable to do that as a party and as a movement, shame on us for not being able to do it. And by the way, the alternative, Hugh, you’ve seen it in California. It’s called single payer health care. And unless we are able to make some real reforms and move the needle, we’re going to end up with a serious debate about whether we want to have socialized health care in the United States.

HH: Absolutely correct. Lanhee, keep coming back this week, and by the way, do you think Justice Kennedy is going to retire today?

LC: It doesn’t sound like it, but you know, this is an important thing for conservatives. It’s one of the reasons why folks elected Donald Trump president, is to put originalists on the Court.

HH: I don’t believe he’s going to retire. I think it’s all a media filler, but we’ll see at 10:00 or between 10:00 and 11:00, we’ll find out. Lanhee Chen of Hoover Institution, thank you. Follow him on Twitter, @LanheeChen. He’ll be back throughout the week as the debate evolves.

End of interview.


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