Oklahoma Senator James Lankford joined me this morning:
HH: I’m joined now by United States Senator James Lankford from the great state of Oklahoma. Follow him on Twitter, @SenatorLankford. Senator, welcome back, always a pleasure to speak with you.
JL: Always glad to be able to be with you.
HH: Senator, I have spent the last two weeks talking to the Speaker, Leader McCarthy, and the chairmen of the committees Walden and Brady that had original jurisdiction over the American Health Care Act, and just now with Diane Black, chairwoman of Budget. They all seem to say this is the best we can do. We’re going to send it to the Senate, and if they can do better, they know their rules better than we do. Let them make amendments. But then Senator Cotton on this program yesterday, and Senator Cruz to the New York Times, said the bill as it exists in the House won’t pass. They should change it there. Are they right that you folks can make amendments, and you’re better positioned to know what will get through the reconciliation narrow gate?
JL: Well, we do know what will get through the narrow gate of reconciliation. Obviously, we can work with our parliamentarian on that, but we can also work on it now to be able to make those changes. They have an opportunity before it gets to the floor that we can work and pre-conference this bill and get a chance to fix some key areas. And the key areas are things like the Medicaid changes that they’re making right now to be able to make sure when we make these. They’re very significant. They’re a great first step, but let’s go ahead and finish those out well, deal with the tax credits that are there. They’ve doubled the tax credits from what Obamacare did, and there’s been a lot of concern just on the budget effect of that. While everyone would like to have tax credits, doubling what Obamacare had, I think, is the wrong direction to go, and let’s see if we can’t get a chance to fix that. And then there’s some targeted areas like for those individuals 60 years old where health care is incredibly expensive, and for those that are in poverty, those tax credits actually may be too small.
HH: Yeah, there’s a…
JL: And so we need to figure out how to be able to, how to correct that.
HH: There’s a four square box in my mind. You’re young or you’re not young, and you are, I mean, you’re young or you’re not young, and you’re poor and you’re not poor. And most of the tax credits should go into the box that is poor and not young. That’s where we need to put the tax credit. Right now, it doesn’t seem to actually bend towards the poor and the not young. It seems to be just a little bit too straight line for me.
JL: It does for me as well. They decrease by half what the subsidy would be, and then they spread it out over a much larger area. And there are just some complications with that, that I look at, that have real effects on families’ lives. And if we’re going to step into that gap, we need to step into it.
HH: You can change that in the Senate, though, if they don’t change it in the House, correct?
JL: We can. We do have another option to be able to change in the Senate. Our best case scenario, though, is for everyone that’s in the House when they’re voting on it to be able to see here’s what the product will look like. This is something that all of us, I’ve been in the House and the Senate a short six years, in Congress, but in the entire six years that I’ve been there, this has been the dominant conversation. So the best bet we can do is to be able to make sure that we get this right.
HH: Now Senator, I also have been studying the [Byrd] Rule, which governs reconciliation. And as I read it, if you impose any tax that produces any revenue, that qualifies for reconciliation unless it somehow changes Social Security. I’ve gone over it a few times. And I don’t know that the House has been creative enough in the areas where the conservative critiques have come. You’re talking about the wet critique right now, it doesn’t do enough for poor people exiting Medicaid, and I agree with that. But the conservative critique comes in three areas. I want to bounce some ideas off of you. Why not put a tax surcharge on all policies emanating from states that do not limit medical malpractice damages in the area of pain and suffering? That’s med mal reform, and we can use the taxing authority to dis-incentivize states from not doing that. Does that get through reconciliation?
JL: I believe that that would, and there are multiple areas that deal with the regulatory front, this is another key area that are not addressed. When you go through the essential health benefits, when you go through medical malpractice, when you go through states compacting with other states to be able to purchase over state lines, all of those things, you can engage in, and we believe that they, you can write them in such a way they would pass the reconciliation rule.
HH: Can you, for example, tax all policies which are not available in five or more states? That’s, that just simply puts it on the insurance companies to start forcing and gaining a competitive advantage by having state, I call them portable policies. It’s not really portable. They’re just available in many states. And that will drive down the base [cost]_[. Can you tax them and therefore get them, those that don’t qualify, into the reconciliation process?
JL: You could. Obviously, we’d want to be incredibly attentive on how we did that. Even an idea like taxing across give states, that works very well if you’re in the Northeast and you can cross five states in five hours. If you’re in Alaska, that’s a much tougher thing to be able to do. So there are some ways to be able to take that on. Short answer on it is yes, there are ways to be able to deal with some of the things like the essential health benefits and some of the regulatory issues that drive down the cost of health care. The two main purposes of this is to be able to eliminate the mandates, which the American people hate, on the individual mandate and the employer mandate. And the second part of this is to drive down the cost. We have six and a half million people in the country just last year that paid the penalty rather than buying Obamacare, six and a half million people. So this is something that people are incredibly frustrated with, and it has shifted who has coverage in America. For those that have, that are in poverty, have greater access to coverage. And those that are in the middle class, as Bill Clinton famously said, this is the craziest thing ever, because it’s driven them out of being able to afford health care.
HH: Now I have the killer app, Senator, and I just want to bounce it off of you. If we tax all policies from companies that do not offer at least one policy with a limited number of so-called essential benefits. In other words, you are rewriting the essential benefit rule to make it a bare bones, high deductible, small coverage, you know, major medical catastrophic. If you tax all policies that issue from companies that don’t offer at least one of those, you will get a bunch of those offered on the marketplace. It’s like the killer app. Why haven’t we don’t that?
JL: Yeah, well, just step it up one level above that, and one of the things we’d like to do is to be able to tell the states to be able to define out those individual benefits rather than the federal government have a centralize control. Again, the main purpose of health care is being able, that individuals have the option to be able to do what is best for them. Some individuals have cancer histories in their family. Some people have diabetes histories. They want different types of policies. Some have a very healthy past, and they want a different type of policy. The states should be able to drive that not only regional, but they should be able to work with companies to be able to make sure there’s a maximum number of options. If people in my state, for instance, 77 counties in my state, there is only one option on the individual market, one company, one set of options. That leaves the people in my state only with very high-priced insurance.
HH: So what I’m trying to educate, I’m trying to educate my audience and maybe House members that they can use the taxing authority against states to dis-incentivize bad behavior on their parts that drive up the cost of health insurance. I don’t see a lot of that in the House bill, because maybe we’re afraid of saying we’re adding taxes. But when you’re dis-incentivizing non-competitive behaviors that raise the cost of insurance, that’s good conservative policy, isn’t it?
JL: That is engagement. That is what the federal government has done. But again, you’ve got to give the decision making authority back to those states, back to those individuals, and back to those individual businesses. This is very similar to what the House put out and said that you have guaranteed issue for health care. But if you decide not to buy coverage when you buy back in, it’ll be 30% more expensive not to the federal government, but to the insurance company, because they’re the ones that face the loss.
JL: That is again a conservative policy of not trying to mandate to someone. No one’s forced to buy that. But there’s an incentive to say if you buy it, it is the right thing to do. If you buy it, it is less expensive to be able to get that. So keep your continuous coverage. That’s very important to have. If you choose not to, if you choose to bounce back and forth, you can. It’s just more expensive.
HH: So Senator, can this bill be saved, because it’s so vital not to punt the one opportunity we have had in 60 years to reform a major entitlement. It’s ten times as big as the welfare reform that preceded your time in Congress. It’s enormous. I’ve followed this for a long time. We can’t punt this away. But it seems like the House wants to punt the tough decisions to the Senate, and Senators are trying to get them to do some of the heavy lifting. What’s the solution? Does it come down to President Trump getting everyone in a room and making it happen
JL: No, that is a key part of, any time you have government where you have the same party in the House and Senate, and the White House, the White House is the one that eventually gets everyone together and says let’s do some final resolution on that. That will be exceptionally important. My goal would say let’s not wait on it. Let’s not punt it back and forth and try not to move it back and forth. Let’s pre-conference it, and work on the language. Once we have language that settles for the House, and when everyone knows what they’re looking at, we can take that exact same language, take it to the Senate parliamentarian to be able evaluate all the issues with the Byrd rule and reconciliation before the House ever votes on it. They know what the final product is, and that gives them the option. Remember that when we went back through this before in 2015, the House sent over one section for reconciliation, and the Senate then added to it significantly in 2015, sent it back to the House, and then of course, President Obama punted it. I would rather allow the House members the first time around to be able to have full disclosure of what we’re dealing with in final product.
HH: Now Senator Lankford, I have to ask, because many, many people raise this question. Senator Reid used the Reid Rule to change the rules of the Senate mid-stream with a simple majority. Many people are asking since the Democrats did it once, why don’t the Republicans use the Reid Rule to change the Byrd rule to allow for other amendments to be germane to reconciliation? That will tie the score of rule changes in mid-stream. Why not do that?
JL: Well, that would be the nuclear, the famous nuclear option that you just overrule the parliamentarian. The problem with that is the Reid Rule is not the Reid Rule, and the Byrd Rule is not the Byrd Rule in this sense. It’s actually the Byrd Law. It is statute on the qualifications for reconciliation, and it was put into law that there are six areas you cannot touch in reconciliation. So for the Senate to step up and say we’re going to ignore the law, we’re going to pass law by ignoring the law, is a different level. I have been one all along that said let’s find a way to be able to work through and be able to do it under the law, and not say that we in the Senate are above the law and then yes, the Byrd Rule is in law, but we’re just going to ignore it. I think it’s bad precedent.
HH: All right, I get that. Now I want to go back. I’m watching my Twitter feed, and Robert Coco just tweeted out the Senator didn’t address your killer app. That’s the problem with these guys. So I want to go back to my killer app.
HH: If either the House or the Senate includes a provision to tax all health insurance policies from companies that do not offer at least one policy with a limited number of essential benefits, a bare bones policy, a high deductible, minimum benefits policy, you tax all of their policies. Does that make sense to you? Would that pass reconciliation?
JL: I would need to get a chance to take a look at the details, because obviously, it’s going to matter a lot, and everybody’s going to say I ignored your question again. But I tell you, there’s a lot of specifics in that, that I want to make sure I am one that wants to avoid as many mandates as possible, because the American people hate the mandates to be able to give the choices. So I want to be able to look at a proposal like that and say all right, let’s figure out how to be able to do this that allows people to be able to make choices as they choose to, but it is much cheaper if you do it the other way. A tax is a way to do that. The cost of their insurance is another way to do that. So there are multiple ways to be able to get at the same thing. But at the end of the day, we do want to encourage people to get especially into group policies. Group policies are much cheaper, it’s one of the things that Rand Paul has talked about that is a very valid point, and that is about associations for individuals that are in the individual market to be able to join in associations rather than standalone. But the point is to drive the group market, because insurance is cheaper at that point.
HH: I agree. It’s just harder to use tax penalties to incentivize behavior with the group policy thing. Senator Lankford, I appreciate you coming in. Come back early and often through this most important debate. I appreciate it very much.
End of interview.