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Republicans' Toxic Fight for States' Rights

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As Congress factors in Sen. John McCain’s refusal to back, for now, the latest scrupulously unvetted legislation to scramble the American health care system, the gamey smell of states’ rights still lingers in the air.

“Instead of a Washington-knows-best approach like Obamacare, our legislation empowers those closest to the health care needs of their communities to provide solutions,” said Republican Senator Lindsey Graham, co-sponsor of the latest scratch at the Republican itch to destroy Obamacare anyway, anyhow. “Our bill takes money and power out of Washington and gives it back to patients and states.”

For advocates of quality health care, broadly delivered, Graham’s paean to the county courthouse smells as healthful as a gust of napalm in the morning.

(Related: Foes of Wal-Mart Health Go to Court)

Even if the Graham-Cassidy bill doesn’t survive the rush to pass it before the fiscal year ends at the end of September, the legislation can resurface in the next fiscal year. Its chief selling point never grows stale in Republican circles. It promises to unleash the innovative powers of the states by reducing the amount of money Americans have to afford health insurance. Unlike previous GOP proposals, which merely sought to deform Obamacare beyond recognition, this legislation would indeed destroy it.

It would repeal the Affordable Care Act’s coverage ownership and offer mandates, and replace its premium and cost-sharing subsidies and Medicaid expansion with block grants to states. It would abandon commitments to essential benefits in policies and to regulations preventing discrimination on the basis of pre-existing conditions.

Much attention has been focused, rightly, on the massive transfer of federal resources the bill envisions from blue states to red states. The Kaiser Family Foundation estimates that from 2020 to 2026, block grants would boost federal health spending in Mississippi by 148%. New York, meanwhile, with more than six times the population of Mississippi, would see its funding cut by 35%.

The point, Republicans say, is to rectify Obamacare’s unfairness to states. “Those funds are quite unequally distributed,” said Sen. Bill Cassidy of Louisiana, explaining why the most Democratic states would lose under his legislation and the most Republican states would gain. “Where you live should not determine how healthy you are.”

Of course, geography has nothing to do with access to federal subsidies for health insurance, except to the extent that Southern politics is a state of mind. States controlled by conservatives, such as Mississippi, have opted out of Obamacare’s Medicaid expansion, adamantly refusing federal aid to their own poor and working-class citizens. The money is available. Conservative politicians just refuse to take it.

Yet these same hidebound state capitals, many operating under the same ideological, class and racial prerogatives that have dominated them, and restricted opportunity in them, seemingly forever, are now destined to become laboratories of beneficent social innovation under Republican block grants.

How preposterous.

There are 19 states that refused to extend health insurance to their poor and near-poor citizens when the federal government was willing to pay 100% of the initial Medicaid cost and 90% over time. Those states will not suddenly become hotbeds of innovative health care delivery when the federal money is reduced, and transformed, into a block grant.

USA (Image: Thinkstock)

Under Graham-Cassidy, states would not even be bound to use the block grant to help citizens gain insurance. “The block grant funding is very broad in terms of the use of it,” said Diane Rowland, executive vice president of the Kaiser Family Foundation, in a telephone interview. “It doesn’t even say you have to use it for health insurance.”

Under Obamacare, federal money “follows people,” Rowland said. Graham-Cassidy, she said, “basically gives the states flexibility to decide how to distribute these funds.” The money could end up with doctors, hospitals, the reinsurance market or elsewhere.

The incentives for Republican politicians to ignore poor people, especially poor black people, while directing benefits to their donors and voters are considerable. Republicans acted on those incentives long before Donald Trump’s transformation of the GOP from a defensively all-white party to a defiantly all-white one.

A handful of Republican governors balked, with greater or lesser sincerity, at accepting federal stimulus in 2009 to buffer the effects of the greatest financial calamity since the Great Depression. (Hoover-Mellon liquidationism always finds a constituency in the GOP.)

Earlier this year, Missouri passed a law rejecting $8.3 million in federal funds for women’s health rather than let some of the money flow to health providers who perform abortions. Florida famously rejected federal funds for a planned high-speed rail line between Orlando and Tampa.

“We absolutely cannot trust our own state legislature to be sensitive to the health care and insurance needs of our people,” said former Florida Chief Financial Officer Alex Sink, a Democrat, in an email. “They will take this money and enrich the insurance industry and health care providers or, worse, divert the money to non-health-related purposes. Our totally Republican-controlled legislature has a long history of this behavior.”

Florida’s history is American history. As Ira Katznelson explained in “When Affirmative Action Was White,” the New Deal was structured to win support from Southern congressmen who controlled key committees. Their support was contingent on making sure that as few benefits as possible flowed to blacks. That’s why Social Security initially excluded domestic and agricultural workers.

Likewise, much of the G.I. Bill, the sprawling array of federal benefits that helped create unparalleled middle-class prosperity, was administered locally, the better to channel its benefits exclusively to whites, as Southern congressmen demanded.

Republicans may well still hate and fear Barack Obama, his health care law and whatever strange voodoo they believe his presidency represents. They may even hate and fear all of that so much that they will, sooner or later, pass sweeping social legislation that they don’t even pretend to have analyzed or understood.

But the resort to “states’ rights” is more than an effort to kick responsibility to 50 disparate entities of varying competence. It’s more than a party-wide dodge of accountability. (Although it certainly is that: By the time federal funds dry up, perhaps voters will have forgotten where, and with which party, Graham-Cassidy originated.) Above all, “states’ rights” is the mechanism by which conservatives traditionally have put certain people in harm’s way, and then pretended that they never saw the truck that ran them over.

—-Read Witnesses Call for Relaxing ERISA Uniformity on ThinkAdvisor.

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