Sunday, March 8, 2015

Obamacare is about People, not States

On January 30, Ezra Klein posted an insightful Vox piece about one of the great ironies of the Affordable Care Act.  After a lot of thought of my own, however, I don’t think it’s much of an irony at all. 

Klein’s analysis noted that the original ACA – supported heavily by Democrats – featured a massive redistribution of wealth from Blue States to Red States.  The people helped by Obamacare’s Medicaid expansion and exchange subsidies were disproportionately concentrated in the states of the ex-Confederacy that had low-wage economies with skimpy existing Medicaid programs. (An old joke in Mississippi claims that you have to be legally dead to qualify).

The irony that Klein points out has been that Republicans are fighting tooth and nail to turn the ACA into a program that drains money from Red states and transfers it to Blue States. When the Supreme Court held that the Medicaid Expansion had to be optional for states, many states dominated by Republicans declined the expansion while Blue States snapped it up, shifting the benefits flow from Red States to Blue States If the Supremes decide the case of King vs. Burwell in favor of the forces of darkness, it will declare subsidies on exchange marketplaces illegal – but only in the states on the federal exchange, which of course are disproportionately Red States. As a result, higher earners in Texas will be sending their increased Medicare taxes to poor and working-class people in states like New York and California while their own states lose out.

It’s an interesting puzzle, but I think it can be explained quite easily – at least on the liberal side of the equation – by changing our unit of analysis. Klein looks at states, but I think it makes more sense to look at people to explain this paradox. On some issues, perhaps it makes sense to look at issues as state vs. state.  If a major manufacturer decides to leave one state and move to a second, for example then pretty clearly the second state is better off relative to the first. Politicians will act accordingly and line up state against state.  

But the motivating purpose behind the Affordable Care Act wasn’t about New York vs. Texas, it was about 48 million people in the United States who didn’t have health insurance. Ohio Senator Sherrod Brown didn’t refuse to take federal health insurance because Florida got more Medicaid dollars than Ohio, but rather in solidarity with millions of Floridians and Ohioans who didn’t have access to health care at all. If Mississippi took $14.5 billion in federal money over the next decade to expand Medicaid, I wouldn’t be mad that that money wasn’t going to Pennsylvania, my latest state of residence; I’d be celebrating because 169,000 of my fellow citizens got access to health care.

On the flip side, the logic is perhaps more difficult to explain for a Red State GOP governor like Rick Perry or Mississippi’s Phil Bryant. There’s the potential that they just don’t understand it. Perry recently suggested that millions of Texans liked not having insurance, which may represent a weak dodge or actual ignorance of reality. But there’s also the possibility it’s about people for them too – specifically “those people” who are poor and likely have a darker hue of skin and are viewed as undeserving of federal benefits. Politicians used to be able to wrangle earmarks and pork for their state , which reduces the role of ideology, but ideological sorting and polarization has been getting stronger over the last 40 years. As a result, politicians who rely on bringing home federal dollars to get votes find themselves facing tough primaries – like the one Thad Cochran barely survived in Mississippi in 2014.

We can solve Klein’s puzzle then by re-imagining the pieces. It’ not about cash flows to states, it’s about people – and whether a state official’s ideological blinkers permit those without access to health care to be seen as human beings deserving of compassion or dignity.

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