The Corner

Politics & Policy

Why the Senate Health Care Bill Matters, in Two Charts

National Review’s editors — great Americans all — believe that “it will be difficult to mourn the loss” of the Senate health-care bill, if it fails to pass. This couldn’t be further from the truth. I will try to explain in two charts.

The first chart details the two major components of federal health spending: the blue is Obamacare ($2 trillion in coverage expansion less $850 billion in Medicare cuts, for a net total of around $1.2 trillion over ten years), and the red is what Washington was already spending on health care, pre-Obamacare.

The government takeover of health care didn’t happen in 2010. It happened after Barry Goldwater went down in flames in 1964 — allegedly a high point for the conservative movement — paving the way for LBJ to pass Medicare and Medicaid.

It’s important to repeal and replace Obamacare. And the Senate bill is the best one yet designed by Congress to replace single-payer entitlements with market-oriented health-care reform. But repealing and replacing Obamacare does very little to address the fundamental trajectory of the growth of federal involvement in our health-care system. To do that, you have to tackle the two big Great Society entitlements: Medicare and Medicaid.

Unfortunately, the Senate is barred from using the reconciliation process to change Medicare. And even if it wasn’t, President Trump has made clear his opposition to Medicare reform. 

But the Senate bill does historic work to rein in the Medicaid program, putting it on a fiscally sustainable path and reducing its future spending by trillions of dollars. Here is how the Congressional Budget Office projects future federal spending on Medicaid under current law (i.e., Obamacare), and under the Senate bill:

The difference between those two numbers is substantial. Even if the CBO is overestimating the savings — and I believe they are — we’re talking about trillions in spending reductions over the next several decades as our second-largest health-care entitlement grows more slowly. That means lower taxes and more economic growth. It means states will have to make fewer cutbacks to other priorities like education and public safety. It means that we have a fighting chance of leaving our children and grandchildren a solvent country.

To say that “it will be difficult to mourn the loss” of this bill at a time when we can’t even get Congress to defund NPR or the NEA is to lose perspective.

Some argue that these spending cuts will never take place, because they grow in size in the future. But as a criticism of this bill, that makes little sense. No law that cuts spending today is ever immune from being reversed over time, because our Constitution mandates that future Congresses are not bound by the actions of the present one. Indeed, sudden cuts that create massive disruptions are much more likely to be reversed than gradual ones that give states and individuals time to adapt. The best spending cuts harness the power of compound interest to reduce the rate of spending growth over time.

Does the Better Care Reconciliation Act do every single thing conservatives want to do in health care? No. But it does a lot: about as much as can be expected of a 52-vote Republican majority that is subject to the filibuster.

To use a football analogy, the Left has succeeded in growing the size of government because the Left is good at gaining first downs: the unglamorous, everyday legislative victories that over time build a vast statist edifice. The Better Care Reconciliation Act is a 50-yard gain, and it gives us the tools to finish the job: but only if we recognize victory when it is staring us in the face.

Avik Roy is the President of the Foundation for Research on Equal Opportunity (FREOPP.org), a non-partisan, non-profit think tank.

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