Top officials from the Trump administration, including Vice President Mike Pence, went to Providence, Rhode Island last weekend to secure the votes they needed to pass the Senate health care bill. Providence is where several dozen governors, many of whom are not pleased with the bill’s plan to snatch $772 billion in delicious Medicaid dollars from them over the next 10 years, were convening for a summit of the National Governors Association. The generous way to describe the administration’s attempts to secure the backing of key Republican governors would be unsuccessful. The more sober term would be disastrous.
The top target for Pence, Health and Human Services Secretary Tom Price, and Centers for Medicare and Medicaid Services Administrator Seema Verma was popular Nevada Gov. Brian Sandoval. Sandoval, a moderate Republican, loves Obamacare’s Medicaid expansion. More importantly, Sandoval owns a pet named “Nevada Sen. Dean Heller” who dutifully obeys all of his master’s commands. The administration can’t just earn Heller’s support, which is key to passing the bill, by inviting him to the White House for cocktails and schmoozing. To get Heller, you need Sandoval. And leaders didn’t get him last weekend.
“I’m no different than I was,” Sandoval told reporters after his meeting with Price and Verma on Saturday. That’s a problem for the administration and Senate leaders because Sandoval “was” about as opposed to the bill as any Republican could be. Just a few weeks ago, during a press conference alongside Heller, Sandoval seemed capable of taking out a machete and stabbing the stack of papers known as the Better Care Reconciliation Act.
On Saturday, all of the governors in attendance held a closed-door briefing with Price and Verma. In an unfortunately timed prelude to Price and Verma’s remarks, the governors were presented with a new study from the health care consulting firm Avalere Health which, according to Politico, projected that the Senate bill “would result in reductions in federal Medicaid funding to states ranging from 27 percent to 39 percent by 2036.” In other words, states would need to make up those shortfalls on their own, either through budget cuts or tax increases—or as the bill’s defenders would put it, through “innovation”—to maintain their current offerings. (I feel compelled here to note that arch Democratic operative and current Virginia Gov. Terry McAuliffe, as chair of the NGA, organized this summit.)
Sandoval isn’t the only problematic Republican governor from the administration’s standpoint. Ohio Gov. John Kasich, who hates the bill about as much as Sandoval, has noticeably hardened Sen. Rob Portman’s opposition to the bill’s Medicaid cuts. (Kasich was not at the governors’ meeting, though that didn’t stop Pence from implying that Ohio’s Medicaid expansion was somehow hurting Ohio’s disabled population. This jab backfired on Pence and didn’t go over well with the room.) And though we shouldn’t really expect Sen. John McCain to vote against the BCRA once he returns from surgery, that he’s even thinking about it is a sign that his governor, Republican Doug Ducey, isn’t happy.
“I am talking with Sens. Flake and McCain and I’m telling them what my opinion is,” Ducey said in a radio interview, “and I’m letting them know that I don’t want to see any Arizonan have the rug pulled out from underneath them.” The Senate bill, he said, “needs a lot of work.”
The reason the administration and Senate leaders, with all of their influence and power, can’t bring these governors on board is a simple math issue that no argument can surmount. The Senate bill deprives states of $772 billion in Medicaid funding over 10 years and offers them far less than that in return. The pitch from Verma and Price to these governors is that they will use money from elsewhere—the bill’s state stability and innovation fund, along with refundable tax credit money and state waiver flexibility—to help these governors fashion private plans for low-income citizens. Verma and Pence designed a version of this for Indiana, which required new beneficiaries to pay premiums towards plans, and it appears that they want to take it national. The governors are extremely resistant.
Let’s do some back-of-the-envelope calculations. The bill’s state stability and innovation fund sits at $182 billion right now. Those funds could bolster the money earmarked for the refundable tax credits very low-income people are offered to purchase private health insurance. That could be some tens of billions of dollars. So let’s say that all added up to around $250 billion from HHS over 10 years to help states protect both those who are currently on Medicaid or have a pre-existing condition and need to secure individual market insurance.
Now: Is $250 billion less than $772 billion? It appears to be. That makes this bill a bad deal for governors, especially those that have expanded Medicaid. The BCRA puts in less than it takes out, which is the whole point of conservative health care reform and the natural policy direction of a bill to “repeal Obamacare.” Right now, Price and Verma are trying to convince governors like Sandoval that less money is good for them and definitely better than more money. To Republican governors who are ideologically committed to The Cause, it might be fine. But to pragmatic Republican governors of Medicaid-expansion states, it’s not a great elevator pitch.