To cut federal spending, Republicans should join Newsom in reforming Medicaid.
It says something about congressional Republicans’ unwillingness to reduce Medicaid spending when many of them stand well to the left of Gavin Newsom — I repeat, Gavin Newsom — on the subject. The California governor, a Democrat, recently put forward proposals that would reduce program spending and enrollment.
Newsom won’t win awards for courage when it comes to reforming Medicaid; an ongoing budget crisis, as opposed to policy principle, prompted his volte-face. But the problems in California speak to the larger dynamic Washington will face if it doesn’t get serious about curbing Medicaid’s problems.
Restrictions on Undocumented Immigrants’ Coverage
In his revised budget, Newsom proposed freezing enrollment for undocumented immigrants. Children would be permitted to join the state’s Medicaid program, but no more adults could enroll. Those adults who remain enrolled would face a $100 monthly premium, beginning in 2027.
The Medicaid expansion to those in the country illegally has remained a source of controversy. For starters, that program came in billions of dollars over budget earlier this spring, forcing Newsom’s office to seek emergency bailouts for the Medicaid program. That bailout came after Newsom used a legally questionable accounting scam to have Washington help fund this program — even though federal tax dollars generally do not cover Medicaid coverage for the undocumented. The reconciliation bill before Congress would prevent future use of this accounting loophole by states, saving an estimated $34.6 billion over ten years.
Given that Newsom helped expand California’s Medicaid coverage to the undocumented to begin with, let’s not kid ourselves that he acted out of deep-seated principle in proposing an enrollment freeze and premium charges. Instead, his state faces yet another cash crunch, and the governor was forced to react. Which could well describe what will happen in Washington once foreign governments get tired of financing our ever-increasing debt.
Death and Destruction?
But the timing of Newsom’s proposal, coming in the middle of a similar debate in Washington over Medicaid, brings with it no small amount of irony. For starters, Democrats are claiming that portions of the reconciliation bill allowing states to impose $35 co-payments on some services for Medicaid beneficiaries would result in thousands of individuals dying from a lack of care.
If congressional Democrats think $35 co-payments will kill Americans, then what do they think about Newsom charging some of California’s Medicaid recipients three times that amount monthly? Will they demand that Newsom retain “free” health care for those in the country illegally — or admit that their over-the-top attacks on the reconciliation bill are politically motivated and disingenuous?
Objections to Reform
The second irony comes with congressional Republicans concerned about “cuts” to Medicaid benefits. Beyond the fact that “cuts” should constitute a four-letter word when it comes to the reconciliation bill, why are “moderate” lawmakers scared of their shadow when reforming a broken program?
Newsom has given congressional Republicans all the political cover they should need to alter Medicaid benefits — particularly those Republicans from the Golden State who represent marginal districts, such as Reps. Young Kim and David Valadao. California’s fiscal crunch demonstrates what happens when governments budget irresponsibly, making the policy case that Washington needs to get its spending under control. Medicaid desperately needs a dose of that fiscal responsibility, with spending levels exploding over the past year, thanks, in large part, to regulatory actions of the Biden administration.
If Newsom can propose actions to reform the Medicaid program, then congressional Republicans can and should do the exact same thing. It’s just a question of political will — and whether lawmakers mean what they say when it comes to reducing federal spending.
Mr. Jacobs is Founder and CEO of Juniper Research Group, and author of the book The Case Against Single Payer. He is on Twitter: @chrisjacobsHC.
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