Ross Kaminsky Show, Mike Coffman, March 7, 2017
Station: KHOW, 630am
Show: Ross Kaminsky Show
Guests: Coffman, Mike
Date: March 7, 2017
Topics: ACA, Affordable Care Act, Obamacare, Repeal and Replace, Medicaid Expansion, Entitlement Reform, Devolve, Block Grants, Tax Credits, Transfer Payments, Budget, Reconciliation, Freedom Caucus, Cory Gardner, Senate, Senators, Filibuster
CALLER JOE: […] about health insurance costs, is malpractice insurance.
HOST ROSS KAMINSKY: Yes. That’s right.
CALLER JOE: Gigantic number!
KAMINSKY: Yep! We absolutely need tort reform, which is what drives the price of malpractice insurance, which then raises the cost of healthcare for everybody. You’re absolutely right. I have not seen any talk of that in the bill so far, and I think part of the reason is that Republicans hope to pick off a few vulnerable Democrats who might go along with them in an Obamacare replacement. If they also try to add on a fight with the trial lawyers — who only own the Democrats a little bit less than the teacher unions do – I think that they think that they’re just adding another much larger piece to the fight, even though I think they agree with you.
CALLER JOE: Oh, the whole situation is, the only people who make money on the malpractice lawsuits are the attorneys!
KAMINSKY: That’s right! And the attorneys pay the Democrats to keep those laws in place. And I do have to leave it there, Joe, but that’s an excellent point. It’s absolutely right, and I do think, Joe, that you will see what you want to see — as far as an attempted malpractice and tort reform — but I think you’ll see it later. I don’t think you’ll see it as part as part of the initial repeal and replacement of Obamacare, because don’t forget, to repeal Obamacare – and to do it through reconciliation, where you only need 51 votes in the Senate– it has to be done in a way that appears to be budget neutral, which leads to a bunch of tax questions that we are going to talk about in the next segment with Congressman Mike Coffman, who is going to join us to give us his opinion on the process of repealing and replacing Obamacare. But first, let’s get a quick check on the news with Pat Woodard.
KAMINSKY: All right! Seven thirty-six. Let’s not waste any time and go right to our VIP line — Congressman Mike Coffman, Republican of Colorado’s sixth Congressional District. I wanted to have Mike join us on the show this morning to get his reaction to what we now see as at least the first draft of the Republicans’ first effort to repeal and replace Obamacare. The media, of course, trying to make much of the divisions among Republicans — and certainly there are — about what is the right way to proceed. Good morning, Mike! Thanks for being here!
U.S. CONGRESSMAN FROM COLORADO’S SIXTH CONGRESSIONAL DISTRICT, MIKE COFFMAN: Good morning! Thanks for having me.
KAMINSKY: How do you feel about what you’ve seen so far?
COFFMAN: You know, I think there are elements that I don’t like. But all in all, — and I think we are talking about a major policy overhaul – I like what we’re doing. And let me tell you this: it is [sic] actually goes much further than the Affordable Care Act. This is a major entitlement reform. It is a major reform to the entire Medicaid system. And I think that that has not been part of the discussion.
KAMINSKY: How so?
COFFMAN: Oh, it goes –. So what it does, it gives states choice between block grants or a capitated amount. But it will, in fact, devolve a lot of authority down to states to make more decisions about, you know, what their own plan design is, for the for the purpose of this: for the purpose of essentially, over time, bringing down the cost of that particular program, which is the fastest-growing entitlement program in our budget.
KAMINSKY: One of the controversial parts of the initial bill is that it appears that it will let states continue the sort of Obamacare-initiated expansion of Medicaid for another few years before then capping it. I’m trying to understand why that makes sense.
COFFMAN: Oh, I –politically, it certainly makes sense. And, you don’t want to pull the carpet. But I mean, look at it this way. The fact –. So, you can have enrollees through 2019. And then, on 2020, the program is capped, meaning no new enrollees into that particular program. And the estimate — that certainly I’ve been briefed on — is that, that program — that the enrollees in that program will attrit [sic – “attrition”?] out over a five-year period — or certainly, most of them will–
KAMINSKY: Okay. Since – uhh –.
COFFMAN: –once you cap the program.
KAMINSKY: And, so, how –. What is the budgetary impact of that? Medicaid still keeps getting bigger for a while. But you’re saying it’s not going to stay bigger forever. Then it will start coming back down in size and at least a budgetary impact for the federal government will be less. And then states can decide how they want to manage their own programs?
COFFMAN: Sure. I mean, if you think about the Medicaid expansion for the – and we had a huge argument, inside, on the Republican side, in those states that didn’t take the Medicaid expansion, those Republican governors that did not, saying, “Hey look! We’re the responsible ones here.” Because, it starts out at 95% of federally –. You know, normally, it’s about a 50/50 split in the Medicaid program, between the federal government and the states. And so, but this one was done differently. The Medicaid expansion is essentially for the working poor, who were not otherwise eligible for Medicaid– traditional Medicaid—programs. So, it is — individuals without dependent children who are considered low income, then — I think, it went 138% of the poverty line – were eligible, then, for the Medicaid expansion. And [there was] enormous growth in this particular program.
COFFMAN: And so, you have to remember, this reform effort not only deals with the Medicaid expansion piece, but it deals with traditional Medicaid, as well. So, it’s a fairly massive reform. But yeah, so those states saying, “Hey, look!” – eventually it will go down to that 50/50 split, and it’s going to bankrupt these states. It is going to, — you know, their budgets are already stressed from paying for Medicaid. And it’s really going to hurt them. And so, I think that there was sort of a compromise worked out where those states that didn’t take the Medicaid expansion under the Affordable Care Act, — more people were supposed to be covered. That coverage is more from the government side than from any other side. It is not – in terms of the private coverage, but in terms of Medicaid expansion, that’s where the additional coverage has been in the country. But saying, –we had a program that preexisted the Affordable Care Act that was called ‘Disproportionate Share’ and that is for those states that have a lot of uncompensated care, that they got payments from the federal government. Those payments were being phased down under the Affordable Care Act because of the fact that – the theory was – more people would be covered. And so, we’ll plus that up some for the states that didn’t take the Medicaid expansion. And then again, we’ll phase out the Medicaid expansion.
KAMINSKY: One of — I would say probably the most controversial part of the current proposal — and I mean ‘controversial’ among Republicans—
KAMINSKY: –is the tax credit aspect, and the question of refundable tax credits versus just tax credits.
KAMINSKY: And I’ve got friends who are sort of on the Freedom Caucus side of things, who — and Rand Paul — who kind of see it as a new entitlement and something the Republican shouldn’t be doing. So, first of all, could you explain what it is, for those people who might not know what I’m talking about. And then give us your opinion.
COFFMAN: Okay. So what it essentially does, is it takes those who would prospectively be eligible for the Medicaid expansion, going forward, as we phase it out, and it offers them the ability — nobody’s forced in this — to have what’s called an advanceable, refundable tax credit. And it essentially is — will pay for, uh, pretty – most of their premium costs. And will push that population into the individual insurance market. And so, I get that it is controversial, but is in fact a replacement, of sorts, for the Medicaid expansion.
KAMINSKY: So, –but the refundable question is an issue, I think, for a lot of people, right? So–.
COFFMAN: Oh! So, it would go – it would not go to the individual. It would go directly to a carrier. So, it would not go tho the individuals. So, that part is going to be tough to debate. There is no question about that. That will be subject to debate. But what is very significant in this bill, is that individuals at this time who have to purchase their own insurance policy have no deductibility of their health insurance premium.
COFFMAN: Employers do [deduct premiums]. But individuals don’t. This gives individuals– every American who have to purchase their own insurance, irrespective of income– the ability to deduct that policy — the premium — from their taxes.
KAMINSKY: And that’s a tremendous thing. And that might actually move some part of this country away from employer-based insurance which sometimes locks people in the jobs that they would rather leave, and things like that. So, that would be –. So, that was not clear to me. I just learned something new from you, there. So, you’re saying–.
COFFMAN: There’s a very big change in terms of tax policy. So, then you’re talking about, sure,l that that there would be tax credits available for lower income, and as that lowest rung – the working poor would then have something, you know, akin –you know, yes, you’re correct, it’s a transfer payment – akin to the Earned Income Tax credit. Although, that program desperately needs reform.
COFFMAN: But it does go—it’s, you know, it does go – not to the individual but it would go directly to a carrier — an insurance carrier — in the individual market.
KAMINSKY: We’re talking with Congressman Mike Coffman, Republican of Colorado’s sixth Congressional District. Mike, let’s talk politics for a minute, here. Within this bill, there are lots of things that Republicans will agree and disagree on. So, it leads to this question of, what can pass? What can get to Donald Trump’s desk, especially with four senators — including our own Cory Gardner– saying that they need a bill that protects Medicaid a little bit better than the current bill does?
COFFMAN: I — well, you know, I think the bill, in my view, does a good job in terms of Medicaid expansion, from my perspective, you know, but we have to reform the entire Medicaid system, and so we can debate that on the mar–. You know, is it a block grant, at the end of the day? Is it some sort of capitated amount per enrollee? But I think, at the end of the day, we’ve got to stop managing this program out of Washington DC. We’ve got to devolve it down to the states. And we have to, you know – the problem with Washington DC is [inaudible] money. And we have to limit our exposure in the program. And let me tell you, if you shift the responsibility down to the states, they will figure out much better ways to do this. You know, getting away from a fee for service system in this population, and moving it over to managed-care. I just think that there are lots of ways that states – you know, once they have skin in the game in terms of control over the policy, they will make rational decisions that reflect their specific states. And we’ll have fifty laboratories of experiments. Washington does way too much, and as a result, I don’t think does very many things very well. And so, the more we can shift down to states, the better. There will be people that argue about that, saying that the states can’t meet the obligations. Well, neither did we! And we are $20 trillion in debt, and I think the American people have to understand that.
KAMINSKY: Mm-hmm. So, I hope you won’t object to the characterization. I consider you to be a center-right sort of guy, not the far right wing of the Republican Party.
COFFMAN: I think that’s accurate. Yeah. Sure.
KAMINSKY: Okay. And so – I — I know there are folks — and folks who are my friends in Congress — who would be inclined to vote against this because of what they perceive to be a new entitlement, the transfer payment and all that. But as I think about the game theory of it, I wonder if those folks will then want to be seen as the people who prevented the repeal and replacement of Obamacare. So, again, my question for you Mike is, within the Republican caucus, how do you think this plays out?
COFFMAN: Well, I don’t know. You know, it’s always easy, politically — in a major policy initiative like this — to find some part you don’t like, and there are some parts that I don’t like. But all in all, this is the biggest entitlement reform in the history of the United States, that goes beyond the Affordable Care Act [and] into all of Medicaid. And so, you know, there will be people who sit their hands because it’s the easy thing to do politically. And I get that. But if you look at this in its overall — as to what it does, um, I think it is a positive move for this country. I hope we have the support for it. I’m starting to have doubts. Um, and so, I really don’t know what is going to happen.
KAMINSKY: I would say – this would be half comment, half question for you,– last thing for you, Mike. I would say that if –with a Republican president, a Republican Senate, and a Republican House – if Obamacare cannot be repealed and replaced, it’s going to be very difficult for Republicans – generally speaking, going forward — to make an argument for why they should even exist as a party.
COFFMAN: Absolutely. I would agree with you. The, uh – Now, one thing that is –. So, to understand the mechanics of this, we’re using the mechanism of – what’s called ‘budget reconciliation’. And budget reconciliation is all the tax and spending parts of the Affordable Care Act. What is important to note about that, is that, quite frankly, here’s the problem: Democrats are going to sit on their hands. They are not going to lift a finger and help pass any aspect of this, for partisan political purposes. And so, then, you really – if Republicans are divided, that’s a problem. But the important part about this mechanism, is that it cannot be filibustered in the Senate.
COFFMAN: So, as long as enough Republicans stay together, we can get this passed and get this on the President’s desk. But, um, you know, if not, then that’s a problem. And the administration can do a lot, too. There are well over 1000 references within the Affordable Care Act that delegate to the Director of Human Services – the Secretary of Human Services, Dr. Tom Price — the authority to make changes in certain areas. And so, there is — there’s a lot that we can do — as Congress — that only we can do. But there is a lot that the administration can do as well.
KAMINSKY: Congressman Mike Coffman, Colorado’s sixth Congressional District. I know you have to get on airplane. Thank you so much for your time and your insights! I learned quite a lot from that conversation. I really appreciate it.
COFFMAN: Hey, Ross! Thank you! Appreciate the time!
KAMINSKY: All right. We’ll talk to you again. Fascinating! I did not know – and I still need to look into the details of what Congressman Coffman said there about the deductibility of health insurance for individuals buying insurance themselves — not going through corporations. Right now, only corporations can fully deduct health insurance. So, we’ll see exactly what that is in the tax credit part of this. I’m going to research that a little more, and bring it back to you. One quick thing I want to mention here: we hear throughout this conversation now, “How are you going to pay for this repeal?” Well, what does that mean? Just think about this for a moment. What does that mean when they say how are you going to pay for repealing Obamacare? What does that mean, if you have to pay for something? It means–. If you have to pay to repeal something, it means that the thing that you’re repealing is bringing money into the government. Right? If you have to pay for it, it means that by getting rid of it, you are taking money away from the government. So, what does that mean? That means that in fact, Obamacare was an enormous tax hike, even though every Democrat who voted for it told us that it wasn’t. And we know that Justice John Roberts — Chief Justice John Roberts — said that it was, and then did all these judicial gymnastics to uphold the thing. But I just want to point out to you the lie that has been told to us –you know, in every way! So many lies about Obamacare. But the fact that this conversation even includes the question, “How do you pay for it?”, means that Obamacare was an enormous tax increase. One interesting part of this, by the way, the bill intends to leave in place the so-called Cadillac tax on very high end, expensive health insurance programs that normally union members have. And so the unions are against it. Why are they leaving it in? Because without it, they can’t make it look like this thing is budget neutral over the long run. So, they’re putting that in. Budget neutral, over the long run, they have to leave this tax in. That’s a bunch of BS. You know what’s going to happen. They’ll leave it in, with a wink and a nod to each other. They’ll leave it in – “Hey, this makes it budget neutral.” And then, later on, Democrats and Republicans who both hate the Cadillac tax but for entirely different reasons, will then do another bill and get rid of it. Let me get a quick call on this. Let’s go to Bill. Hey, Bill, you’re on the show. What’s going on?