THE BLOG
09/07/2012 07:10 pm ET | Updated Nov 07, 2012

Two Roads Have Diverged on Health Care -- One Will Make All the Difference

Now that the Democratic and Republican Conventions are over and the election debate is in high gear, what should we make of the differences between the two parties' approach to health care reform (The Affordable Care Act)? Will health care be a major issue in the next two months or not? What will Congress attempt to do related to health care while we wait for the outcome of the election?

Both Democrats and Republicans call this election a choice of very different paths, and they are right. Two roads have diverged in this debate, and your choice could make all the difference. The outcome could not be starker -- if Republicans win, they would eliminate the ACA, turn Medicare in to a premium support program and block grant Medicaid to the states. If the Democrats win, they would keep the ACA on track allowing millions of individuals and small businesses to obtain affordable health insurance in 2014, finish closing the prescription drug doughnut hole for seniors, continue offering access to preventive care services at no co-pay, support women's health care, keep Medicare solvent until 2024, and enhance the funding level of Medicaid, the program that serves the poor, disabled and seniors in nursing homes.

In the two conventions, the Republicans hammered on repeal of Obamacare with little in the way of a "replacement" strategy other than their tired and worn-out talking points about malpractice reform, selling insurance across state lines and "individual responsibility" (high deductible plans). The Democrats, on the other hand, came out with full-throated support for the ACA in the early nights of the convention. First Lady Michelle Obama touted the importance of several provisions about children having the ability to see a doctor when they're sick or women being able to make decisions about their own health; speakers from Nancy Keenan of NARAL to Sandra Fluke spoke with passion about the importance of contraceptive and women's health services coverage in the ACA, and former President Bill Clinton explained the important differences between the two parties in the way they address Medicare and Medicaid in a clear and compelling way.

The current Secretary of Health and Human Services, Kathleen Sebelius hit hard on what Obamacare does for women, how it will protect Medicare and called it a "badge of honor." Other speakers such as the current Mayor of Chicago and former Obama Chief of Staff, Rahm Emmanuel, reminded the Convention of how tough it was politically for Obama to put his Presidency on the line for health care. Appealing to the youth vote, actor Kal Penn of "Harold and Kumar" fame, thanked Obama for giving his generation access to affordable health care.

Probably the single most moving tribute to the ACA came from Stacy Lihn, a woman whose baby daughter had been born with a severe heart defect, and whose story brought the convention to tears. She told about how her baby's surgeries had exhausted half of her lifetime benefit in her first year of life, but thanks to Obamacare and the ban on lifetime limits, they could now afford the third surgery the baby needs to survive. There were no similar moving stories from Republicans about how their plan would fix health care or save Medicare, unless you count the appearance of Paul Ryan's mother, a Medicare beneficiary, to reassure the over 65 crowd.

Although neither Vice President Joe Biden nor President Obama mentioned health care to any great degree in their acceptance speeches, it was clear from the convention that the Democrats are finally running ON the health reform achievements, not running AWAY from them.

In the next two months, the Democrats will make the Republican ticket's plan for Medicare and Medicaid reform a major attack point. Each side will attack the other for the $700 billion in projected "savings" in the Medicare plan -- Ryan's plan would use that amount for deficit reduction or perhaps defense; Obama's plan would use it to eliminate the doughnut hole, keep Medicare solvent, and help subsidize the ACA. The Republican plan for Medicare would turn it into what we call a "defined contribution" plan, meaning the government would define its responsibility to beneficiaries in specific dollar amounts. The Democrats would keep the current "defined benefit" approach, where the actual benefits or services are a promise. These two approaches are not too different from a guaranteed pension vs. a 401k account for which the market determines the value.

Probably the most under-reported and under-explained policy difference between the two parties is what each proposes to do with the program called "Medicaid". Medicaid often gets confused with Medicare, but they are very different programs. Medicaid is currently a program where funding is tied to "categories" of people in need -- single women with children; the disabled and blind; low income elderly and people in nursing homes. The federal government shares the cost of Medicaid with the states but has clear rules about what services must be covered. The ACA changes Medicaid in a major way, allowing income level to be an entry point for the program, not just the level of disability, and providing states with nearly full funding of this expansion. The Republicans propose to send the states a smaller bag of money to provide services through Medicaid and let them make major decisions about how to spend it.

Bill Clinton made the policy implications of cutting Medicaid and giving control to the states very clear:

PRESIDENT CLINTON: Now, folks, this is serious, because it gets worse. (Laughter.) And you won't be laughing when I finish telling you this. They also want to block-grant Medicaid, and cut it by a third over the coming 10 years. Of course, that's going to really hurt a lot of poor kids. But that's not all. Lot of folks don't know it, but nearly two-thirds of Medicaid is spent on nursing home care for Medicare seniors -- (applause) -- who are eligible for Medicaid.

Can the Congress do anything about health care in the next 60 days? Not likely. The House has voted 33 times to try defund or derail the implementation of the ACA, but the Senate, still under Democratic control, will resist any changes. Two House Ways and Means subcommittees will hold hearings on the role of the IRS in the implementation of the ACA in the next week. Instead of focusing on deficit reduction or jobs, they will spend their time in a mainly symbolic effort to keep the issue of the Obamacare alive with their supporters.

What can you do before the election? Learn about the issues here and here. Talk to your friends and help get out the vote for the candidates of your choice. My bias is clear. The Democrats are the only ones who have a specific plan to improve quality in health care, access to affordable coverage, and ultimately a way to control costs. The Republicans? Repeal. No real plan to replace.