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Republicans blasted Obama’s use of an obscure Medicare law. Now Trump’s using it on $200 drug coupons — and the GOP is silent

This post originally appeared on StatNews.

WASHINGTON — The last time a president used an obscure law to spend billions of Medicare dollars without congressional approval, Republican lawmakers called it a political ploy, a technicality, a way to write a “blank check” to help win an election. They launched investigations and issued subpoenas.

But that was when President Obama was in charge. Now, it’s President Trump who’s using the same little-known Medicare law for a maneuver that even some Republicans admit is more brazen than Obama’s attempt. And so far, Republicans are silent.

Trump’s plan is to ship seniors $200 prescription drug coupons in the coming weeks, a massive, $6.6 billion initiative that he announced less than six weeks before Election Day. He is relying on the same authority that Obama used in 2010 to bolster a more expensive, albeit less outwardly political, plan to direct bonus payments to high-performing insurance companies ahead of his own reelection campaign. Republicans were outraged, and ultimately, a government watchdog recommended the Obama administration kill the program. It did not.


Republican lawmakers’ silence on the administration’s use of the same authority highlights a fundamental hypocrisy in how GOP politicians treat Trump. Condemnation came swiftly from Republicans outside Congress and the administration and from congressional Democrats, too, all of whom viewed the action as a clear attempt to use taxpayer cash for political gain.

“It’s completely inappropriate: The timing of it reeks of a bribe to seniors before the election,” said Doug Holtz-Eakin, the president of the conservative American Action Forum and a former adviser to the late Sen. John McCain’s presidential campaign, said of Trump’s plan. “I see no reason to somehow pretend this is OK. It’s not OK.”


Eliot Fishman, an Obama-era Centers for Medicare and Medicaid Services official who now works at the progressive health care group Families USA, agreed. Republicans not calling out Trump’s latest move would be “worse than conventional partisan hypocrisy,” he argued, because of the move’s long-term constitutional implications.

“You’re essentially turning the Medicare program and any other program where there’s executive branch demonstration authority into an open slush fund that can be used to mail checks to key constituencies right before an election,” he said.

Democratic lawmakers, too, quickly cast Trump’s maneuvering as politically motivated: Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, referred to the move as a “taxpayer-funded bribe.” House Speaker Nancy Pelosi called it a “desperately transparent political gimmick.”

Even Trump, in announcing the giveaway during a Thursday address on health reform, acknowledged the move was political, telling a crowd in North Carolina: “Joe Biden won’t be doing this.”

The Trump administration has struggled to explain the policy. During a Friday morning call with reporters, Department of Health and Human Services officials said the plan was still being worked out, and that the White House would soon announce how the $200 coupons were being funded. The White House, however, had already explained: The program will rely on savings that the administration expects to generate from Trump’s separate “most favored nations” drug pricing proposal, which has not been implemented — effectively meaning that the money used to fund the coupons does not yet exist.

Numerous Republican lawmakers did not immediately respond to STAT’s repeated requests for comment, including the Finance Committee chairman, Sen. Chuck Grassley (Iowa), and Reps. Kevin Brady (Texas) and Greg Walden (Ore.), respectively the top Republicans on the Ways and Means and Energy and Commerce committees.

Both the Obama and Trump controversies surround so-called demonstration authority, a power granted to the White House to test whether changes to Medicare to make the program run smoother or save money.

Obama used that authority to change the bonuses for high-performing insurers that contract with Medicare. The plan, which was meant to test whether “stronger financial incentives and investments” would lead plans to offer better quality insurance coverage, would have doled out lucrative bonuses to 90% of private insurers.

Republicans saw it as an attempt to insulate seniors from spiking insurance premiums before an election. They argued that the Obama administration was robbing money from a different health program to prop up the Affordable Care Act and doling out the bonuses to make sure seniors didn’t feel the brunt of the cuts before the election.

“An honest way to come to the Congress is: Look, we screwed up, we would destroy Medicare Advantage if we didn’t bail it out, so we came up with a scheme to bail it out, that’s what you did,” said Rep. Darrell Issa (R-Calif.), who led the Republican investigation into the project.

The Obama administration pilot prompted Republicans to order a review by the Government Accountability Office, a federal watchdog program.

Both the GAO and lawmakers noted that the absence of a control group made it difficult to conduct an experiment to measure the program’s effectiveness. The GAO ultimately found that the Obama administration likely exceeded its authority and recommended the demonstration be canceled.

“There was clearly oversight following that demonstration,” said Jon Blum, the former Obama administration official hauled before Congress after the Obama demonstration. Blum added that he believed many of the criticisms waged at the Obama demonstration, like the lack of a control group, likely could plague the Trump ploy, too.

Trump’s plan is more brazen. It’s not clear how the Trump administration might test whether the payments had their intended goal if all seniors in Medicare are getting payments — or what the administration is planning to test at all.

“It doesn’t pass the simple test of logic,” Holtz-Eakin said. “I don’t see how you can send $200 to every senior and call it a demo. Doing it to everyone in the program is not a demo.”

Families USA’s Fishman called the move a “completely unprecedented” abuse of Medicare waiver authority.

Many of the Republicans lawmakers who used the GAO report to pounce on the Obama administration have since retired, like Issa and former Sen. Orrin Hatch of Utah, the chair of the Senate Finance Committee at the time.

This post originally appeared on StatNews.