Once a policy lightning rod that ended political careers, the Affordable Care Act (aka, “Obamacare”) has proven to be remarkably resilient with last month marking the 15th anniversary of its being signed into law. Lanhee Chen, the Hoover Institution’s David and Diane Steffy Fellow in American Public Policy Studies and co-chair of Hoover’s Healthcare Policy Working Group, explains how the ACA managed to survive despite power shifts in Washington, what areas of healthcare Congress should address in 2025, and California’s inability to cover the cost of its Medi-Cal program (the state equivalent of Medicaid) due to rising demand among seniors and undocumented residents.
Recorded on April 3, 2025.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
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[MUSIC]
>> Bill Whalen (00:04):
It's Thursday, April 3rd, 2025, and welcome back to Matters of
Policy and Politics, a Hoover Institutionpodcast devoted governance and
balance of power here in America andaround the globe.
I'm Bill Whalen.
I'm the Virginia Hobbs CarpenterDistinguished Policy Fellow in Journalism
here at the Hoover Institution.
I'll be moderating today's conversation.
I'm not the only Hoover fellowwho does podcasts though, and
I recommend you go to our website,which is hoover.org,
(00:27):
go to this link in particularhoover.org podcast.
There you'll find audio, podcast, videoseries, all kinds of stuff we're doing.
So today we're going to talk a bitabout an anniversary that went by
unnoticed in March.
And that was the 15th anniversary of thesigning of the Affordable Care Act, March
23, 2010, the actual date when BarackObama put pen to paper and signed the aca.
(00:48):
And well, it changed public policy andit also changed politics.
I remember that once he signed that bill,we thought, my goodness, how long
before a Republican president comes alongwith the Republican president Congress,
and they do away with Obamacare?
But here we are 15 years later andObamacare is quite alive and ticking.
What's also curious, the reason why Iwanted to do this podcast today is because
(01:09):
the Trump administration has beenin power for about 74-75 days.
Now, I believe haven't heardmuch about health care now,
maybe that's just a reflection ofDonald Trump is making news every day.
Elon Musk is in the news every day.
We're getting overwhelmed by doge andlayoffs in federal workforce, and
of course,today the world exploding over tariffs.
So maybe just not a lot of bandwidth forhealthcare.
But helping me make sense of this and
(01:30):
more matters on healthcare todayis my colleague Lanhee Chen.
Lanhee Chen is the David and Diane SteffeyFellow in American Public Policy Studies
here at the Hoover Institution.
He also co-chairsHoover's Health Care Policy Work Group.
Holani was also policy director for
the Romney Ryan presidentialcampaign back in 2012.
His job coming up with positionson matters like healthcare.
Lanhee Chen might be familiar to a lotof you in California because if you got
(01:53):
a ballot in 22 there he was onthe ballot as a candidate for
Republican state controller.
He holds a distinction of beingthe Republican candidate and
gets the most votes in America in 2022.
By the way, Lanhee, thanks forcoming on the podcast.
>> Lanhee Chen (02:04):
Hey Bill, great to be with you.
Thank you.
>> Bill Whalen (02:06):
So question for you, my friend.
Where were you in March of 2010?
>> Lanhee Chen (02:10):
March of 2010, I was working for a guy called Steve Poizner.
He was running for governor of California.
And that was before the primary election,when he lost.
I think the primary was in June.
So I was in Sacramento at the time.
>> Bill Whalen (02:25):
Okay, Steve Poizzner, by the way,
is an interesting trivia question.
The only Republican other thanArnold Schwarzenegger to win a statewide
office in California in the last,what, 30-35 years?
>> Lanhee Chen (02:35):
Yeah.
>> Bill Whalen (02:35):
2010, Lanhee, was quite a colorful year,
eventful year in American politics.
It began In January of 2010,you might recall,
when there was a specialelection in Massachusetts.
This was to replace Ted Kennedy,who had passed away.
And the election produced a shockerin that the Republican candidate,
Scott Brown, won that election.
I went back anddid some sleuthing, Lanhee.
I looked at the exit polls.
(02:57):
52% of Massachusetts voters said theyopposed the idea of ACA at the time.
It had not been signed yetby Obama, not for a couple months.
42% of voters who voted forBrown said they voted for him for
that express purpose,to make sure that ACA never happened.
Then, of course, Obamacare happens.
We have an election in 2010.
It's a wipeout for Democrats.
63 House Democrats are tossed out.
(03:17):
Lanhee, including, I quoted one studyI saw by para-political scientists.
Thirteen House Democrats lost theirjobs due to their vote on Obamacare.
We continue on with this.
I was looking at NBC Wall Street Journalpolls, for example,
the Affordable Care actunderwater from 2010 to.
And then in 2017, something kindof interesting happens, Lonhi.
(03:38):
It suddenly becomes a lot more popular,and
maybe that coincides withDonald Trump coming to office.
Here's my question to you, Lanhee.
Once Obamacare was signed into law,was it always going to be here?
Or did Obamacare get a new lease onlife on July 27, 2017, when John McCain
came back to Washington and famouslycast the no vote on the skiddy reform.
>> Lanhee Chen (04:00):
I think the reality, Bill,
is that the longer a piece of publicpolicy, particularly one that has been
through the legislative process inthe way that the Affordable Care act was,
the longer you have a law in place,the harder it is to get rid of it.
I mean, that's just the reality.
So to the degree that there wasan opportunity to repeal the law,
it would have been, you know, right around2012, when I was working, as you noted,
(04:23):
as the policy director of the Rodney Ryancampaign, I mean, one of the things that
we spent a lot of time on was, you know,what was the mechanism to effectuate
repeal of the law andwhat would have a replacement looked like.
More importantly, what elementsof the law needed to be fixed,
fixed, which ones neededto be completely replaced.
And that was a lot of hard work witha lot of people went into that,
(04:44):
many of whom have gone on to servein a Republican administration.
Some of them are servingin government now.
So it, I think the opportunitywould have been there.
But once you got to 2017 andonce became as polarized as it did right.
The likelihood that anything was going tohappen to it in a really substantial way I
think was pretty small.
And then the other issue,of course you run into is that over time,
(05:07):
people get used to it.
They get used to the elements of it.
There are things about it thatbecome politically more salient.
For example,
the restriction the law puts on denyingcoverage based on pre-existing conditions.
That was the core centerof the debate in 2017.
People didn't wanna get rid of that,right?
So the law, once it's there for a whileis popular and then elements of it become
(05:29):
even more popular andit turns the popularity of the whole law.
Where if you were to look at surveyresearch today, you would find that,
you know, about 60 or65% of Americans like the ACA,
here we are 15 years down the road andthe public opinion on it has
essentially completely flipped fromfrom when it was first passed.
>> Bill Whalen (05:47):
So I'm gonna read you a quote, Lanhee,
from what Donald Trump said in his loandebate with Kamala Harris last year,
quote, Obamacare was lousy health care,always was.
It's not very good today.
And what I said, that if we come up withsomething and we are working on things,
we're going to do it andwe're going to replace it.
Now let's fast forward to him beingback in Office as a 47th president.
He has done something on health care.
He signed an executive order dealingwith health care pricing transparency.
(06:11):
And it does relate toObamacare in this regard.
It messes with the enrollment period forObamacare,
takes it back by a month instead offrom November 1st to December 15th.
It's now November 1st, December 15thinstead of the January 15th deadline.
So he's tinkered with it.
But boy, that's not repeal orreplace, is it?
>> Lanhee Chen (06:30):
Yeah, I mean, I think it speaks to the reality of how hard it is to
do anything really fundamental to the law.
I mean, I think the administration isgoing to do some things that are helpful
to the health care system, like forexample, promoting more transparency
around pricing, which is somethingthey did in the first term.
Again, not directly related to Obamacare,but I think good for
(06:52):
the healthcare system.
But the likelihood that they'llbe able to really kind of do much
about changing the arc of the law,you know, pretty low likelihood.
And again,
it gets back to how hard it is to changesomething as entrenched as the ACA.
Right.
>> Bill Whalen (07:10):
Let's talk about what Washington can be doing on healthcare.
Lanhee, actually, first,let me ask you this question.
So you're doing Americanpublic policy studies.
That's a pretty big umbrella.
How did you end up with healthcare reform?
>> Lanhee Chen (07:21):
Well, a lot of my initial policy work when I first started in public
policy was in healthcare, andpart of it was influenced by my dad,
who's a medical doctor.
And so I had a lot of exposure to thehealth care system when I was younger, and
you had an interest in it.
It's a pretty complicated area of policy.
I mean, I think all public policyhas its own, you know, little,
(07:44):
little twists and turns.
But I think health carehas a complexity to it.
And I really took to that whenI first did policy work and
then when I served in governmentduring the Bush administration.
George W Bush administration,that's the agency I worked in,
the Department of Health andHuman services.
So got a view in government,got a view outside of government.
And so for me at least, it's just been anarea of policy that I find fascinating and
(08:08):
I've spent a lot of time andenergy over the years focused on it.
So that's the story.
>> Bill Whalen (08:15):
So you wrote a column recently with your colleagues Tom Church
and Danny Hile, the title which 15 yearslater, the ACA has an HSA problem and
you can explain HSA to hisHealth Savings Accounts.
It's interesting.
So you mentioned the polling on Obamacare,Lanhi.
It's about a 6040 split.
62, 37 or so.
It drops a couple points if youcall it Obamacare instead of ECA.
(08:36):
But it's more popular than it's unpopular.
But yetthere's a question of product demand.
And what you point outin the column is this.
You note that the Congressional BudgetOffice back in 2010 predicted that there'd
be 24 million Americans buyinginsurance on exchanges by 2019.
But if you look at the actual numbers,it turns out to be 10.6 million.
You also predict enrollmentwill be declining this year.
(08:56):
So if the product is popular a lot here,
why don't we see it reflected inthe numbers of people signing up?
>> Lanhee Chen (09:01):
Well, because I, I think fundamentally the product that's being
offered is not a great fit forwhat people want.
People want to be able to choosea healthcare coverage product
that makes sense for their lives,that is adaptable, that's flexible,
not one that's relatively rigid.
Generally speaking, fairly fulsomein benefits and pretty high in cost.
(09:23):
Right.And I think that's the explanation.
If you look at the coverage gains thathave come through the Affordable Care act
over the last 15 years, the vast,vast majority, by some measure over 80% of
the coverage gains have not comefrom private health insurance.
They've come from an expansionof a program called Medicaid,
which in California we call Medi Cal.
But fundamentally what Medicaid is, isit's coverage for lower income Americans.
(09:47):
This is government run coverage.
And there's been research about whethercoverage under Medicaid is any more
effective or efficient at promoting healthoutcomes than having no insurance at all.
Now, I think it's hard to make that case,but
the reality is that Medicaid is a programthat is riddled with a lot of challenges.
(10:08):
And so the, the idea you're speakingabout, which is private health insurance
offered through marketplaces, which wasdefinitely a part of the Affordable Care
act, it hasn't been as popular as I thinkthe Congressional Budget Office originally
thought it would be or people whooriginally advocated for the law thought
it would be because the insuranceoffered through it is expensive and
it doesn't fit what most people want.
(10:31):
And so part of the answer there is canwe create a system that offers a little
bit more choice, a little bit morevariance in terms of pricing so
that people can get access to plansthat maybe suit them better at a price
that works andis free of some of the bells and
whistles that a lot of these planshave on the Obamacare marketplaces?
(10:51):
I think that's reallythe fundamental issue.
>> Bill Whalen (10:54):
Let's look at three matters being discussed right now, Lanhee,
and you tell me what the significance is.
The first one how does health care relateto the upcoming conversation on tax
reform?
>> Lanhee Chen (11:05):
Well, it's a significant relationship because a lot of what drives
health care policy is tax policy.
The single biggest element of why we havethe health care system we have is because
of a provision in the tax code that saysthat if you get your health insurance
through your employer, that insurance as abenefit is not taxable to the employee and
(11:26):
is a write off is a tax deduction forthe employer.
And so that interpretationof the tax code drives so
much of not just tax policy, buthealth care policy in this country.
So when we have a discussionaround health care reform,
it's going to be a conversationaround tax reform and vice versa.
(11:47):
So very close relationship.
When they look at changes to the tax code,
there will almost certainly have to beimpacts on, on health care in some way.
Health care is 20% of the economy, it'shighly unlikely that you wouldn't find
the tax code change to impacthealth care in the country.
>> Bill Whalen (12:03):
We're talking about they as in Congress, but are you looking at
a he or she, long he, someone like a BillCassidy who's gonna be leading this?
>> Lanhee Chen (12:09):
Yeah, I mean, this is a process that's going to be driven by
members of Congress in the majority party.
In the House, it's Republicans.
In the Senate,it's the Republicans, so yes,
Senator Bill Cassidy of Louisiana isa great leader on healthcare issues,
a guy who knows a ton about theseissues and, and cares deeply.
On the, on the House side, you're going tohave Jason Smith, who's the, the chair of
the House Ways and Means Committee,the principal tax writing committee there.
(12:32):
They're going to be very,very engaged as well.
So it is going to be a conversation forcongressional leaders as they figure out
how to put together as President Trumpsays, one big beautiful bill.
And when he talks about that,
part of that is whether thesetax changes go into that bill.
Now, there's some skepticism about whetherthe one bill can contain all of this
stuff, but we're going to see somesignificant legislative activity as we get
(12:56):
into the summer andfall months of this year.
>> Bill Whalen (12:59):
Okay, item number two, Lanhee, Medicare, Medicare expenditures in
particular, copying from your column, 2.2%of GDP in 2000, Medicare expenditures,
3.7% in 2023, projections showingit going up to 5% by 2034.
Now, when we talk Medicare andentitlements,
Washington likes to kick the candown the road, doesn't it?
>> Lanhee Chen (13:20):
Yeah. And the reason why we're seeing a higher
percentage of GDP spendaround Medicare is twofold.
One is we have more and more people whoqualify for Medicare because we have
an aging population and a lot of theboomers are retiring and of Medicare age.
But the second reason is because healthcare is becoming ever more expensive.
So if you look at health care inflation,those percentages tend
to outpace core inflation orinflation, other parts of the economy.
(13:43):
And so health care expenses are rising,consumption is rising, and as a result,
total Medicare expenditures are rising.
And that's a trend that wedon't see abating anytime soon.
So the question will be when policymakersdecide they want to make Medicare more
fiscally sustainable.
And as you know, politically,I think that's a very challenging topic.
>> Bill Whalen (14:04):
Okay, and item number three, Lanhee, Telehealth expansions.
Now, I don't know much about telehealth,but
I do know it has to dowith distance health.
So I start thinking red states.
>> Lanhee Chen (14:14):
Well, it's great for
rural areas where you don't have accessto ready access to healthcare facilities.
But telehealth essentially isgetting access to healthcare,
whether a doctor, registered nurse,
whoever can help diagnose a healthcondition via technology.
Right.Whether it's a mobile phone or
a Zoom call, whatever it might be andthat's something that really
(14:35):
was a big element of healthcareduring the pandemic and right after,
when people weren't engagingin as much in-person activity.
>> Bill Whalen (14:43):
Right.
>> Lanhee Chen (14:44):
And for some Americans, that access is really, really important.
And so we want to figure out ways tocontinue to incentivize the adoption and
continuation of telehealth.
And those authorities, some of thosewhich were originally created during
the pandemic, have lapsed or will lapse.
And so we want to create a permanentway of getting access to health care
(15:04):
in that way.
>> Bill Whalen (15:05):
What did Covid teach us, Lonnie, about both the promise and
challenges in doing telehealth?
>> Lanhee Chen (15:10):
Well, the promise is access.
You get people who are able to seea doctor usually much more quickly, and
they don't have to travel hoursin some cases to see a doctor.
Now, the restriction,the challenge is that there's only so
much we can do remotely, right?
I mean, there's only so much diagnosis wecan do without actually, in some cases,
having physical access to a patient, beingable to draw blood, being able to take
(15:32):
specimens, things that are needed todiagnose disorders, diseases, conditions.
It's very hard to do all of it.
I think there are certain kinds of healthcare that are well suited to telehealth.
Certain dermatological conditions,mental health, behavioral health issues.
Those are things that I think can behandled reasonably well via telehealth.
(15:53):
But it's not for everything.
And so we have to continue to be mindfulof the fact that we need a system that
allows for broad access andpeople to be able to seek care,
notwithstanding the fact that theymay live some distance from a doctor.
>> Bill Whalen (16:06):
So health care reform was discussed by Congress last year.
It was formerly the 482 pageBipartisan Health Care Act.
It included telehealth extensionsas you've been talking about.
It included pharmacybenefit manager reform.
It addressed the opioid crisis.
It didn't go anywhere, Lanhee.
And this is what has me curiousabout healthcare reform in Congress.
(16:27):
2024 is election year, so maybe it justdied because of election year politics.
2026 will be an election year.
2027 if the Democrats pick up the Houseas a divided Congress so it becomes all
the more problematic then you're the 2028into the presidential election year.
So does that kinda make us some regards2025 as kind of a year by default to get
(16:47):
things done?
>> Lanhee Chen (16:48):
Yeah, I mean I do think if we're going to accomplish anything on
health care,it's going to have to be this year.
It's probably gonna be part of the oneof a couple of legislative packages
we see this year.
Highly, highly unlikely that ithappens in an election year.
A, because it's complex but B,
I think a lot of members of Congressdon't like to deal with health care.
I think, their view is look, we didObamacare, we did a couple of other big
(17:11):
pieces of health care legislationover the last 15 years.
Why, why do we need to revisit this again?
Right.And so
every year there are a few healthcare provisions that have to get
dealt with because if they don't, doctorsdon't get paid and things don't happen.
So we deal with those.
But aside from that,the reality is that there's not
a tremendous amount of demandamongst members of Congress or
(17:32):
frankly amongst presidentsto deal with these issues.
So I think your assessmentof the calendar is right.
This is going to be the year to getthings done and we'll see if it happens.
>> Bill Whalen (17:42):
All right, let's shift for a moment to California.
Now let's talk about what'sgoing on in Sacramento.
It has a real budgetproblem with Medi-Cal.
California is the first state to offergovernment health care to all low
income people.
Medi-Cal is the state version of Medicaid.
It's the first to offer, as I mentioned,
healthcare to low income peopleregardless of immigrant status.
About 1.5 million immigrants without legalstatus are enrolled now in Medi Cal but
(18:06):
California cannot afford it right now.
You've also seen, Lanhee,a spike in seniors applying to Medi-Cal,
about a 40% increase.
And you referenced thisearlier in terms of the cost.
I looked up the numbers here.
It costs California on averageabout $15,000 per senior
enrolled in Medi-Cal versusabout 8,000 for non-seniors.
So what's Sacramento going to do here,Lonnie?
(18:27):
Because you have the fiscal realityof having to balance a budget.
California has to balance a budget,unlike Washington.
Now, we can get into smoke and mirrors ifyou want to, but you also have a governor
with presidential ambitions who has beenin the last month or so trying to show
a little leg, suggesting that maybe he'sa little more moderate than you think.
And you have this hot button issue ofundocumented Californians getting public
(18:48):
benefits.
So your thoughts on howthis gets resolved?
>> Lanhee Chen (18:51):
Well, it's the same way it gets resolved every year, which is that
they end up kind of reducing the amountthat they pay physicians to see patients.
And so if you look at the broad spectrumof how healthcare providers get paid,
if they see a patient throughcommercial insurance, you know,
the insurance you getthrough your employer,
(19:11):
let's assume for a moment thatthe provider gets paid a dollar.
If they're seeing a Medicaid patient,Medicare patient, excuse me,
this is the old age program.
They're seeing a Medicare patient,maybe they're getting $0.70 or $0.80.
>> Bill Whalen (19:24):
Right. >> Lanhee Chen
seeing a Medicaid patient, they'reprobably getting a quarter or less.
Right. >> Lanhee Chen
what traditionally has happened is asMedicaid budgets have been strained at
the state level, they've compressed downand they essentially pay providers less.
And the way that they deal with this isthey crunch down on providers every year.
So what happens?
Predictably, providers say, I'm notgonna see Medicaid patients anymore.
(19:47):
And then you end up with a,
with a real supply problem on healthcare in the Medicaid program.
So there are other things states will do.
Like they'll restrict access to certainprescription drugs they think are too
expensive or certain therapiesthey think are too expensive.
But regardless, what it results in is itresults in some form of rationing of care.
(20:08):
We don't call it rationing,that's not popular in America.
But that's what it is, right?
Care is rationed because the supplyof health care is constrained.
And that's fundamentally what happens.
And that's the only way thatthe math works when it comes to
the Medicaid program.
There's something else Sacramento could do,
Lanhee, they could write to Washingtonsaying, please send us money.
>> Lanhee Chen (20:28):
Well, And Washington sends California a lot of money.
>> Bill Whalen (20:31):
Right, send us more.
>> Lanhee Chen (20:33):
I mean, one of the deals with the Affordable Care act
was that the population that gothealth care through the Medicaid
expansion contained within Obamacare.
>> Bill Whalen (20:42):
Right. >> Lanhee Chen
reimbursed at over 90% ofthe cost the state puts out.
So the state's putting out a verysmall percentage of reimbursement for
that population,the traditional population,
which is a little bit cheaper tocover because it's primarily kids.
And kids tend to be cheaperto cover that population.
They're probably getting, I don't know,somewhere around 60 cents, maybe between
(21:05):
50 and 60 cents from the federalgovernment for every dollar they spend.
So, yeah, I mean,the feds could send more, but
the feds are fiscally constrained as well.
So the notion that they can look toWashington is kind of, kind of ludicrous.
A, because Washington's alreadysending plenty of money, and
if they were going to send more,every state would want more, and
we wouldn't have enough money to pay foreverything else.
Well, the reality of Republican Congress is going to send
(21:27):
California $3 billion becauseCalifornia underestimated the number
of undocuments who signed up for Medicaid.
Yeah, just not going to happen.
Pretty unlikely.
Robert F Kennedy, Jr. do you know him?
Have you met him?
>> Lanhee Chen (21:40):
Yeah, I mean, look I think he is a different,
a very different model of AL Secretary.
And I've known.
>> Bill Whalen (21:48):
I'm glad you mentioned that.
I went back and actually looked up.
So if you go back to the historyof HHS and then HEW.
Before that, you're talking about 70years of secretaries or about 26 of them.
I think there's nothing closeto Robert F Kennedy, Jr.
>> Lanhee Chen (22:02):
I mean and
I was gonna say, I've known a numberof HHS secretaries pretty well.
I served one under one.
And so it's a different model, butas it's a different kind of presidency,
it's a different kind of administration.
And if you look at the work they're doing,for example, to consolidate some elements
of the agency, yeah,I think some of that work is overdue.
(22:23):
I do think some of thatconsolidation is good.
Some will be disruptive,there's no question about that.
But overall,
it's a very different way of understandingthe role of the health secretary.
I'll give you one example, which isthe focus on food and on the impact
of food on our health and our abilityto remain healthy as a society.
(22:44):
That is something that previoussecretaries haven't spent as much time on,
quite frankly, as RFK has and will.
And so, as I see it, I don't wantto argue whether it's good or bad.
I'll just say that it'sa very different model.
And this administration is gonnado business very differently,
whether it's an economic policy orcertainly in healthcare policy.
>> Bill Whalen (23:04):
Right, it's an enormous challenge.
I mean, it's a enormous,enormous bureaucracy he's taking over.
>> Lanhee Chen (23:10):
It's 80,000 people.
>> Bill Whalen (23:11):
Right. >> Lanhee Chen
big agency.
A lot of responsibilities and, anda lot of different things going on,
some of which is very critical,some of which we'll see.
But he's made the decision that a lotof that needs to be consolidated down.
And, he may be right,he may be wrong, but time will tell.
Right.
(23:32):
What do you think he'sgoing to do on vaccines?
>> Lanhee Chen (23:34):
I don't know.
There's sort of two very differentways of thinking coming out of it.
I mean, there certainly he hasexpressed a measure of skepticism.
I think the way the agency hasapproached it is in a much more
skeptical fashion thanprevious administrations.
In some ways, the activity of your vaccineapproval and drug approval is moving as.
(24:00):
Has been the case inprevious administrations.
In others,I think there is a little more skepticism.
And so how much of that works its wayinto what actually gets approved,
what actually the marketplace tolerates,what people are going to do?
Again, time will tell.
But his attitude and his mindsetis we want, you know, we want the.
The science to be rigorous, and
(24:20):
we want to make sure that we'remaking decisions based on that.
And for some people, that's going toresult in outcomes that they don't like,
and I think they're willing toaccept the blowback for that.
>> Bill Whalen (24:31):
It would seem to me he's benefited from having Elon Musk in
Washington as well.
Must get so much attention that there'sbeen relatively less attention so
far directed toward RFK.
Now, he's been in the news from timeto time, but, boy, it's Doge, Doge,
Doge every day.
>> Lanhee Chen (24:44):
Yeah.
>> Bill Whalen (24:45):
So disruptors going into town.
So you've run for office, you'vethought about serving in public office.
Your thoughts on disruptors gettinginvolved in federal and state government?
For example, look at California.
Could California benefit from a Doge andsomeone like Musk coming into Sacramento?
>> Lanhee Chen (24:58):
And, I mean, I think California could definitely benefit from
someone taking a very criticallook at how we're spending money.
I mean, that's one of the reasons Iran for controller was because I felt
that there wasn't someone takinga very critical eye toward.
It wasn't so much.
I mean, yes, we spent a lot of money,but it wasn't so much the amount,
(25:18):
although that's an issue,was how effective that spend was.
And that's what bothered me.
It felt like when you talk to policymakersin Sacramento and you'd say, like,
hey, are we solving this problem?
They'd be like, yeah, of course.
Look at all this money we're spending.
And they never stopped toask the question, like,
is the money actually working?
And so, to me, it's about.
(25:38):
I want to divorce it from the Dogeconversation for a moment,
because I think Doge hasbecome very polarized.
I think the reality is that we haven'tspent a ton of time really getting into
the nitty gritty of is our spending reallygoing to what we say it's going to,
and is it effective in the waythat it needs to be effective to
solve the problems Californians have.
>> Bill Whalen (25:59):
Right. >> Lanhee Chen
we need some form ofexamination in California.
We have a bunch of different officialswho could be engaging in that activity
already, but politically,it doesn't serve their Interest to.
So they don't.
The controller who did get elected,I don't think she particularly cares.
My sense is she hasn't really spent muchtime thinking about these issues either.
(26:19):
Maybe busy trying to figureout what job she wants next.
And, that's the reality ofpolitics in Sacramento.
Well, she's never in the news.
But, with Musk, it's interesting becausehe comes from a tech culture, and
tech does things in terms of hours,days, weeks, sometimes months.
But government, as we know,doesn't do things about government,
does things in terms of years.
(26:40):
So it's fascinating to me to watchthat clash of the Musk culture versus
the federal culture.
>> Lanhee Chen (26:44):
Yeah. But I think that's
part of the issue with government.
Right.Is that it does move so slowly.
It's tough for change to happen sometimesbecause once you try to change something,
it's no longer current.
And, and this is part of the debatewe can have about Trump and Musk.
And what they're doing is whetherthey're doing is good or bad.
I think the reality is that you're notgoing to be able to make significant
(27:07):
change by moving incrementally, and
they're moving quickly andthey're going to make mistakes.
They have made mistakes, I think.
But there's also ways in which thosechanges wouldn't happen if they didn't
move in the manner in which they've moved.
So it's a little bit of a toughdichotomy because on the one hand,
you are going to make mistakes and
there are going to be things that aregoing to happen that people don't like.
(27:30):
But you wouldn't have had the changespeople did like if you didn't
have the ones they didn't.
So, this is the problem.
>> Bill Whalen (27:36):
Okay, so tell me what the Healthcare Policy Working Group is
coming up.
>> Lanhee Chen (27:40):
Well, we just had a great conference about a month ago where
we brought,
some of the leading thinkers in healthcarepolicy to the Hooper Institution and
sat for two days andtalked about all these different issues.
We talked about Bill, the tax code and,private health insurance, about Medicare,
Medicaid, drug approval,really important topics in health care.
And our goal is to continue writing andresearching and connecting the academic
(28:02):
and analytical work that's being done inhealthcare with policymakers in a way that
they can understand and use and deployto actually make better public policy.
And that's really the secret sauce of whatwe're doing with the working group is
providing that linkage betweenthe research and the thinking and action.
Because I think a lot oftimes in healthcare, and
(28:24):
this is true in a lot of policy,you have a lot of good thinking and
research and stuff that's being written,and then you have the policymakers,
and it's not clear that thatconnection is always made.
And so we want to make sure thatwe're drawing the connection and
providing that connective tissue andhelping people understand,
helping policymakers understand inparticular, how it is that the research
that's being done about the health caresystem can impact how they do their work.
(28:48):
And we feel very strongly thatthere's a need for that, and
we're excited about the opportunity.
>> Bill Whalen (28:54):
Right, and finally we've talked a lot about healthcare reform at
the federal level.
We haven't talked much about the states,though.
So is there anything worth lookingat in terms of Austin, Tallahassee,
innovative states?
>> Lanhee Chen (29:03):
A lot, I mean, look, I think, Bill, so much of the important
work of healthcare reform,because the Federal Government is so
intractable in a lot of ways,it is gonna happen at the state level.
And whether that's innovative programs tocover more people, ways of reducing cost,
increasing transparency, bringingtogether the public and private sector.
So many states have done interesting work.
Georgia is doing a tonof interesting work.
(29:25):
They have a program called Georgia Accessthat's designed to make a healthier
marketplace so
that people can get access to healthcareplans that make sense for them.
You look at a state like Alaska that'sdone a lot of work at figuring out how
they can make insurance more affordablefor populations who are tough to insure.
You look at other states like Idaho andUtah, Texas, as you mentioned, Florida.
(29:47):
All these states are doing some reallyinteresting work across a whole host of
healthcare areas.
And by the way, not all red states.
You've got some blue states thatare experimenting with different health
care plans.
Some of it I agree, with,some of it I don't.
But, that's the beauty of a federalistsystem, is that you have states that can
experiment and the good ideas succeed andthe bad ideas fail.
And that's what our system is for.
>> Bill Whalen (30:09):
Okay, final note, any conversation Lanhee Chen has to include
his incredible love forthe Los Angeles Dodgers.
As long as I've known him,he's been a Dodgers fan,
he has not jumped on the bandwagon.
I'm confused, Lanhee,I should hate the Dodgers?
They're from Los Angeles,you gotta hate Los Angeles.
They've spent a lot of money to bringin a lot of talent and they win.
They're what, eight?
No, as we go into this podcast right now.
(30:30):
But my God, it's a fun team to watch.
I'm having a hard time disliking them.
>> Lanhee Chen (30:34):
Yeah, it's very entertaining.
And the ways in which they'rewinning games, I mean,
the last couple of games they'vewon by coming from behind.
The most recent game was a,was a walk off home run by Shohei Ohtani.
And it's a fun team to watch.
There's so many personalities andfundamentally good people led by a strong
manager who I think is a good guy at core,Dave Roberts.
(30:54):
So it's a great team, it's the kindof golden age of Dodger baseball.
I'm really excited to get to shareit with my family and my friends and
we'll see how long it lasts, right?
No dynasty lasts forever.
It's not really a dynasty yet,they've won one championship.
But hopefully it can be a dynasty.
And it's a great time to be a Dodger fan,for sure.
>> Bill Whalen (31:11):
Well, like you, I'm always getting asked questions by reporters.
Point me to something in Californiathat works and I have to point them
to the Dodgers because it's just anincredible business model they produced.
>> Lanhee Chen (31:20):
Yeah, no, you're right, it is.
And it's always, it's fun to watch forthose of us who are fans.
And I'm glad to hear it's fun to watch forpeople who aren't fans as well.
>> Bill Whalen (31:28):
Yeah, okay.
Lahnee, enjoyed the conversation.
Thanks for doing this.
>> Lanhee Chen (31:31):
Thanks, Bill.
>> Bill Whalen (31:32):
You've been listening to Matters of policy and Politics,
a Hoover Institution podcastdevoted to governance,
balance of power here in America andaround the globe.
If you've been enjoying this podcast,please don't forget to rate, review and
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And if you wouldn't mind, spread the word.
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His X account is @LanheeChen,that is spelled L-A-N-H-E-E-C-H-E-N.
The Hoover Institution is also on X.
(31:54):
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And we'll be back soon with a newinstallment of Matters of Policy
and Politics.
Until then, take care.
(32:14):
Thanks for listening andwe will see you soon.
Bye Bye.
>> Presenter (32:18):
This podcast is a production of the Hoover Institution,
where we generate andpromote ideas, advancing freedom.
For more information about our work,to hear more of our podcasts or
view our video content,please visit hoover.org.
[MUSIC]
>> Bill Whalen (00:04):
It's Thursday, April 3rd, 2025, and welcome back to Matters of
Policy and Politics, a Hoover Institutionpodcast devoted governance and
balance of power here in America andaround the globe.
I'm Bill Whalen.
I'm the Virginia Hobbs CarpenterDistinguished Policy Fellow in Journalism
here at the Hoover Institution.
I'll be moderating today's conversation.
I'm not the only Hoover fellowwho does podcasts though, and
I recommend you go to our website,which is hoover.org,
(00:27):
go to this link in particularhoover.org podcast.
There you'll find audio, podcast, videoseries, all kinds of stuff we're doing.
So today we're going to talk a bitabout an anniversary that went by
unnoticed in March.
And that was the 15th anniversary of thesigning of the Affordable Care Act, March
23, 2010, the actual date when BarackObama put pen to paper and signed the aca.
(00:48):
And well, it changed public policy andit also changed politics.
I remember that once he signed that bill,we thought, my goodness, how long
before a Republican president comes alongwith the Republican president Congress,
and they do away with Obamacare?
But here we are 15 years later andObamacare is quite alive and ticking.
What's also curious, the reason why Iwanted to do this podcast today is because
(01:09):
the Trump administration has beenin power for about 74-75 days.
Now, I believe haven't heardmuch about health care now,
maybe that's just a reflection ofDonald Trump is making news every day.
Elon Musk is in the news every day.
We're getting overwhelmed by doge andlayoffs in federal workforce, and
of course,today the world exploding over tariffs.
So maybe just not a lot of bandwidth forhealthcare.
But helping me make sense of this and
(01:30):
more matters on healthcare todayis my colleague Lanhee Chen.
Lanhee Chen is the David and Diane SteffeyFellow in American Public Policy Studies
here at the Hoover Institution.
He also co-chairsHoover's Health Care Policy Work Group.
Holani was also policy director for
the Romney Ryan presidentialcampaign back in 2012.
His job coming up with positionson matters like healthcare.
Lanhee Chen might be familiar to a lotof you in California because if you got
(01:53):
a ballot in 22 there he was onthe ballot as a candidate for
Republican state controller.
He holds a distinction of beingthe Republican candidate and
gets the most votes in America in 2022.
By the way, Lanhee, thanks forcoming on the podcast.
>> Lanhee Chen (02:04):
Hey Bill, great to be with you.
Thank you.
>> Bill Whalen (02:06):
So question for you, my friend.
Where were you in March of 2010?
>> Lanhee Chen (02:10):
March of 2010, I was working for a guy called Steve Poizner.
He was running for governor of California.
And that was before the primary election,when he lost.
I think the primary was in June.
So I was in Sacramento at the time.
>> Bill Whalen (02:25):
Okay, Steve Poizzner, by the way,
is an interesting trivia question.
The only Republican other thanArnold Schwarzenegger to win a statewide
office in California in the last,what, 30-35 years?
>> Lanhee Chen (02:35):
Yeah.
>> Bill Whalen (02:35):
2010, Lanhee, was quite a colorful year,
eventful year in American politics.
It began In January of 2010,you might recall,
when there was a specialelection in Massachusetts.
This was to replace Ted Kennedy,who had passed away.
And the election produced a shockerin that the Republican candidate,
Scott Brown, won that election.
I went back anddid some sleuthing, Lanhee.
I looked at the exit polls.
(02:57):
52% of Massachusetts voters said theyopposed the idea of ACA at the time.
It had not been signed yetby Obama, not for a couple months.
42% of voters who voted forBrown said they voted for him for
that express purpose,to make sure that ACA never happened.
Then, of course, Obamacare happens.
We have an election in 2010.
It's a wipeout for Democrats.
63 House Democrats are tossed out.
(03:17):
Lanhee, including, I quoted one studyI saw by para-political scientists.
Thirteen House Democrats lost theirjobs due to their vote on Obamacare.
We continue on with this.
I was looking at NBC Wall Street Journalpolls, for example,
the Affordable Care actunderwater from 2010 to.
And then in 2017, something kindof interesting happens, Lonhi.
(03:38):
It suddenly becomes a lot more popular,and
maybe that coincides withDonald Trump coming to office.
Here's my question to you, Lanhee.
Once Obamacare was signed into law,was it always going to be here?
Or did Obamacare get a new lease onlife on July 27, 2017, when John McCain
came back to Washington and famouslycast the no vote on the skiddy reform.
>> Lanhee Chen (04:00):
I think the reality, Bill,
is that the longer a piece of publicpolicy, particularly one that has been
through the legislative process inthe way that the Affordable Care act was,
the longer you have a law in place,the harder it is to get rid of it.
I mean, that's just the reality.
So to the degree that there wasan opportunity to repeal the law,
it would have been, you know, right around2012, when I was working, as you noted,
(04:23):
as the policy director of the Rodney Ryancampaign, I mean, one of the things that
we spent a lot of time on was, you know,what was the mechanism to effectuate
repeal of the law andwhat would have a replacement looked like.
More importantly, what elementsof the law needed to be fixed,
fixed, which ones neededto be completely replaced.
And that was a lot of hard work witha lot of people went into that,
(04:44):
many of whom have gone on to servein a Republican administration.
Some of them are servingin government now.
So it, I think the opportunitywould have been there.
But once you got to 2017 andonce became as polarized as it did right.
The likelihood that anything was going tohappen to it in a really substantial way I
think was pretty small.
And then the other issue,of course you run into is that over time,
(05:07):
people get used to it.
They get used to the elements of it.
There are things about it thatbecome politically more salient.
For example,
the restriction the law puts on denyingcoverage based on pre-existing conditions.
That was the core centerof the debate in 2017.
People didn't wanna get rid of that,right?
So the law, once it's there for a whileis popular and then elements of it become
(05:29):
even more popular andit turns the popularity of the whole law.
Where if you were to look at surveyresearch today, you would find that,
you know, about 60 or65% of Americans like the ACA,
here we are 15 years down the road andthe public opinion on it has
essentially completely flipped fromfrom when it was first passed.
>> Bill Whalen (05:47):
So I'm gonna read you a quote, Lanhee,
from what Donald Trump said in his loandebate with Kamala Harris last year,
quote, Obamacare was lousy health care,always was.
It's not very good today.
And what I said, that if we come up withsomething and we are working on things,
we're going to do it andwe're going to replace it.
Now let's fast forward to him beingback in Office as a 47th president.
He has done something on health care.
He signed an executive order dealingwith health care pricing transparency.
(06:11):
And it does relate toObamacare in this regard.
It messes with the enrollment period forObamacare,
takes it back by a month instead offrom November 1st to December 15th.
It's now November 1st, December 15thinstead of the January 15th deadline.
So he's tinkered with it.
But boy, that's not repeal orreplace, is it?
>> Lanhee Chen (06:30):
Yeah, I mean, I think it speaks to the reality of how hard it is to
do anything really fundamental to the law.
I mean, I think the administration isgoing to do some things that are helpful
to the health care system, like forexample, promoting more transparency
around pricing, which is somethingthey did in the first term.
Again, not directly related to Obamacare,but I think good for
(06:52):
the healthcare system.
But the likelihood that they'llbe able to really kind of do much
about changing the arc of the law,you know, pretty low likelihood.
And again,
it gets back to how hard it is to changesomething as entrenched as the ACA.
Right.
>> Bill Whalen (07:10):
Let's talk about what Washington can be doing on healthcare.
Lanhee, actually, first,let me ask you this question.
So you're doing Americanpublic policy studies.
That's a pretty big umbrella.
How did you end up with healthcare reform?
>> Lanhee Chen (07:21):
Well, a lot of my initial policy work when I first started in public
policy was in healthcare, andpart of it was influenced by my dad,
who's a medical doctor.
And so I had a lot of exposure to thehealth care system when I was younger, and
you had an interest in it.
It's a pretty complicated area of policy.
I mean, I think all public policyhas its own, you know, little,
(07:44):
little twists and turns.
But I think health carehas a complexity to it.
And I really took to that whenI first did policy work and
then when I served in governmentduring the Bush administration.
George W Bush administration,that's the agency I worked in,
the Department of Health andHuman services.
So got a view in government,got a view outside of government.
And so for me at least, it's just been anarea of policy that I find fascinating and
(08:08):
I've spent a lot of time andenergy over the years focused on it.
So that's the story.
>> Bill Whalen (08:15):
So you wrote a column recently with your colleagues Tom Church
and Danny Hile, the title which 15 yearslater, the ACA has an HSA problem and
you can explain HSA to hisHealth Savings Accounts.
It's interesting.
So you mentioned the polling on Obamacare,Lanhi.
It's about a 6040 split.
62, 37 or so.
It drops a couple points if youcall it Obamacare instead of ECA.
(08:36):
But it's more popular than it's unpopular.
But yetthere's a question of product demand.
And what you point outin the column is this.
You note that the Congressional BudgetOffice back in 2010 predicted that there'd
be 24 million Americans buyinginsurance on exchanges by 2019.
But if you look at the actual numbers,it turns out to be 10.6 million.
You also predict enrollmentwill be declining this year.
(08:56):
So if the product is popular a lot here,
why don't we see it reflected inthe numbers of people signing up?
>> Lanhee Chen (09:01):
Well, because I, I think fundamentally the product that's being
offered is not a great fit forwhat people want.
People want to be able to choosea healthcare coverage product
that makes sense for their lives,that is adaptable, that's flexible,
not one that's relatively rigid.
Generally speaking, fairly fulsomein benefits and pretty high in cost.
(09:23):
Right.And I think that's the explanation.
If you look at the coverage gains thathave come through the Affordable Care act
over the last 15 years, the vast,vast majority, by some measure over 80% of
the coverage gains have not comefrom private health insurance.
They've come from an expansionof a program called Medicaid,
which in California we call Medi Cal.
But fundamentally what Medicaid is, isit's coverage for lower income Americans.
(09:47):
This is government run coverage.
And there's been research about whethercoverage under Medicaid is any more
effective or efficient at promoting healthoutcomes than having no insurance at all.
Now, I think it's hard to make that case,but
the reality is that Medicaid is a programthat is riddled with a lot of challenges.
(10:08):
And so the, the idea you're speakingabout, which is private health insurance
offered through marketplaces, which wasdefinitely a part of the Affordable Care
act, it hasn't been as popular as I thinkthe Congressional Budget Office originally
thought it would be or people whooriginally advocated for the law thought
it would be because the insuranceoffered through it is expensive and
it doesn't fit what most people want.
(10:31):
And so part of the answer there is canwe create a system that offers a little
bit more choice, a little bit morevariance in terms of pricing so
that people can get access to plansthat maybe suit them better at a price
that works andis free of some of the bells and
whistles that a lot of these planshave on the Obamacare marketplaces?
(10:51):
I think that's reallythe fundamental issue.
>> Bill Whalen (10:54):
Let's look at three matters being discussed right now, Lanhee,
and you tell me what the significance is.
The first one how does health care relateto the upcoming conversation on tax
reform?
>> Lanhee Chen (11:05):
Well, it's a significant relationship because a lot of what drives
health care policy is tax policy.
The single biggest element of why we havethe health care system we have is because
of a provision in the tax code that saysthat if you get your health insurance
through your employer, that insurance as abenefit is not taxable to the employee and
(11:26):
is a write off is a tax deduction forthe employer.
And so that interpretationof the tax code drives so
much of not just tax policy, buthealth care policy in this country.
So when we have a discussionaround health care reform,
it's going to be a conversationaround tax reform and vice versa.
(11:47):
So very close relationship.
When they look at changes to the tax code,
there will almost certainly have to beimpacts on, on health care in some way.
Health care is 20% of the economy, it'shighly unlikely that you wouldn't find
the tax code change to impacthealth care in the country.
>> Bill Whalen (12:03):
We're talking about they as in Congress, but are you looking at
a he or she, long he, someone like a BillCassidy who's gonna be leading this?
>> Lanhee Chen (12:09):
Yeah, I mean, this is a process that's going to be driven by
members of Congress in the majority party.
In the House, it's Republicans.
In the Senate,it's the Republicans, so yes,
Senator Bill Cassidy of Louisiana isa great leader on healthcare issues,
a guy who knows a ton about theseissues and, and cares deeply.
On the, on the House side, you're going tohave Jason Smith, who's the, the chair of
the House Ways and Means Committee,the principal tax writing committee there.
(12:32):
They're going to be very,very engaged as well.
So it is going to be a conversation forcongressional leaders as they figure out
how to put together as President Trumpsays, one big beautiful bill.
And when he talks about that,
part of that is whether thesetax changes go into that bill.
Now, there's some skepticism about whetherthe one bill can contain all of this
stuff, but we're going to see somesignificant legislative activity as we get
(12:56):
into the summer andfall months of this year.
>> Bill Whalen (12:59):
Okay, item number two, Lanhee, Medicare, Medicare expenditures in
particular, copying from your column, 2.2%of GDP in 2000, Medicare expenditures,
3.7% in 2023, projections showingit going up to 5% by 2034.
Now, when we talk Medicare andentitlements,
Washington likes to kick the candown the road, doesn't it?
>> Lanhee Chen (13:20):
Yeah. And the reason why we're seeing a higher
percentage of GDP spendaround Medicare is twofold.
One is we have more and more people whoqualify for Medicare because we have
an aging population and a lot of theboomers are retiring and of Medicare age.
But the second reason is because healthcare is becoming ever more expensive.
So if you look at health care inflation,those percentages tend
to outpace core inflation orinflation, other parts of the economy.
(13:43):
And so health care expenses are rising,consumption is rising, and as a result,
total Medicare expenditures are rising.
And that's a trend that wedon't see abating anytime soon.
So the question will be when policymakersdecide they want to make Medicare more
fiscally sustainable.
And as you know, politically,I think that's a very challenging topic.
>> Bill Whalen (14:04):
Okay, and item number three, Lanhee, Telehealth expansions.
Now, I don't know much about telehealth,but
I do know it has to dowith distance health.
So I start thinking red states.
>> Lanhee Chen (14:14):
Well, it's great for
rural areas where you don't have accessto ready access to healthcare facilities.
But telehealth essentially isgetting access to healthcare,
whether a doctor, registered nurse,
whoever can help diagnose a healthcondition via technology.
Right.Whether it's a mobile phone or
a Zoom call, whatever it might be andthat's something that really
(14:35):
was a big element of healthcareduring the pandemic and right after,
when people weren't engagingin as much in-person activity.
>> Bill Whalen (14:43):
Right.
>> Lanhee Chen (14:44):
And for some Americans, that access is really, really important.
And so we want to figure out ways tocontinue to incentivize the adoption and
continuation of telehealth.
And those authorities, some of thosewhich were originally created during
the pandemic, have lapsed or will lapse.
And so we want to create a permanentway of getting access to health care
(15:04):
in that way.
>> Bill Whalen (15:05):
What did Covid teach us, Lonnie, about both the promise and
challenges in doing telehealth?
>> Lanhee Chen (15:10):
Well, the promise is access.
You get people who are able to seea doctor usually much more quickly, and
they don't have to travel hoursin some cases to see a doctor.
Now, the restriction,the challenge is that there's only so
much we can do remotely, right?
I mean, there's only so much diagnosis wecan do without actually, in some cases,
having physical access to a patient, beingable to draw blood, being able to take
(15:32):
specimens, things that are needed todiagnose disorders, diseases, conditions.
It's very hard to do all of it.
I think there are certain kinds of healthcare that are well suited to telehealth.
Certain dermatological conditions,mental health, behavioral health issues.
Those are things that I think can behandled reasonably well via telehealth.
(15:53):
But it's not for everything.
And so we have to continue to be mindfulof the fact that we need a system that
allows for broad access andpeople to be able to seek care,
notwithstanding the fact that theymay live some distance from a doctor.
>> Bill Whalen (16:06):
So health care reform was discussed by Congress last year.
It was formerly the 482 pageBipartisan Health Care Act.
It included telehealth extensionsas you've been talking about.
It included pharmacybenefit manager reform.
It addressed the opioid crisis.
It didn't go anywhere, Lanhee.
And this is what has me curiousabout healthcare reform in Congress.
(16:27):
2024 is election year, so maybe it justdied because of election year politics.
2026 will be an election year.
2027 if the Democrats pick up the Houseas a divided Congress so it becomes all
the more problematic then you're the 2028into the presidential election year.
So does that kinda make us some regards2025 as kind of a year by default to get
(16:47):
things done?
>> Lanhee Chen (16:48):
Yeah, I mean I do think if we're going to accomplish anything on
health care,it's going to have to be this year.
It's probably gonna be part of the oneof a couple of legislative packages
we see this year.
Highly, highly unlikely that ithappens in an election year.
A, because it's complex but B,
I think a lot of members of Congressdon't like to deal with health care.
I think, their view is look, we didObamacare, we did a couple of other big
(17:11):
pieces of health care legislationover the last 15 years.
Why, why do we need to revisit this again?
Right.And so
every year there are a few healthcare provisions that have to get
dealt with because if they don't, doctorsdon't get paid and things don't happen.
So we deal with those.
But aside from that,the reality is that there's not
a tremendous amount of demandamongst members of Congress or
(17:32):
frankly amongst presidentsto deal with these issues.
So I think your assessmentof the calendar is right.
This is going to be the year to getthings done and we'll see if it happens.
>> Bill Whalen (17:42):
All right, let's shift for a moment to California.
Now let's talk about what'sgoing on in Sacramento.
It has a real budgetproblem with Medi-Cal.
California is the first state to offergovernment health care to all low
income people.
Medi-Cal is the state version of Medicaid.
It's the first to offer, as I mentioned,
healthcare to low income peopleregardless of immigrant status.
About 1.5 million immigrants without legalstatus are enrolled now in Medi Cal but
(18:06):
California cannot afford it right now.
You've also seen, Lanhee,a spike in seniors applying to Medi-Cal,
about a 40% increase.
And you referenced thisearlier in terms of the cost.
I looked up the numbers here.
It costs California on averageabout $15,000 per senior
enrolled in Medi-Cal versusabout 8,000 for non-seniors.
So what's Sacramento going to do here,Lonnie?
(18:27):
Because you have the fiscal realityof having to balance a budget.
California has to balance a budget,unlike Washington.
Now, we can get into smoke and mirrors ifyou want to, but you also have a governor
with presidential ambitions who has beenin the last month or so trying to show
a little leg, suggesting that maybe he'sa little more moderate than you think.
And you have this hot button issue ofundocumented Californians getting public
(18:48):
benefits.
So your thoughts on howthis gets resolved?
>> Lanhee Chen (18:51):
Well, it's the same way it gets resolved every year, which is that
they end up kind of reducing the amountthat they pay physicians to see patients.
And so if you look at the broad spectrumof how healthcare providers get paid,
if they see a patient throughcommercial insurance, you know,
the insurance you getthrough your employer,
(19:11):
let's assume for a moment thatthe provider gets paid a dollar.
If they're seeing a Medicaid patient,Medicare patient, excuse me,
this is the old age program.
They're seeing a Medicare patient,maybe they're getting $0.70 or $0.80.
>> Bill Whalen (19:24):
Right. >> Lanhee Chen
seeing a Medicaid patient, they'reprobably getting a quarter or less.
Right. >> Lanhee Chen
what traditionally has happened is asMedicaid budgets have been strained at
the state level, they've compressed downand they essentially pay providers less.
And the way that they deal with this isthey crunch down on providers every year.
So what happens?
Predictably, providers say, I'm notgonna see Medicaid patients anymore.
(19:47):
And then you end up with a,
with a real supply problem on healthcare in the Medicaid program.
So there are other things states will do.
Like they'll restrict access to certainprescription drugs they think are too
expensive or certain therapiesthey think are too expensive.
But regardless, what it results in is itresults in some form of rationing of care.
(20:08):
We don't call it rationing,that's not popular in America.
But that's what it is, right?
Care is rationed because the supplyof health care is constrained.
And that's fundamentally what happens.
And that's the only way thatthe math works when it comes to
the Medicaid program.
There's something else Sacramento could do,
Lanhee, they could write to Washingtonsaying, please send us money.
>> Lanhee Chen (20:28):
Well, And Washington sends California a lot of money.
>> Bill Whalen (20:31):
Right, send us more.
>> Lanhee Chen (20:33):
I mean, one of the deals with the Affordable Care act
was that the population that gothealth care through the Medicaid
expansion contained within Obamacare.
>> Bill Whalen (20:42):
Right. >> Lanhee Chen
reimbursed at over 90% ofthe cost the state puts out.
So the state's putting out a verysmall percentage of reimbursement for
that population,the traditional population,
which is a little bit cheaper tocover because it's primarily kids.
And kids tend to be cheaperto cover that population.
They're probably getting, I don't know,somewhere around 60 cents, maybe between
(21:05):
50 and 60 cents from the federalgovernment for every dollar they spend.
So, yeah, I mean,the feds could send more, but
the feds are fiscally constrained as well.
So the notion that they can look toWashington is kind of, kind of ludicrous.
A, because Washington's alreadysending plenty of money, and
if they were going to send more,every state would want more, and
we wouldn't have enough money to pay foreverything else.
Well, the reality of Republican Congress is going to send
(21:27):
California $3 billion becauseCalifornia underestimated the number
of undocuments who signed up for Medicaid.
Yeah, just not going to happen.
Pretty unlikely.
Robert F Kennedy, Jr. do you know him?
Have you met him?
>> Lanhee Chen (21:40):
Yeah, I mean, look I think he is a different,
a very different model of AL Secretary.
And I've known.
>> Bill Whalen (21:48):
I'm glad you mentioned that.
I went back and actually looked up.
So if you go back to the historyof HHS and then HEW.
Before that, you're talking about 70years of secretaries or about 26 of them.
I think there's nothing closeto Robert F Kennedy, Jr.
>> Lanhee Chen (22:02):
I mean and
I was gonna say, I've known a numberof HHS secretaries pretty well.
I served one under one.
And so it's a different model, butas it's a different kind of presidency,
it's a different kind of administration.
And if you look at the work they're doing,for example, to consolidate some elements
of the agency, yeah,I think some of that work is overdue.
(22:23):
I do think some of thatconsolidation is good.
Some will be disruptive,there's no question about that.
But overall,
it's a very different way of understandingthe role of the health secretary.
I'll give you one example, which isthe focus on food and on the impact
of food on our health and our abilityto remain healthy as a society.
(22:44):
That is something that previoussecretaries haven't spent as much time on,
quite frankly, as RFK has and will.
And so, as I see it, I don't wantto argue whether it's good or bad.
I'll just say that it'sa very different model.
And this administration is gonnado business very differently,
whether it's an economic policy orcertainly in healthcare policy.
>> Bill Whalen (23:04):
Right, it's an enormous challenge.
I mean, it's a enormous,enormous bureaucracy he's taking over.
>> Lanhee Chen (23:10):
It's 80,000 people.
>> Bill Whalen (23:11):
Right. >> Lanhee Chen
big agency.
A lot of responsibilities and, anda lot of different things going on,
some of which is very critical,some of which we'll see.
But he's made the decision that a lotof that needs to be consolidated down.
And, he may be right,he may be wrong, but time will tell.
Right.
(23:32):
What do you think he'sgoing to do on vaccines?
>> Lanhee Chen (23:34):
I don't know.
There's sort of two very differentways of thinking coming out of it.
I mean, there certainly he hasexpressed a measure of skepticism.
I think the way the agency hasapproached it is in a much more
skeptical fashion thanprevious administrations.
In some ways, the activity of your vaccineapproval and drug approval is moving as.
(24:00):
Has been the case inprevious administrations.
In others,I think there is a little more skepticism.
And so how much of that works its wayinto what actually gets approved,
what actually the marketplace tolerates,what people are going to do?
Again, time will tell.
But his attitude and his mindsetis we want, you know, we want the.
The science to be rigorous, and
(24:20):
we want to make sure that we'remaking decisions based on that.
And for some people, that's going toresult in outcomes that they don't like,
and I think they're willing toaccept the blowback for that.
>> Bill Whalen (24:31):
It would seem to me he's benefited from having Elon Musk in
Washington as well.
Must get so much attention that there'sbeen relatively less attention so
far directed toward RFK.
Now, he's been in the news from timeto time, but, boy, it's Doge, Doge,
Doge every day.
>> Lanhee Chen (24:44):
Yeah.
>> Bill Whalen (24:45):
So disruptors going into town.
So you've run for office, you'vethought about serving in public office.
Your thoughts on disruptors gettinginvolved in federal and state government?
For example, look at California.
Could California benefit from a Doge andsomeone like Musk coming into Sacramento?
>> Lanhee Chen (24:58):
And, I mean, I think California could definitely benefit from
someone taking a very criticallook at how we're spending money.
I mean, that's one of the reasons Iran for controller was because I felt
that there wasn't someone takinga very critical eye toward.
It wasn't so much.
I mean, yes, we spent a lot of money,but it wasn't so much the amount,
(25:18):
although that's an issue,was how effective that spend was.
And that's what bothered me.
It felt like when you talk to policymakersin Sacramento and you'd say, like,
hey, are we solving this problem?
They'd be like, yeah, of course.
Look at all this money we're spending.
And they never stopped toask the question, like,
is the money actually working?
And so, to me, it's about.
(25:38):
I want to divorce it from the Dogeconversation for a moment,
because I think Doge hasbecome very polarized.
I think the reality is that we haven'tspent a ton of time really getting into
the nitty gritty of is our spending reallygoing to what we say it's going to,
and is it effective in the waythat it needs to be effective to
solve the problems Californians have.
>> Bill Whalen (25:59):
Right. >> Lanhee Chen
we need some form ofexamination in California.
We have a bunch of different officialswho could be engaging in that activity
already, but politically,it doesn't serve their Interest to.
So they don't.
The controller who did get elected,I don't think she particularly cares.
My sense is she hasn't really spent muchtime thinking about these issues either.
(26:19):
Maybe busy trying to figureout what job she wants next.
And, that's the reality ofpolitics in Sacramento.
Well, she's never in the news.
But, with Musk, it's interesting becausehe comes from a tech culture, and
tech does things in terms of hours,days, weeks, sometimes months.
But government, as we know,doesn't do things about government,
does things in terms of years.
(26:40):
So it's fascinating to me to watchthat clash of the Musk culture versus
the federal culture.
>> Lanhee Chen (26:44):
Yeah. But I think that's
part of the issue with government.
Right.Is that it does move so slowly.
It's tough for change to happen sometimesbecause once you try to change something,
it's no longer current.
And, and this is part of the debatewe can have about Trump and Musk.
And what they're doing is whetherthey're doing is good or bad.
I think the reality is that you're notgoing to be able to make significant
(27:07):
change by moving incrementally, and
they're moving quickly andthey're going to make mistakes.
They have made mistakes, I think.
But there's also ways in which thosechanges wouldn't happen if they didn't
move in the manner in which they've moved.
So it's a little bit of a toughdichotomy because on the one hand,
you are going to make mistakes and
there are going to be things that aregoing to happen that people don't like.
(27:30):
But you wouldn't have had the changespeople did like if you didn't
have the ones they didn't.
So, this is the problem.
>> Bill Whalen (27:36):
Okay, so tell me what the Healthcare Policy Working Group is
coming up.
>> Lanhee Chen (27:40):
Well, we just had a great conference about a month ago where
we brought,
some of the leading thinkers in healthcarepolicy to the Hooper Institution and
sat for two days andtalked about all these different issues.
We talked about Bill, the tax code and,private health insurance, about Medicare,
Medicaid, drug approval,really important topics in health care.
And our goal is to continue writing andresearching and connecting the academic
(28:02):
and analytical work that's being done inhealthcare with policymakers in a way that
they can understand and use and deployto actually make better public policy.
And that's really the secret sauce of whatwe're doing with the working group is
providing that linkage betweenthe research and the thinking and action.
Because I think a lot oftimes in healthcare, and
(28:24):
this is true in a lot of policy,you have a lot of good thinking and
research and stuff that's being written,and then you have the policymakers,
and it's not clear that thatconnection is always made.
And so we want to make sure thatwe're drawing the connection and
providing that connective tissue andhelping people understand,
helping policymakers understand inparticular, how it is that the research
that's being done about the health caresystem can impact how they do their work.
(28:48):
And we feel very strongly thatthere's a need for that, and
we're excited about the opportunity.
>> Bill Whalen (28:54):
Right, and finally we've talked a lot about healthcare reform at
the federal level.
We haven't talked much about the states,though.
So is there anything worth lookingat in terms of Austin, Tallahassee,
innovative states?
>> Lanhee Chen (29:03):
A lot, I mean, look, I think, Bill, so much of the important
work of healthcare reform,because the Federal Government is so
intractable in a lot of ways,it is gonna happen at the state level.
And whether that's innovative programs tocover more people, ways of reducing cost,
increasing transparency, bringingtogether the public and private sector.
So many states have done interesting work.
Georgia is doing a tonof interesting work.
(29:25):
They have a program called Georgia Accessthat's designed to make a healthier
marketplace so
that people can get access to healthcareplans that make sense for them.
You look at a state like Alaska that'sdone a lot of work at figuring out how
they can make insurance more affordablefor populations who are tough to insure.
You look at other states like Idaho andUtah, Texas, as you mentioned, Florida.
(29:47):
All these states are doing some reallyinteresting work across a whole host of
healthcare areas.
And by the way, not all red states.
You've got some blue states thatare experimenting with different health
care plans.
Some of it I agree, with,some of it I don't.
But, that's the beauty of a federalistsystem, is that you have states that can
experiment and the good ideas succeed andthe bad ideas fail.
And that's what our system is for.
>> Bill Whalen (30:09):
Okay, final note, any conversation Lanhee Chen has to include
his incredible love forthe Los Angeles Dodgers.
As long as I've known him,he's been a Dodgers fan,
he has not jumped on the bandwagon.
I'm confused, Lanhee,I should hate the Dodgers?
They're from Los Angeles,you gotta hate Los Angeles.
They've spent a lot of money to bringin a lot of talent and they win.
They're what, eight?
No, as we go into this podcast right now.
(30:30):
But my God, it's a fun team to watch.
I'm having a hard time disliking them.
>> Lanhee Chen (30:34):
Yeah, it's very entertaining.
And the ways in which they'rewinning games, I mean,
the last couple of games they'vewon by coming from behind.
The most recent game was a,was a walk off home run by Shohei Ohtani.
And it's a fun team to watch.
There's so many personalities andfundamentally good people led by a strong
manager who I think is a good guy at core,Dave Roberts.
(30:54):
So it's a great team, it's the kindof golden age of Dodger baseball.
I'm really excited to get to shareit with my family and my friends and
we'll see how long it lasts, right?
No dynasty lasts forever.
It's not really a dynasty yet,they've won one championship.
But hopefully it can be a dynasty.
And it's a great time to be a Dodger fan,for sure.
>> Bill Whalen (31:11):
Well, like you, I'm always getting asked questions by reporters.
Point me to something in Californiathat works and I have to point them
to the Dodgers because it's just anincredible business model they produced.
>> Lanhee Chen (31:20):
Yeah, no, you're right, it is.
And it's always, it's fun to watch forthose of us who are fans.
And I'm glad to hear it's fun to watch forpeople who aren't fans as well.
>> Bill Whalen (31:28):
Yeah, okay.
Lahnee, enjoyed the conversation.
Thanks for doing this.
>> Lanhee Chen (31:31):
Thanks, Bill.
>> Bill Whalen (31:32):
You've been listening to Matters of policy and Politics,
a Hoover Institution podcastdevoted to governance,
balance of power here in America andaround the globe.
If you've been enjoying this podcast,please don't forget to rate, review and
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And if you wouldn't mind, spread the word.
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(31:54):
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And we'll be back soon with a newinstallment of Matters of Policy
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Until then, take care.
(32:14):
Thanks for listening andwe will see you soon.
Bye Bye.
>> Presenter (32:18):
This podcast is a production of the Hoover Institution,
where we generate andpromote ideas, advancing freedom.
For more information about our work,to hear more of our podcasts or
view our video content,please visit hoover.org.
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