Sunday, January 27, 2019

Medicaid Expansion

Steve Rose (who I respect greatly!) wrote an editorial in favor of Medicaid expansion (Steve's article).   Here is a response I wrote to Steve:

Dear Steve,

Your attack on Jim Denning may be justified relative to his position, but I think you’ve missed the point about opposition to Medicaid expansion.  Normally, your articles are strongly educational, but this article appears to veer strongly to the other side, contributing to massive mis-education of the public.

You argue that “the bulk of expenses are paid for by the federal government”, the typical misleading short-term-focus argument of those espousing Medicaid expansion.  You then indicate repeatedly that opposition to Medicaid expansion is petty politics.

Personally, I am not inclined to expand Medicaid in this fashion, but I am not completely opposed to it, as explained below.  However, we should have honest, balanced discussion.

Here’s how I view the ACA Medicaid expansion.  Please advise if you think I am incorrect.
  1. The Federal government is NOT paying for it.  It increases the Federal government debt which is already an incredible burden on future generations. (We practice severe systemic taxation without representation by foisting current costs on future generations and it is beyond their carrying load.)
  2. All Federal money comes from the citizens in one way or another.
  3. Approximately half of the cost of Medicaid is traditionally charged to the Federal budget.
  4. The Democrats wanted to extend Medicaid but knew the states could not afford their half.  (Whether the Federal budget could afford its half was irrelevant because it would just be added to the debt.)
  5. So the Democrats said that 100% would be charged against the Federal budget for 2014-2016, dropping to 95% in 2017, 94% in 2018, 93% in 2019, and supposedly levelling off at 90% for 2020 and beyond.
  6. (The Democrats also wanted to punish states that did not expand Medicaid by withdrawing their traditional Medicaid funding.  However, the Supreme Court invalidated this, so it is no longer relevant, other than perhaps in understanding the intent.)
  7. Correct me please if this has changed.  At one point, the ACA said that once a state expands Medicaid, it has no right to reverse thereafter.  I don’t think the Supreme Court decision over-turned this, but I don’t know if this is still the case.  Is such a restriction appropriate?  Why put such wording in the law?  I think the wording is intended to allow the federal government to increase the unfunded mandate it imposes on states, by reducing the percentage of Medicaid expansion cost charged to the federal government in the future.
  8. Are you aware of anything that would restrict the Federal government from increasing the states’ shares in the future?
The Medicaid expansion argument that “citizens in other states are paying for it, so we should grab as much as we can” (or “we’re paying the money to Washington, we should at least get our share back”) is related to the mentality that leads to “roads to nowhere” and keeping unnecessary federal facilities open.  To me, such a system and such a mindset are dangerous examples of the “tragedy of the commons”.

A more minor issue that you can perhaps help me with is the eligibility up to 138% of the Federal Poverty Level (FPL).  Is that because legislators feel that people above a proper poverty level need help with insurance costs (I think so) or is it because they feel the FPL is defined at too low an income level?  If the FPL is raised to an appropriate level (subjective of course), will thresholds above FPL be appropriate?

I’m concerned about people lacking access to health care and I understand that providing health care creates jobs, improves recipients’ productivity, lowers other costs and reduces net income disparity, all of which are positives.  However, the debate should be based on those issues and what decisions should be federal vs. state, recognizing the full cost rather than promoting this “other states will pay” argument.


I remain a big fan of yours despite disappointment with this particular article.

Claude



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