Tag: medicaid

50 Vetoes: How States Can Stop the Obama Health Care Law

Today, the Cato Institute releases my latest working paper, “50 Vetoes: How States Can Stop the Obama Health Care Law.” From the executive summary:

Despite surviving a number of threats, President Obama’s health care law remains harmful, unstable, and unpopular. It also remains vulnerable to repeal, largely because Congress and the Supreme Court have granted each state the power to veto major provisions of the law before they take effect in 2014.

The Patient Protection and Affordable Care Act (PPACA) itself empowers states to block the employer mandate, to exempt many of their low- and middle-income taxpayers from the individual mandate, and to reduce federal deficit spending, simply by not establishing a health insurance “exchange.” Supporters of the law do not care for this feature, yet they adopted it because they had no choice. The bill would not have become law without it.

To date, 34 states, accounting for roughly two-thirds of the U.S. population, have refused to create Exchanges. Under the statute, this shields employers in those states from a $2,000 per worker tax that will apply in states that are creating Exchanges (e.g., California, Colorado, New York). Those 34 states have exempted at least 8 million residents from taxes as high as $2,085 on families of four earning as little as $24,000. They have also reduced federal deficits by hundreds of billions of dollars.

The Obama administration is nevertheless attempting to tax those employers and individuals, contrary to the plain language of the PPACA and congressional intent, and to deny millions of Americans the opportunity to purchase low-cost, high-deductible coverage. Employers, consumers, and even state officials in those 34 states can challenge those illegal taxes in court, as Oklahoma has done. States can also block those illegal taxes—and even stop the federal government from operating an Exchange—by approving a strengthened version of the Health Care Freedom Act.

The PPACA’s Medicaid expansion, which would cost individual states up to $53 billion over its first 10 years, is now optional for states, thanks to the Supreme Court’s ruling in NFIB v. Sebelius. Some 16 states have announced they will not expand their programs, while half of the states remain undecided. Yet the Obama administration is trying to coerce states into implementing parts of the expansion that the Court rendered optional. States can replicate Maine’s lawsuit challenging this arbitrary attempt to limit the Court’s ruling.

Collectively, states can shield all employers and at least 12 million taxpayers from the law’s new taxes, and still reduce federal deficits by $1.7 trillion, simply by refusing to establish Exchanges or expand Medicaid.

Congress and President Obama have already repealed the third new entitlement program the PPACA created—the Community Living Assistance Services and Supports Act, or CLASS Act—as well as funding for the “co-op” plans meant to serve as an alternative to a “public option.” A critical mass of states exercising their vetoes over Exchanges and the Medicaid expansion can force Congress to reconsider, and hopefully repeal, the rest of this counterproductive law. Real health care reform is impossible until that happens.

Yes, Florida Voters Oppose ObamaCare’s Medicaid Expansion

Bloomberg’s Josh Barro criticizes the James Madison Institute’s poll showing that 65 percent of Florida voters oppose implementing ObamaCare’s Medicaid expansion. Barro is mostly wrong. But even when he’s right, he’s still wrong. Disclosure: I helped JMI formulate their poll questions.

Barro complains that JMI conducted a “push poll.” His first complaint is:

It starts by priming respondents with questions about the national debt and the size of Florida’s existing Medicaid budget.

Then it gives an inaccurate description of the terms of the expansion. Poll respondents were told that Medicaid currently covers people earning up to 100 percent of the federal poverty line. That’s not true: In Florida, the limit for adults is 56 percent of FPL, and you must have dependent children to qualify.

Though Barro slightly mischaracterizes the poll question, he is basically correct, and the inaccuracy is my fault.

The folks who originally drafted JMI’s poll questions aren’t health care wonks, so they ran their questions by me. This question was originally worded the way Barro claims the final question was: “Medicaid coverage is currently available for those with incomes up to 100% of the poverty line.” I hurriedly emailed the JMI folks, “Florida does not offer Medicaid coverage to everyone below 100 percent of poverty. See page 2 and table 3 of this report. You might replace ‘currently’ with ‘generally.’” So that’s what JMI did. In retrospect, Barro is right. “Generally” gives the impression that Medicaid is available to more Floridians below the poverty line than is actually the case, and I should have offered a better edit. Mea culpa.

His next complaint is not accurate:

Respondents also heard that after three years, the state would be on the hook for “more than 10 percent” of the cost of newly eligible adults. That’s not true, either: The state’s share would be exactly 10 percent.

Under current law, for the first three years the feds pay for 100 percent of the cost of claims for newly eligible adults. They do not pay 100 percent of the administrative costs of covering those adults. States have to pick up much of that cost (as well as other costs related to other parts of the expansion). So the question is accurate and Barro is wrong. He’s not a health care wonk, though, so he can be forgiven for this one.

But Barro’s third complaint is the real doozy:

Rick Scott’s ObamaCare Flip-Flop

Word is that Florida Gov. Rick Scott (R) has decided to throw his support behind, or at least drop his opposition to, ObamaCare’s Medicaid expansion. His formal announcement, which may come tomorrow, will receive much attention. Scott was an early opponent of ObamaCare. He parlayed that opposition into a bid for governor in 2010, and rode the anti-ObamaCare wave into office. Shortly after becoming governor, he announced he would not lift a finger to help the federal government implement the law. I followed all this pretty closely. I served on Scott’s gubernatorial transition team, at his invitation.

Now, it appears Scott doesn’t see the point in opposing the Medicaid expansion. Never mind that – according to my colleague Jagadeesh Gokhale, whom the Social Security Administration consults when making these types of projections – the expansion will cost Florida $20 billion over the first 10 years, and add 3 million Floridians to the Medicaid rolls. Never mind that many of those Floridians currently have private health insurance. Never mind that Medicaid will provide them inferior access to care. Never mind that expanding Medicaid would make those millions of voters dependent on government for their health care, and thus would expand the constituency for more government spending and higher taxes.

There is speculation that Scott made a deal with the Obama administration: he would drop his opposition to the Medicaid expansion in exchange for HHS approving Florida’s plan to put its Medicaid enrollees in managed care plans. HHS approved Florida’s plan today. But economists have shown that moving Medicaid enrollees into managed care increases state and federal spending because it lures more people into the program. So it appears that Scott supported ObamaCare’s Medicaid expansion so that the Obama administration would support his.

Scott says he still opposes having Florida create a health insurance Exchange. Then again, he said the same thing about the Medicaid expansion. So in addition to whatever other damage his flip-flop does, he has squandered his credibility as an opponent of ObamaCare.

To reclaim any credibility on this issue, Scott would have to file an Oklahoma-style lawsuit to block the illegal taxes that the Obama administration is trying to impose on employers in Florida and the other 33 states that have opted for a federal Exchange. Or will he sell out Florida’s job creators too?

ObamaCare’s Priceless Warm Glow

Ed Kilgore says ObamaCare opponents don’t care about cost-benefit analyses:

many of them just can’t bring themselves to even notice that…Obamacare with its Medicaid expansion, health care exchanges, and regulatory mandates [does] actually provide health coverage to people in exchange for the money and the “liberty” surrendered.

Speaking of, what is the exchange rate between liberty and “liberty”?

But about those benefits. What benefits do broad-based expansions of health insurance, like ObamaCare, actually provide? Aside from giving Kilgore a warm glow, that is.

It turns out there has been only one—one!—scientifically rigorous study of that question. The Oregon Health Insurance Experiment found Medicaid coverage confers modest improvements in self-reported health and financial security. The first batch of that study’s results appeared more than a year after Congress enacted ObamaCare. And there remains to this day absolutely zero evidence that Medicaid or other broad-based expansions of health insurance buy us the most health and financial security per dollar spent.

Then again, the Oregon Health Insurance Experiment did not attempt to measure the value of the warm glow that Kilgore and others derive from Medicaid and ObamaCare, one that appears to be worth trillions of dollars of other people’s money.

On ObamaCare’s Discriminatory Subsidies, Brewer Bows When Arizona Should Keep Slugging

Arizona Gov. Jan Brewer (R) recently set aside her vociferous opposition to ObamaCare’s costly Medicaid expansion by announcing she will support implementing that expansion in Arizona. A significant factor in her reversal, she claimed, was that if Arizona did not expand its Medicaid program, then some legal immigrants would receive government subsidies while U.S. citizens would get nothing.

Brewer’s analysis of this “immigration glitch,” and her remedy for it, are faulty. Fortunately, she, Arizona’s legislature, and its attorney general have better options for stopping it.

An odd and unforeseen result of the Supreme Court’s decision upholding ObamaCare is that, in certain circumstances, the law will now subsidize legal immigrants but not citizens. What triggers this inequity is a state’s decision to implement an Exchange – not the decision to opt out of the Medicaid expansion. (Even if a state implements both provisions, legal immigrants would still receive more valuable subsidies than citizens.) The good news is that states can therefore prevent this inequity simply by not establishing an Exchange. If Brewer wants to avoid this “immigration glitch,” there is no need to expand Medicaid. She already blocked it when she refused to establish an Exchange.

The bad news is that the Obama administration is trying to take away the power Congress granted states to block those discriminatory subsidies, and the punitive taxes that accompany them. Contrary to both the statute and congressional intent, the IRS has announced it will impose that witch’s brew in all states, even in the 32 that have refused to establish an Exchange.

Oklahoma attorney general Scott Pruitt has filed suit to stop that stunning power grab. If Brewer is serious about stopping the “immigration glitch,” the way to do it is by filing a lawsuit similar to Oklahoma’s, while adding a complaint that the Obama administration’s illegal subsidies also violate the Equal Protection clause.

Estimate: Massachusetts Diverts 99% of Tobacco Money to Other Causes

From this weekend’s Lawrence (Mass.) Eagle-Tribune
Millions of dollars originally intended for smoking cessation programs in Massachusetts have been diverted to offset budget deficits, leaving the state struggling to fund quit-smoking hotlines, treatment programs and anti-tobacco advertising, the New England Center for Investigative Reporting has found. … 
 
“Roughly 99 percent of all the tobacco dollars that come into the state are used for something else,” said Stephen Shestakofsky, recently retired executive director of Tobacco Free Massachusetts, an anti-tobacco advocacy group. He was referring to the nearly $254 million in tobacco-related legal awards given to Massachusetts in 2012. More than $561 million in tobacco taxes was also collected, bringing the state’s total tobacco tally to just over $815 million, the CDC reports.
On the one hand, it’s not as if I’d urge the state of Massachusetts to sink vast sums into the paternalist project of hectoring its citizens to quit, especially not at a time when its taxpayers are already having to foot a steep tab for its RomneyCare health insurance experiment. On the other hand, we can now see that it was the purest pretense for attorneys general in states like Massachusetts to have portrayed the Great Tobacco Robbery settlement of some years back as motivated by a supposed need for new “public health” outlays, as opposed to sheer plunder and the interests of the various lawyers involved.  
 
That’s worth remembering next time you hear a proposal to extract large sums from the food industry (either through taxation or, as some in the legal profession would like, by suing them for it under some creative theory) with the promise that funds will then be earmarked for anti-obesity efforts. In practice, after voters’ attention wanders, funds ordinarily get earmarked for the advancement of the political interests of those in power.  
 
More on the late-1990s Medicaid-tobacco settlement from Cato chairman Robert Levy here, here, here, and in his book Shakedown, and from me here, here, and in my book The Rule of Lawyers

Might the Washington Post Be Partial to ObamaCare?

Here’s a poor, unsuccessful letter I sent to the editor of the Washington Post:

Thirty-two states have issued a stunning vote of no confidence in President Obama’s health care law by refusing to finance and operate the new regulatory bureaucracies (“exchanges”) at its core. This development threatens to delay implementation of the law, at the very least.

Post readers learned of this once-unimaginable rebuke in an article that gave top billing to those states’ critics [“Critics Slam GOP States over Health Exchanges,” Dec. 14, A1]. The article further claimed, “there’s no question that federal officials will wield substantially more power” in those states, when in fact that highly disputed opinion is at the center of the entire debate.

This followed an article hailing an Obama administration decision to abandon a measure designed to reduce federal Medicaid spending as a “silver lining” [“A Supreme Court Silver Lining?: How Medicaid Dodged the Deficit Debate,” Dec. 12]. The article quoted six sources who supported the administration’s move, but none of the administration’s critics.

Post readers would be better served by less partial health policy coverage.