Tag: medicaid

Talk of Replacing ObamaCare Is a Bit Premature

Now that a bipartisan coalition in the House has voted to repeal ObamaCare, an even larger bipartisan coalition has approved a Republican resolution directing four House committees to “replace” that ill-fated law.  House Resolution 9 instructs the committees to “propos[e] changes to existing law” with the following goals:

  1. “Foster economic growth and private sector job creation by eliminating job-killing policies and regulations.”
  2. “Lower health care premiums through increased competition and choice.”
  3. “Preserve a patient’s ability to keep his or her health plan if he or she likes it.”
  4. “Provide people with pre-existing conditions access to affordable health coverage.”
  5. “Reform the medical liability system to reduce unnecessary and wasteful health care spending.”
  6. “Increase the number of insured Americans.”
  7. “Protect the doctor-patient relationship.”
  8. “Provide the States greater flexibility to administer Medicaid programs.”
  9. “Expand incentives to encourage personal responsibility for health care coverage and costs.”
  10. “Prohibit taxpayer funding of abortions and provide conscience protections for health care providers.”
  11. “Eliminate duplicative government programs and wasteful spending.”
  12. “Do not accelerate the insolvency of entitlement programs or increase the tax burden on Americans;” or
  13. “Enact a permanent fix to the flawed Medicare sustainable growth rate formula used to determine physician payments under title XVIII of the Social Security Act to preserve health care for the nation’s seniors and to provide a stable environment for physicians.”

Three things about the Republicans’ “replace” effort:

First, America’s health care sector has historically been handicapped by one political party committed to a policy of (mostly) benign neglect, and another party committed to degrading that sector’s performance through government subsidies, mandates, price controls, and other exchange controls.  Republicans now appear to be taking a different posture, and that’s encouraging — but not entirely.  When Republicans set their minds to reforming health care, they are often as bad as Democrats.  (See the Republican “alternatives” to ClintonCare.  Or Medicare Part D.  Or #4-#7 above.)  Exactly how House Republicans plan to deliver on the above goals remains to be seen.

Second, no matter how House Republicans plan to deliver on the above goals, their proposals will be preferable to ObamaCare.  Republicans quite literally could not do worse if they tried.

Third, no matter how good the Republicans’ proposals are, they will be utterly ineffective so long as ObamaCare remains on the books.  ObamaCare’s influence is so pervasive and harmful that it makes real health care reform all but impossible.

So it’s a bit premature to be talking about replacing ObamaCare.

House Vote to Repeal ObamaCare Is More than Mere Symbolism

The symbolism of today’s House vote is striking. Within a year of ObamaCare’s enactment, the House of Representatives has voted overwhelmingly to repeal it.

That didn’t happen with Social Security. It didn’t happen with Medicare. Social Security and Medicare did not face sustained public opposition from the moment they were introduced in Congress. They did not pass by one vote, in the dead of night. They were not challenged as unconstitutional by half the states in the union.  They were not struck down as unconstitutional by a federal court within a year of enactment.

The House vote to repeal ObamaCare is just the latest sign that ObamaCare goes too far, that it creates a more intrusive government than the American people are willing to accept.

But the House vote is not mere symbolism, as the Obama administration would have us believe.  This vote has moved the ball forward on repeal.  This and further similar votes in both the House and Senate will reveal where members stand on repealing ObamaCare.  Voters may use that information to replace pro-ObamaCare members with people who will vote to repeal ObamaCare in the next Congress.  That’s how the political system works.

At the same time, this repeal vote makes it more likely that the Supreme Court will strike down ObamaCare. Like it or not, the Supreme Court follows the election returns. This vote shows the Court that it will not pay a price in the public’s esteem if it overturns ObamaCare.

Today’s vote makes it more likely that someone with the power to scrap ObamaCare will do so – and the Obama administration knows it.  Why else would they come out with both guns blazing against a purely “symbolic” act?

When that happens, it will be a good day for America. Real health care reform is impossible while ObamaCare remains on the books.

New Cato Study: ObamaCare’s Medicaid Mandate Imposes Staggering Costs on States

ObamaCare requires each state to open its Medicaid program to all legal residents earning up to 138 percent of the federal poverty level.  Supporters estimate this mandate will cost state governments little: the Kaiser Family Foundation’s worst-case-scenario estimates suggest that state Medicaid spending would rise by just 1.2 percent in New York and 5.1 percent in Texas between 2014 and 2019.

In a new working paper titled, “Estimating ObamaCare’s Effect on State Medicaid Expenditure Growth,” Cato Institute Senior Fellow Jagadeesh Gokhale shows that those estimates are generally far too low.  Gokhale finds that all of the five most-populous states – California, Florida, Illinois, New York, and Texas, which account for roughly 40 percent of U.S. population – will struggle to cope with rising Medicaid spending even without ObamaCare’s Medicaid mandate. But ObamaCare significantly increases that burden on four of them:

In its first year of full implementation (2014), ObamaCare will increase spending on Medicaid by 9.0 percent in Florida, 22.2 percent in Illinois, 6.4 percent in New York, and 13.5 percent in Texas. Spending in California is projected to be smaller by about 3 percent.

The cost grows over time.  The following chart shows the burden that ObamaCare’s Medicaid mandate will impose on these states over the first 10 years of full implementation:

Compared to a world without ObamaCare, state Medicaid spending will decline by 3 percent in California, but increase by 17.1 percent in Florida, 28.1 percent in Illinois, 16.5 percent in New York, and 12.9 percent in Texas over the first 10 years of full implementation.

On a per-taxpayer basis, ObamaCare’s Medicaid mandate is also highly inequitable:

for every $1 in costs imposed on each working-age Texas adult, Floridians and New Yorkers will pay about $1.50, Illinoisans will pay $3.60, while Californians will save a small amount (about 3 pennies).

Gokhale explains that the Kaiser Family Foundation’s projections are lower because they assume that ObamaCare’s individual mandate will not significantly increase enrollment among people who were eligible for Medicaid but not enrolled under the pre-ObamaCare rules.  Consistent with other research, Gokhale assumes the individual mandate will encourage people to enroll in Medicaid even if they would not face financial penalties for being uninsured.

Update (3/3/11): The chart and text were updated to reflect corrected numbers.

Is the Administration Cooking the Books on Govt’s Share of Health Spending?

Something smells fishy here.

Today, the federal agency that runs Medicare and Medicaid released its estimates of national health expenditures in 2009.  Interestingly, the U.S. Centers for Medicare & Medicaid Services re-categorized about 6 percent of national health expenditures – well over $100 billion – from “government” to “private,” at the very moment that the government share of NHE appeared set to hit 50 percent.

Last year, CMS projected that government health spending would “account for more than half of all U.S. health care spending by 2012.”  But it looks like we were set to reach (have reached?) that milestone much sooner.  See the below table, which I made using CMS’s estimates from 2008 and Exhibit 5 (p. 16) from today’s report.

Turns out, it was the private sector spending that $100 billion each year, not the government.  Who knew?

This 6-percentage-point drop in government’s share of health spending was apparently due to “the renaming of some service and payer categories.”  A footnote leads to a page on the CMS site that isn’t active yet, so we can’t see what was recategorized from government to private spending.

Exhibit 5 of today’s report also reveals that total health care spending grew by 4 percent in 2009, while government health spending grew by 9.9 percent and private spending shrank by 0.2 percent.  Indeed, today’s report contains this money quote:

Federal health spending increased 17.9 percent between 2008 and 2009 …. In contrast, the shares of spending of households… private businesses… and state and local governments… fell by roughly one percentage point each between 2008 and 2009.
And the feds are the guys who say they’re going to control health care costs!

I can’t say for sure that there’s something fishy going on here.  But this re-categorization comes at an awfully convenient time for an administration struggling with public dissatisfaction over its, ahem, government takeover of health care.  My spidey sense is tingling.

How Gov. Cuomo Can Fix New York’s Budget Mess

New York’s budget problem is actually a Medicaid problem.  In Sunday’s New York Post, I offer advice to New York Governor Andrew Cuomo (D) on how to fix a budget gap that will grow to $17 billion during his term:

Gov. Cuomo can’t fix Medicaid by himself. He needs the help of Congress.

There is a solution…

Block grants are how President Bill Clinton and a Republican Congress reformed welfare back in 1996, to spectacular success. Welfare reform forced New York to be smarter about welfare spending, just as a block grant would force New York to rededicate Medicaid to its original mission — providing necessary medical care to the truly needy.

There’s one place Gov. Cuomo can start on his own: Close the loopholes that allow well-to-do New Yorkers to feign poverty on paper so that Medicaid underwrites their long-term care. Medicaid exists for the poor, not to help well-off baby boomers protect their inheritance.

Steve Moses of the non-partisan Center for Long-Term Care Reform recommends that Cuomo take steps to ensure that New Yorkers with means pay for their own long-term care. These include reducing New York’s home-equity exemption from $750,000 to $500,000 (and seeking a federal waiver to reduce it to $0), expanding the use of liens and estate recovery and ending the abusive practice of “spousal refusal.”

Reducing Medicaid abuse won’t be easy. But Cuomo doesn’t have much choice.

In fact, what he has is an opportunity to become the leading national spokesperson for block grants, the quickest and easiest course to relief for states toiling under the unsustainable yoke of Medicaid spending.

For more on Medicaid reform, click here.  For more on abuse of Medicaid’s long-term care subsidies, click here.

ObamaCare Challenges Gain Steam

Today’s hearing in Pensacola built on Monday’s ruling out of Richmond: Judge Roger Vinson is likely to hold the individual mandate unconstitutional. And such a decision would be the most significant development possible at the district court level because the Florida case involved 20 states, with more joining the lawsuit when new governors and attorneys general assume office in January. It is unprecedented for this number of states – again, soon to be a majority – to sue the federal government and it shows the singular and extreme nature of the government’s assertion of raw power here.

As Judge Vinson said during the hearing, the Supreme Court has held that the outer bounds of Congress’s regulatory power under the Commerce Clause (as exercised via the Necessary and Proper Clause) is activity that has a substantial effect in interstate commerce. If the government were to prevail under its theory that Congress can regulate any decision with economic ramifications – as two district courts have unfortunately held – then there is no principled limit on federal power. At that point, we might as well throw the Constitution out the window and admit that Congress is the judge of its own authority.

Finally, while Judge Vinson was more skeptical of the Medicaid-related claim that is unique to the Florida lawsuit, it is similarly impossible to draw limits to federal power if we allow Congress to impose a Hobson’s Choice on states of either withdrawing from Medicaid or implementing budget-crippling regulations. At a certain point the strings that Congress attaches to federal funding become coercive – particularly when the new shape of a government program (here, Medicaid) radically transforms the compact states originally joined and have inextricably relied on.

Is Congress Above the Law?

The first item on this election campaign’s Contract with America was that, if elected (as they have been), the House Republicans would require that all laws that apply to the rest of the country also apply to Congress.  We’ll see if that and the other promised reforms materialize, but it does raise yet another issue in the context of Obamacare.

As my colleague Michael Cannon pointed out to me, the new health care law kicks congressmen out of the Federal Employees Health Benefits Program.  (The current FEHB is no different from the health coverage provided by any private employer -– federal employees choose from a series of private plan options (none of which is run by the government), and receive a subsidy from the federal government acting in its role as an employer.)

My first reaction to hearing this was:  Good – if the rest of us lose our health care freedom, so should those who forced this new atrocity on us.  But apparently this result was not intended, so the Obama administration has decided to ignore that part of the law.

No joke.  Here is the Congressional Research Service report on the provisions that oust members of Congress from their health insurance.  And here is the letter in which an Obama appointee announces that the administration will ignore the law.  These two articles also provide important information.

Now, assuming that something constitutionally problematic is going on here, what can anyone do about it?  To put it in legal terms, who has standing to sue for this apparent constitutional violation?  It’s a tough row to hoe – taxpayers cannot bring suit based on generalized grievances – but off the top of my head, I can think of two possibilities: (1) members of Congress suing the president or the Department of Health and Human Services for essentially passing new law and therefore infringing on congressional prerogatives (thereby violating the separation of powers); or (2) an insurance broker or carrier who would otherwise be signing up new clients.

And there are two additional related questions:

1. Why did Congress expand Medicaid while refusing to participate in it themselves?  Obamacare expanded Medicaid to an estimated 18 million new Americans, none of whom will have a choice of private plans, instead being dumped into Medicaid, a program notorious for access problems (and which in Arizona now doesn’t cover organ transplants).  Yet all Senate Democrats voted against an amendment enrolling members of Congress in the new Medicaid program (all Republicans voted for it, except one who was absent).

2. Will members of Congress use their own salaries to pay any fines assessed because their employees have “unaffordable” health coverage?  Obamacare includes a $2,000 per worker penalty for any employer that does not provide “affordable” coverage, beginning in 2014.  Many junior staffers have incomes below 400 percent of the federal poverty level ($43,320 for a single person, or $88,200 for a family of four), and thus could be subject to the new statutory test of whether their health insurance options are “affordable.”  While it’s unclear how this particular provision will be implemented for Hill staff – due to the “significant unintended consequences” of sloppy drafting – it’s entirely possible that member offices could be assessed a $2,000 penalty for every worker needing insurance subsidies because they have no “affordable” alternative.  If that scenario happens, will the members of Congress who voted for the law pay the penalty out of their own salaries or will they rely on taxpayer funds to finance an obligation they imposed on themselves?