But the Medicaid expansion is only half of ObamaCare’s formula for moving most of America onto a federally-run health system.
The other half is made up of the so-called state-based health insurance exchanges that are subsidized (and regulated) by the federal government. With the individual mandate in place, people that fail to qualify for Medicaid will most likely be forced into the exchanges. (ObamaCare purposefully makes it cheaper for employers to pay a fine rather than cover employees.)
Writing in the New York Times on Saturday, Tyler Cowen, an economics professor at George Mason University, explains how to make the best of the very bad possibility that President Barack Obama is reelected and ObamaCare continues to be implemented, albeit with the inevitable cost overruns.
There is one way this might work: by limiting the subsidies for insurance. Note that the law itself mandates cuts if those subsidies exceed a certain percentage of gross domestic product by 2018. Most likely, the reform could not stop there, because the insurance cost burden for many Americans would feel intolerably high without the subsidies.
The next step, therefore, would lower costs by limiting the mandate to covering catastrophic conditions. Yet a further step would remove the mandate for noncatastrophic coverage, thus giving people more control over how much they want to spend on health care versus other priorities.
We would then have government-subsidized and mandated catastrophic insurance, and a freer market for other health care expenditures. We might even return to a health savings account approach on the noncatastrophic side.
That’s far from a perfect outcome, but it’s probably the most positive path that can be achieved.
Okay, it’s time for me to weigh in, now that everybody else has so thoughtfully risen to my challenge to put their predictive skills on the line. I see we run the gamut from total victory against the whole law to a doleful prediction that the mandate will stand.
Well, count me in the mushy middle. After going back and forth and around and around on this subject for months, I just can’t tell where my own analysis — and my own wish for a defeat of ObamaCare — ends and my assessment of each of the justices’ proclivities begins.
But here’s what I have come up with: I think this is going to be one of those horribly fractured decisions where observers have trouble making heads or tails of everything. I think there may even be concurrent pluralities rather than a simple majority on at least a couple of the questions presented to the court. In the end, though, I do — yes, I do — expect the mandate in this particular form, applied in this particular way, to be adjudged at least partially unconstitutional. In other words, the court will leave open the possibility that such a mandate in theory could be within the federal government’s powers, but just not THIS mandate in this form. But I think a majority may not agree on what the remedy for this abuse is, and will come up with some Rube Goldberg way of punting the ultimate decision back to lower courts or to Congress.
Meanwhile, the challenge to the Medicaid provision will fail, 6-3.
If I am right, perhaps we should be thankful for even tiny victories. But I say: “Ugh!”
Along with reformist former state official Bradley Byrne, I explained yesterday at the Mobile Press-Register how Medicaid is taking over the entire Alabama General Fund budget, and how ObamaCare makes it worse. This might have some bearing, tangentially, to the Supreme Court case on ObamaCare (the part argued last, about states being commandeered into ObamaCare Medicaid expansions).
Federal and state governments share Medicaid costs, but Obamacare by design will add millions nationwide to state Medicaid rolls while picking up the added costs only in the short term….
Before the $81 million error was discovered and before Gov. Bentley was forced to prorate the state’s budget (making across-the-board cuts due to revenue shortfalls), and even without full implementation of Obamacare, the state General Fund’s budget for Medicaid had doubled in just two years. To put this into perspective: During this two-year period, our court system was cut by a third, our criminal prosecutors’ offices by 14 percent, our Forestry Commission by 17 percent and our economic development by 5 percent. Medicaid went from consuming 20 percent of our General Fund budget two years ago to 36.5 percent this year. It is on track to consume the entire General Fund by decade’s end.
This is a big deal. And Alabama is hardly unique. It adds practical weight to the states’ arguments that they are being coerced into something they can’t afford.
There are few things more annoying than trying to compete against someone who won’t play the game.
In today’s Wall Street Journal, House Budget Chairman Paul Ryan (R-WI) expresses the frustration of many conservatives who want a real debate about the purposes of government and our ability as a nation to fund them. Ryan rightly chides President Obama for failing to engage in specifics about how to focus policymakers’ attention on the debt, not just its ceiling.
It is mystifying to me that the president continues to shut out Ryan’s “Path to Prosperity” proposal as a middle ground between bankrupting Medicare and Medicaid and eliminating them altogether.
One would think The One could see a Clintonian moment when presented. But rather than see Ryan’s willingness to preserve the social safety net for what it is – a path to a long-term bipartisan solution – the president can’t see past his own partisan nose.
Yet instead of laying out his own vision, President Obama continues to offer speeches instead of specifics. Lots of us want a debate about the ends of government, and how we structure our economy to pay for it. If the leader of the Democratic Party won’t engage in a serious debate about it, maybe the Democrats should get someone who will.
The Wall Street Journal reports that President Barack Obama’s upcoming speech about how to balance the budget will include tax increases along with cuts to programs like Medicare and Medicaid.
The call for higher taxes on America’s job creators will solidify the decision facing voters next year. The Democrats want more money, while the Republicans want less government.
If there is a positive aspect about the president showing his true tax-and-spend colors, it’s that ideology – how serious people frame reality and their decisions about it – is now front and center in politics.
Rep. Paul Ryan (R-WI) and the GOP want lower taxes and private sector growth. President Obama and the Democrats want to spend taxpayer money into an ever-growing share of GDP.
Today, Budget Committee Chairman Paul Ryan and the House Republican majority are introducing their much-anticipated 2012 budget plan. The bold proposal — “The Path to Prosperity” — is refreshingly comprehensive in addressing the nation’s debt crisis and promoting economic prosperity. According to Congressman Ryan:
For starters, it cuts $6.2 trillion in spending from the president’s budget over the next 10 years, reduces the debt as a percentage of the economy, and puts the nation on a path to actually pay off our national debt. Our proposal brings federal spending to below 20% of gross domestic product (GDP), consistent with the postwar average, and reduces deficits by $4.4 trillion.
A study just released by the Heritage Center for Data Analysis projects that The Path to Prosperity will help create nearly one million new private-sector jobs next year, bring the unemployment rate down to 4% by 2015, and result in 2.5 million additional private-sector jobs in the last year of the decade. It spurs economic growth, with $1.5 trillion in additional real GDP over the decade. According to Heritage’s analysis, it would result in $1.1 trillion in higher wages and an average of $1,000 in additional family income each year.
Furthermore, Ryan’s budget cuts taxes and strengthens to the social safety net with commonsense reforms to Medicare and Medicaid and by advancing the discussion to sure up Social Security for future generations.
Simply put, the proposal is a real and comprehensive solution to a grave spending and debt crisis that threatens America’s future. Failure to act to right the nation’s fiscal ship, and now, is no longer an option. The Path to Prosperity budget deserves serious consideration, not the partisan politics as usual that has already begun.
Read more details on Ryan’s budget plan here. For the complete plan, click here (.pdf).
Republicans in Congress are currently split on whether to accept incremental budget cuts in the name of political pragmatism or to hold a hard line — and face the possibility of a government shutdown or a freeze in the debt ceiling — in the name of principle. Freshman Florida Senator Marco Rubio takes to the editorial pages of the Wednesday edition of the Wall Street Journal with a message that leaves no doubt where he stands:
“Raising America’s debt limit is a sign of leadership failure.” So said then-Sen. Obama in 2006, when he voted against raising the debt ceiling by less than $800 billion to a new limit of $8.965 trillion. As America’s debt now approaches its current $14.29 trillion limit, we are witnessing leadership failure of epic proportions.
I will vote to defeat an increase in the debt limit unless it is the last one we ever authorize and is accompanied by a plan for fundamental tax reform, an overhaul of our regulatory structure, a cut to discretionary spending, a balanced-budget amendment, and reforms to save Social Security, Medicare and Medicaid.
For months now, we’ve heard “sober” politicians tell us that it’s time to have “an adult conversation” about the size and cost of government in which “everything is on the table”. It looks like Marco Rubio is calling their bluff.
Florida Republican Governor Rick Scott unveiled his much-anticipated budget proposal on Monday in front of a crowd teeming with Tea Party activists. Slashing $4.6 billion from last year’s budget, Scott takes aim at many sacred cows. AOL News lists the five most controversial:
(1) 10% cut in education spending
(2) Eliminating 1,690 jobs from the Department of Corrections
(3) An 8,700 overall reduction in the state government workforce
(4) Tax cuts worth $4 billion
(5) A $4 billion Medicaid reform
None of these changes, however, may be as consequential as Scott’s proposal to require state public employees to start contributing 5% of their paychecks to their pensions. If state retirement funds are ever to become solvent the employees who benefit from them will have to put some money in the kitty. Scott also wants to put new state hires into a 401(k)-type retirement system, a shift that would move the state toward a pension system of defined contributions instead of defined benefits.
If Scott is successful in Florida other states might follow suit. For the sake of taxpayers in the Sunshine State and beyond, let’s hope he prevails.
On today’s Foundry blog at the Heritage Foundation there is a crisp analysis of the cost-cutting decisions being weighed by states threatened with billions in rising health care costs under ObamaCare. With a massive, mandatory expansion of Medicaid rolls beginning in 2014, state budget writers are seriously considering dropping out of the Medicaid program in order to avoid bankrupting their treasuries.
Granted, it’s outrageous that the liberal elites running Washington, D.C. are forcing state governments to spend more of their taxpayers’ money on health care. After all, the States didn’t get to vote on ObamaCare. But too often in this debate there’s a simple – though difficult – solution that up until now hasn’t been mentioned.
Opt out. The only way the federal government can dictate spending and policy decisions to the states is if the states agree to the terms. Those terms are buried in the fine print of federal programs that condition receipt of federal money on compliance with federal policies. Like dramatically increasing Medicaid rolls.
Though opting out of Medicaid will be difficult because it also means losing the matching funds that come with it, the renewed control over a state’s budget should give state legislators much more room to maneuver during this era of dwindling tax receipts. Governments, like individuals, need options. Opting out of Medicaid is an important first step to regaining state sovereignty.
As we mentioned earlier today, Dr. Donald Berwick has received a recess appointment from President Obama to head the Centers for Medicare and Medicaid Services. You’ll hear a lot in the next few days from the conservative press about Berwick’s radical affection for rationing and his distaste for the free market system. Lest you think any of it hyperbolic, let the man tell you for himself:
In an absolutely chilling piece at RealClearPolitics today, Dr. Hal Scherz examines an Obama nominee who otherwise may have escaped public scrutiny: Dr. Donald Berwick, who’s been tapped by 44 to run the Center for Medicare & Medicaid Services. The picture that emerges is of an individual who makes even the most wall-eyed health care fears seem credible. Here’s Scherz, quoting Berwick in the first and third paragraphs:
“Any healthcare funding plan that is just, equitable, civilized and humane, must redistribute wealth from the richer among us to the poorer and the less fortunate. Excellent healthcare is by definition redistributional”.
Indeed, lest there be any doubt about the range of Dr Berwick’s schemes for “redistribution” – code for transferring power to the government — he makes clear how grand his vision for statist health care.
“There needs to be global budget caps on total healthcare spending for designated populations (ie-rationing)” Dr. Berwick says. “The simplest way to reach these goals is with a single payer system.”
The whole thing has to be read to be believed, but Scherz wraps it up with a nice injection of humanity:
But if Dr Berwick leaves little doubt who is going to be in charge of the redistribution, global caps, and the single payer systems, he shows with his use of words like “politically accountable” or “democratic”, the sort of verbal tic that betrays his own understanding. He seeks not broad-based, bottom-up decision-making but top-own edicts from elite panels of enlightened and, of course, “global” thinkers like himself that preempt decisions now made by doctors and their patients.
And that is what those of us who are practicing physicians find so troubling about Dr. Berwick’s nomination. We see him as a White House Rose Garden, photo-op doctor with a borrowed white coat; an academic who runs a $58 million institute, who analyzes numbers and reports and theories about populations but is now totally out of touch with his former peers and the patients that they treat every day. And this is the sobering point– Dr Berwick will not be there with us at the patient’s bedside looking them in the eye and telling them that the life saving treatment that they need is not approved because they don’t fit into the right demographic.
In his weekly Main Street column entitled “The Tax Police and the Health Care Mandate,”Wall Street Journal columnist William McGurn points out a malignant paradox within ObamaCare. Namely, that ObmaCare’s infamous individual mandate (which compels uninsured Americans to suddenly purchase insurance under penalty of prosecution) will have one of two consequences. It will either (1) penalize poorer Americans who fail – or find themselves unable – to purchase insurance by unleashing a horde of IRS enforcers upon them; or, alternatively, (2) remain lightly enforced in order to avoid punishing the poor, thereby escalating our collective taxpayer cost into the stratosphere.
The rationale behind the individual mandate, of course, is that many of ObamaCare’s provisions, such as forcing insurers to cover people with preexisting conditions, would make its total cost unaffordable unless healthier and younger uninsured Americans were required to buy coverage. McGurn notes that Obama was against this individual mandate before he was for it, opposing it during the 2008 Democrat primaries against Hillary Clinton, but unsurprisingly inserting it into ObamaCare’s provisions later on. Nevertheless, enforcing the individual mandate will require new legions of IRS agents to target Americans who refuse to either purchase insurance or pay the federal tax penalty.
Which creates the paradox. Those who consider themselves too poor to buy insurance today may still feel that way even when ObamaCare’s mandate is imposed, in which case they’ll find themselves the targets of the IRS. If, however, federal bureaucrats in their famed mercy refrain from enforcing ObamaCare’s individual mandate in order to avoid persecuting poorer Americans (just as they do not penalize failure to return census forms), the total cost of ObamaCare will far exceed what its proponents promised us while they shoved it up our… noses.
Nancy Pelosi was right about one thing, though. We’re sure finding out a lot about ObamaCare now that it’s passed.
If you are overjoyed to see the line item deductions from your paycheck flowing to the federal government, this blog post is not for you. If you have the opposite reaction, get ready to pay an additional $150 – $240 per month so the feds can pay for long term care. (Not yours directly, of course. Contra Al Gore, there is no lockbox or personal account for your tax dollars. Just an IOU written to your grandchildren.)
The reason? Taking the money helps ease the burden on Medicaid for all those future bed-ridden citizens unable to care for themselves. Perhaps the worst thing about this program isn’t the increase in taxes; it’s the replacing of family with government as the comfort care provider of last resort. Not only will people be told to look to government for their pensions, but also for their end-of-life needs. Under Obamacare, taxpayer dollars are going to fund abortions and end-of-life care. Credit Democrats for this: in one bill they managed to extend government intrusion from the womb to the tomb.
As desperation to pass ObamaCare grows, so do the number of peripheral schemes.
Today’s, according to the AP, is an Obama plan to hire bounty hunters, “in this case…private auditors armed with sophisticated computer programs to scan Medicare and Medicaid billing data for patterns of bogus claims. The auditors would get to keep part of any funds they recover. The White House said a Medicare pilot program recouped $900 million for taxpayers from 2005-2008.”
Well, we have questions: Wasn’t 2005-2008 during the Bush administration? Where’s Obama’s union scam for this one? Can you picture “Dog” wearing a green eye shade running his “sophisticated computer program?”
As discussed previously by CFIF, Representative Paul Ryan (R-WI) is getting some much deserved attention for his path breaking proposal, “A Roadmap for America’s Future.” The Roadmap lays out a comprehensive vision for matching spending on federal entitlements like Medicare, Medicaid, and Social Security with tax receipts. In other words, it offers specifics on the GOP’s long-stated aim to make government live within its means.
Of course, proposing an elegant, tough-minded legislative solution in an election year doesn’t win many co-sponsors. In Ryan’s case, he’s got 9. The folks at Newsweek noticed and are calling out Republicans for their lack of agreement on a substantive way forward. Being a man of substance and conviction isn’t easy in Washington, D.C., especially for a member of Congress. That Paul Ryan is willing to put his policies where his rhetoric is deserves not only a nod, but broad based conservative support as well.
While options for defeating health care “reform” are dwindling for congressional Republicans, there may be another, better collection of politicians to derail the federal government’s looming takeover: state governments. It bears remembering that for all the talk of health care being a human right, the vehicle through which it will be delivered is a voluntary agreement exchanging state sovereignty for federal dollars. Say no to the federal dollars by opting out of Medicaid, and states are free to provide health care at a price their taxpayers can afford.
That’s the gist of the argument made by two analysts at The Heritage Foundation and discussed today in an article posted on Human Events. Granted, it may seem like a health care bill passed by Congress and signed into law by the president is immediately binding on the states. But only if states refuse to opt out of Medicaid. Like all state-federal “partnerships”, state governments take federal tax dollars because it’s popular to spend money, and besides, a state might as well get back some of what it pays to Washington, right?
Maybe not. Instead, governors and state legislators would do well to seriously consider saying “no thanks” to Uncle Sam and looking for ways to deliver the same or similar benefits using state-only dollars. According to the same Heritage Foundation study:
If all states withdraw from Medicaid, their collective savings would be $725 billion over the 2013-2019 period, but they would exceed $1 trillion over 10 years. This assumes that states will continue to spend at least 90 percent of what they spend now on Medicaid long-term care services with state-only dollars. On a state-by-state basis, every state except North Dakota would come out ahead financially by leaving Medicaid but continuing long-term care spending with state-only dollars. Of course, if North Dakota reduced its long-term care spending, it too would come out ahead.
With Senators Mary Landrieu (D-LA) and Ben Nelson (D-NE) challenging their governors to take their Medicaid carve outs or pay the full price of “reform”, now is the time for states to start thinking how to regain their status as “50 laboratories” and let all that federal tax money go to some other cause. Deficit reduction, anyone?
This morning, the Senate invoked cloture on its scheme for government-run health care. Under Senate rules, there will now be 30 hours of debate divided equally between the two parties, and then there is a strong possibility that the Senate will pass the legislation.
For Majority Leader Harry Reid, getting to this point was no easy task. The typical horse trading that takes place on Capitol Hill was on overdrive lately as Leader Reid had to beg, borrow and deal to buy off each cynical Senator.
As much as the media and politicians on the Hill excoriated Governor Rod Blagojevich for selling President Obama’s old Senate seat, buying votes is a common occurrence in the nation’s capital.
As this piece from Politico demonstrates, what happens in Senate chambers typically borders on bribery.
For example:
Senator Ben Nelson (D-NE), who was once emphatic in his opposition to ObamaCare, got $45 million in federal funds for Medicaid expansion in Nebraska. Other states were not fortunate enough to have an undecided Senator provide their state with the perks of federal largesse.
Independent/Socialist Senator Bernie Sanders (VT), who was previously opposed to the legislation, was awarded $10 billion in new funding for community health centers.
Senator Nelson (D-NE) and Senator Carl Levin (D-MI) garnered an excise tax carve-out for their states; all other states will be forced to pay the tax.
Senator Mary Landrieu (D-LA) received perhaps the most persuasive legislative nugget, a $300 million federal gift to Louisiana for Medicaid expansion.
In an attempt to rationalize this border-line legislative bribery, Senator Reid opined, “You’ll find a number of states that are treated differently than other states. That’s what legislating is all about. It’s compromise.”
Buying off votes = compromise? Selling a Senate seat = felony?
The chorus of opposition to ObamaCare is growing louder among the ranks of medical academe. Dr. Jeffrey Flier, dean of Harvard Medical School, says ObamaCare would receive a “failing grade” at Harvard.
Our health-care system suffers from problems of cost, access and quality, and needs major reform. Tax policy drives employment-based insurance; this begets overinsurance and drives costs upward while creating inequities for the unemployed and self-employed. A regulatory morass limits innovation. And deep flaws in Medicare and Medicaid drive spending without optimizing care.
His conclusion:
In discussions with dozens of health-care leaders and economists, I find near unanimity of opinion that, whatever its shape, the final legislation that will emerge from Congress will markedly accelerate national health-care spending rather than restrain it. Likewise, nearly all agree that the legislation would do little or nothing to improve quality or change health-care’s dysfunctional delivery system.
The government can’t manage to control the laws of economics like it used to.
No surprise here, but according to a new study released by the non-partisan Center for Medicare and Medicaid Studies, the House health care bill will increase health care costs by $289 billion in the next ten years.
As much as the White House talked about “bending the health care cost curve” downward, the House health care bill, H.R.3962, does the exact opposite.
For some reason the Administration can’t understand that more government spending on health care without commensurate gains in supply leads to health care inflation, driving up costs for all consumers.
By calendar year 2019, the mandates, coupled with the Medicaid expansion, would reduce the number of uninsured from 57 million, as projected under current law, to an estimated 23 million under H.R. 3962.
The estimated effects of H.R. 3962 on overall national health expenditures (NHE) are shown in table 5. In aggregate, we estimate that for calendar years 2010 through 2019 NHE would increase by $289 billion, or 0.8 percent, over the updated baseline projection that was released on June 29, 2009… The NHE share of GDP is projected to be 21.1 percent in 2019, compared to 20.8 percent under current law.
Public spending would increase under H.R. 3962 as a result of the expansion of the Medicaid program and other Medicaid changes, less the net Medicare savings under the bill. Private expenditures would be higher as well…
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