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Archive for the ‘Medicaid’ Category

I’m very worried about the burden of government spending.

Moreover, I’m quite concerned that poorly designed entitlement programs will lead to fiscal disaster.

And I’m especially irked that Obama made the problem worse by ramming through yet another misguided and costly health care entitlement.

Given this background, you can imagine that I was very interested (and depressed) to see that Veronique de Rugy of the Mercatus Center put together some very important charts and analysis based on new fiscal policy projections.

After crunching the new numbers from CBO, here’s her bottom line conclusion.

…data from the Congressional Budget Office’s (CBO) recently released update to its Budget and Economic Outlook to show the trends and components of projected revenue and outlay increases. …growing entitlement obligations and net interest payments are projected to push outlays (spending) to grow faster than revenues over much of the next decade.

She also produced a chart showing the ever-rising burden of both taxes and spending. Pay close attention to how the numbers get worse at a rapid rate over the next 10 years.

There are two important takeaways from this data.

First, it should be abundantly clear that Washington is not suffering from inadequate tax revenue. Receipts are projected to rise in nominal dollars, in inflation-adjusted dollars, and as a share of GDP.

In other words, America’s long-run fiscal problems are solely a result of a rising burden of government spending.

Second, on the topic of government spending, it’s important to understand that the problem is overwhelmingly caused by entitlement programs. Social Security is part of the problem, but the real issue is government-run healthcare.

The President claimed Obamacare would “bend the cost curve.” But he wasn’t truthful since the White House implied the legislation would bend the curve down rather than up.

Here’s a second chart showing the breakdown of various spending categories.

As you can see, the problem is entitlements. And the healthcare entitlements deserve the lion’s share of the blame.

If this chart isn’t sufficiently depressing, then keep in mind that the numbers get even worse after 2024.

Simply states, the United States is doomed to become another Greece in the absence of genuine entitlement reform.

But let’s focus just on the next 10 years. Ms. de Rugy adds some detail.

…CBO projects three large budget categories—major health care programs (consisting of Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies for health insurance), Social Security, and net interest payments on the debt—will account for 85 percent of the total increase in outlays from 2014 to 2024. Total outlays are projected to increase from roughly $3.5 trillion in 2014 to $5.8 trillion in 2024, for a total increase of $2.3 trillion. Major health care programs are projected to grow by $816 billion, which accounts for 32 percent of the total. Social Security spending will grow by $654.9 billion over the next decade, which constitutes 28 percent of the total increase in outlays.

Let’s close, though, with some good news.

The numbers in the previous charts are all based on what happens if government policy is left on autopilot.

But what happens if politicians impose a modest bit of spending restraint?

According to the latest CBO forecast, inflation is supposed to average almost 2 percent over the next 10 years. So if some sort of spending cap is imposed and outlays “only” grow by a commensurate amount, it turns out that there’s a remarkably quick change in America’s fiscal profile.

As seen in this chart, there’s a budget surplus by 2019. And more important, government spending by 2024 is about $1.5 trillion lower than it would be with the budget left on autopilot.

Here’s a video from a few years ago. The numbers are out of date, but the underlying analysis is still completely appropriate. Simply stated, it’s very easy to balance the budget if politicians simply follow the Golden Rule of spending restraint.

P.S. Since this was a somewhat depressing topic, let’s close with some humor.

A few years ago, I shared a satirical application form for bailout money from Uncle Sam. Well, the New Yorker has an application quiz for Syrian rebels seeking American dollars.

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Since I primarily work on fiscal policy, I normally look at the budgetary impact of entitlement programs. And the numbers are very grim.

But I’m also an economist, so I periodically comment on how government intervention undermines the efficient functioning of markets in the healthcare field.

Last but not least, I’m also a taxpayer, so I can’t resist occasionally expressing my frustration at how the government is a giant pinata of waste fraud and abuse. And government-run healthcare seems especially vulnerable.

Huge amounts of money bilked from taxpayers for supposed counseling sessions financed by Medicare and Medicaid.

Medicare getting scammed to pay for plastic surgery.

Russian diplomats scheming to get their healthcare costs covered by Medicaid.

We now have another example to add to the list.

The Washington Post has an excellent expose on how government incompetence has made Medicare a prime target for fraudsters and other crooks.

…in a Los Angeles courtroom, Bonilla described the workings of a peculiar fraud scheme that — starting in the mid-1990s — became one of the great success stories in American crime. The sucker in this scheme was the U.S. government.The tool of the crime was the motorized wheelchair. The wheelchair scam was designed to exploit blind spots in Medicare, which often pays insurance claims without checking them first. Criminals disguised themselves as medical-supply companies. They ginned up bogus bills, saying they’d provided expensive wheelchairs to Medicare patients — who, in reality, didn’t need wheelchairs at all. Then the scammers asked Medicare to pay them back, so they could pocket the huge markup that the government paid on each chair. …The government paid. Since 1999, Medicare has spent $8.2 billion to procure power wheelchairs and “scooters” for 2.7 million people. Today, the government cannot even guess at how much of that money was paid out to scammers.

Wow. Billions of dollars of fraud and the government to this day still can’t figure out the level of theft.

And wheelchair fraud is just a small slice of the problem.

…while it lasted, the scam illuminated a critical failure point in the federal bureaucracy: Medicare’s weak defenses against fraud. The government knew how the wheelchair scheme worked in 1998. But it wasn’t until 15 years later that officials finally did enough to significantly curb the practice. …Fraud in Medicare has been a top concern in Washington for decades, in part because the program’s mistakes are so expensive. In fiscal 2013, for instance, Medicare paid out almost $50 billion in “improper payments.”

You won’t be surprised to learn that fraud is so lucrative because the government routinely over-pays for items.

…The original equipment scam had sprung up in the 1970s, at a time when Medicare was young and criminals were still learning how to steal its money. Doctors, for example, could bill Medicare for exams they didn’t do. Hospitals could bill for tests that patients didn’t need. The equipment scam was the poor man’s way in, an entry-level fraud that didn’t require a medical degree or a hospital. …“Let me put it to you this way: An $840 power wheelchair, Medicare pays close to $5,000 for. So there’s a huge profit margin there. Huge,” said one California man who participated in a recent fraud scheme involving wheelchairs.

So this isn’t just a story about government incompetence and taxpayer ripoffs, it’s also a story which shows why third-party payer is a recipe for excessive healthcare spending.

The good news is that the wheelchair scam is slowly fading away.

The bad news is that the overall problem of a poorly designed entitlement system ensures that scammers and other crooks will simply come up with other ways to pillage taxpayers.

Today, even while the wheelchair scam is in decline, that same “pay and chase” system is allowing other variants of the Medicare equipment scam to thrive. They aren’t perfect. But they work.  In Brooklyn, for instance, the next big thing is shoe inserts. Scammers bill Medicare for a $500 custom-made orthotic, according to investigators. They give the patient a $30 Dr. Scholl’s.

Geesh.

When examining entitlements, I’ve  argued that Medicaid reform is the biggest priority.

But perhaps the rampant fraud means Medicare should be addressed first.

Though the right answer is to reform both programs, which is why I’m so pleased that the House of Representatives has approved the Ryan budget for four consecutive years, even if each new proposal allows more spending than the previous one. What matters most if that Ryan’s plan block grants Medicaid and creates a premium support system for Medicare.

Those reforms won’t eliminate waste, fraud, and abuse, but the structural reforms will make it harder for crooks to take advantage of the programs.

P.S. If you want more background information on Medicare, here’s a post that explains why the program is so costly even though seniors don’t enjoy first-class benefits.

P.P.S. And here’s my video explaining why Medicare desperately needs reform.

But keep in mind we also need reform of Medicaid and Social Security.

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When government suppresses the free market and takes over the healthcare sector, you get some really odd results.

Consider these stories from Sweden:

 A man sewing up his own leg after getting frustrated with a long wait.

The government denying a wheelchair to a double amputee because the bureaucrats decided his impairment might not be permanent.

Speaking of amputations, an unfortunate man was put on such a long waiting list that his only treatment, when he was finally seen, was to have his penis removed.

Today, we’re going to augment that list. But not with another story from Sweden, which is actually a much better country in terms of public policy than most folks realize.

Instead, we’re going to look at some great moments in government-run healthcare in both the United States and the United Kingdom.

Our first story is from the Chicago Tribune and it deals with Medicaid and Medicare spending.

But we’re not going to look at the aggregate data. Those numbers are very sobering, to be sure, and you can click here and here to learn more about that problem.

Instead, we’re going to drill down into the details and get some up-close evidence of why the programs are so costly. Simply stated, providers learn how to bilk the government.

A few years ago, Illinois’ Medicaid program for the poor noticed some odd trends in its billings for group psychotherapy sessions. Nursing home residents were being taken several times a week to off-site locations, and Medicaid was picking up the tab for both the services and the transportation.  And then there was this: The sessions were often being performed by obstetricians and gynecologists, oncologists and urologists — “people who didn’t have any training really in psychiatry,” Medicaid director Theresa Eagleson recalled. So Medicaid began cracking down, and spending plummeted after new rules were implemented.Illinois doctors are still billing the federal Medicare program for large numbers of the same services, a ProPublica analysis of federal data shows. Medicare paid Illinois providers for more than 290,000 group psychotherapy sessions in 2012 — more than twice as many sessions as were reimbursed to providers in New York, the state with the second-highest total. Among the highest billers for group psychotherapy in Illinois were three OB-GYNs and a thoracic surgeon. The four combined for 37,864 sessions that year, more than the total for all providers in the state of California. They were reimbursed more than $730,000 by Medicare in 2012 just for psychotherapy sessions, according to an analysis of a separate Medicare data set released in April.

Some of the specific examples are beyond belief. Keep in mind as you read the next passage that there are only 365 days in a year, and only about 261 workdays.

Of the Illinois OB-GYNs billing for group psychotherapy, Dr. Josephine Kamper had the highest number of sessions. She was paid for 10,399 sessions in 2012, at a cost to Medicare of $207,980. …Another OB-GYN, Lofton Kennedy Jr., billed for 9,154 group psychotherapy services. He declined to comment. The third-highest-billing OB-GYN, Philip Okwuje, charged Medicare for 8,584 group therapy sessions.  

Illinois isn’t the only place where taxpayers are getting ripped off.

A Queens, N.Y., primary care doctor, Mark Burke, was paid for more sessions than anyone else in the country — 20,841. He accounted for nearly one in every six sessions delivered in the entire state of New York in Medicare, separate data show. He did not return messages left at his office. Another large biller was Makeba Gordon, a social worker in Detroit. She was reimbursed for nearly 5,000 group therapy sessions for her 26 Medicare patients, an average of 190 each. She also billed for 2,820 individual psychotherapy visits for the same 26 patients, who allegedly would have received an average of 298 therapy sessions apiece in 2012. Gordon could not be reached for comment.

And I’m sure you won’t be surprised to learn that the bureaucracy in Washington doesn’t seem overly worried about this preposterous waste of money.

Aaron Albright, a spokesman for the U.S. Centers for Medicare & Medicaid Services, said in an email that Medicare has no policy regarding which physicians may perform group psychotherapy. During such sessions, “personal and group dynamics are discussed and explored in a therapeutic setting allowing emotional catharsis, instruction, insight, and support,” according to rules set out by one of Medicare’s contractors.

The second story comes from the United Kingdom.

Regular readers know that the government-run healthcare system in the United Kingdom is an ongoing horror story of denied care, sub-standard care, and patient brutality (click here to see some sickening examples).

You would think the U.K.’s political class would respond by trying to use money more effectively.

You would be wrong. The bureaucrats somehow have decided that tax monies should be used to finance a sperm bank, even though private sperm banks already exist.

Here are some excerpts from a report in the Daily Mail.

Britain is to get its first NHS-funded national sperm bank to make it easier for lesbian couples and single women to have children.For as little as £300 – less than half the cost of the service at a private clinic –  they will be able to search an online database and choose an anonymous donor on the basis of his ethnicity, height, profession and even hobbies. …The National Sperm Bank will be based at Birmingham Women’s NHS Foundation Trust, which currently runs an existing NHS fertility clinic and recruits sperm donors from the local population. Funded by a £77,000 Government grant, the bank will be run by the National Gamete Donation Trust (NGDT) which this year received  an additional £120,000 of public money to organise egg and sperm donation.

Some have criticized the initiative because it will purposefully increase the number of fatherless children.

…the move – funded by the Department of Health – is largely designed to meet the increasing demand from thousands of women who want to start a family without having a relationship with a man. Critics last night called it a ‘dangerous social experiment’ that could result in hundreds of fatherless ‘designer families’. …Ms Witjens rejected suggestions that children suffer adverse consequences from lacking a father figure. …Ms Witjens pointed to the removal of the reference to a ‘need for a father’ in the Human Fertilisation and Embryology Act, when taking account of a child’s welfare when providing fertility treatment.

I’m sympathetic to the argument that children do best in conventional households with fathers, but my main reaction to this story is that government shouldn’t try to either penalize or subsidize unconventional households.

And a government-sponsored sperm bank definitely falls into the latter category.

But I’m not surprised. Governments love to squanders other people’s money, and the U.K. government has considerable expertise (if you can call it that) in this regard.

Heck, the U.K. healthcare system is even financing boob jobs. But we’re not talking about reconstructive surgery for women who had mastectomies. They pay for breast augmentation for women who claim “emotional distress.”

Though maybe the U.K. government deserves a special prize. It developed a giveaway program that was so convoluted that nobody signed up to take the money.

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I had a very bad lunch today.

But not because of what I ate. My lunch was unpleasant because I moderated a noontime panel on Capitol Hill featuring Senator Ron Johnson of Wisconsin and my Cato colleague Chris Edwards.

And I should hasten to add that they were splendid company. The unpleasant part of the lunch was the information they shared.

The Senator, in particular, looked at budgetary projections over the next 30 years and basically confirmed for the audience that an ever-expanding burden of federal spending is going to lead to a fiscal crisis.

To be blunt, he showed numbers that basically matched up with this Henry Payne cartoon.

Here’s a chart from his presentation. It shows the average burden of spending in past years, compared to various projections of how much bigger government will be – on average – over the next three decades.

The Senator warned that the most unfavorable projection (i.e., “CBO ALT FISC”) was also the most realistic one. In other words, federal spending will consume a much larger share of economic output over the next three decades than it has over the past two decades.

But our fiscal outlook is actually even worse than what you see in his slide.

The Senator’s numbers are based on average spending levels over the 2015-2044 period. That’s very useful – and sobering – data, but if you look at the annual numbers, you’ll see that the trendline gives us additional reasons to worry.

More specifically, spending for the major entitlement programs (Social Security and Medicare, as well as Medicaid) is closely tied to the aging population. So as more and more baby boomers retire over the next couple of decades, spending on these programs will become more burdensome.

In other words, our fiscal problem will be much larger in 2040 than it will be in 2020.

Here are the long-run numbers from the Congressional Budget Office. The blue line is federal spending on various programs and the pink line is total spending (i.e., programmatic spending plus interest payments). And keep in mind that these numbers don’t include state and local government spending, which presumably will chew up another 15 percent of our economic output!

In other words, America will become Greece.

And don’t delude yourself into thinking that CBO must be wrong. I’m not a big fan of the Congressional Budget Office (particularly CBO’s economic analysis), but these numbers are driven by demographics.

Moreover, CBO’s grim outlook is matched by similarly dismal numbers from the IMF, BIS, and OECD.

By the way, CBO doesn’t do projections once federal government debt exceeds 250 percent of GDP, so the gray-colored trendline beginning about 2048 is not an official projections. It’s merely an estimate of the total spending burden assuming that the federal budget is left on autopilot.

Of course, we’ll never reach that level. We will suffer a fiscal crisis before that point. But when it happens to us, the IMF won’t be there to bail us out for the simple reason that the IMF’s credibility is based on the backing of American taxpayers.

And we’ll already have been bled dry!

So unless we find some very rich Martians (who are also stupid enough to bail out profligate governments), it won’t be a pretty situation. I’m not sure we’ll have riots, such as the ones that have taken place in Europe, but there will be plenty of suffering.

Fortunately, there is a solution. All we need is a modest bit of fiscal restraint so that government grows slower than the private sector. That would completely reverse Senator Johnson’s dismal long-run numbers.

And some countries have shown that multi-year periods of fiscal restraint are possible.

The real question, though, is whether politicians in America would be willing to adopt the entitlement reforms that are needed to control the long-run growth of spending.

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Last month, I nailed Bill and Hillary Clinton for their gross hypocrisy on the death tax.

But that’s just one example. Today, we’re going to experience a festival of statist hypocrisy. We have six different nauseating examples of political elitists wanting to subject ordinary people to bad policy while self-exempting themselves from similar burdens.

Our first three examples are from the world of taxation.

Here are some excerpts from a Washington Times report about a billionaire donor who is bankrolling candidates who support higher taxes, even though he structured his hedge fund in low-tax jurisdictions specifically to minimize the fiscal burdens of his clients.

Tom Steyer, the billionaire environmental activist who is spending $100 million to help elect Democrats this fall, is rallying support for energy taxes that could impact everyday Americans. But when he ran his own hedge fund, Mr. Steyer sought to help wealthy clients legally avoid paying taxes, confidential investor memos show. Mr. Steyer’s strategy included establishing funds in tax havens like the Cayman Islands and Mauritius… Mr. Steyer boasted to investors such as major universities that his hedge fund, Farallon Capital Management LLC, had a “desire not to earn income which would be taxable to our tax-exempt investors,” one internal memo reviewed by The Washington Times showed. Mr. Steyer also helped his firm’s wealthy clientele avoid the highest of U.S. taxes and penalties by establishing arcane tax shelters… Mr. Steyer is pushing for a variety of new taxes on the energy sector. In California, Mr. Steyer supports an oil extraction tax, and he is funding politicians who support taxing carbon, including Sen. Mark Udall, Colorado Democrat.

By the way, Steyer did nothing wrong, just as Mitt Romney did nothing wrong when he utilized so-called tax havens to manage and protect his investments.

But at least Romney wasn’t overtly urging higher taxes on everyone else, so he’s not guilty of glaring hypocrisy.

Speaking of international taxation, how about the behavior of Senator Joe Machin’s daughter? She’s the head of an American drug-making company, a position that almost surely has something to do with her father being a senator.  Particularly since the company gets a big chunk of its revenues from sales to the federal government.

In any event, her company has decided that it’s okay to benefit from sales to big government, but that it’s not a good idea to pay taxes for big government. Here are some blurbs from a National Journal report.

…this column happens to be about a Democratic senator from West Virginia, Joe Manchin, and his daughter, Heather Bresch, the chief executive of Mylan, a giant maker of generic drugs based outside Pittsburgh. Her company’s profits come largely from Medicaid and Medicare, which means her nest is feathered by U.S. taxpayers. On Monday, Bresch announced that Mylan will renounce its United States citizenship and instead become incorporated in the Netherlands – leaving this country, in part, to pay less in taxes.

By the way, I’m a big fan of companies re-domiciling overseas.

So long as our corporate tax system has high rates and punitive worldwide taxation, corporate expatriation is the best way of protecting the interests of American workers, consumers, and shareholders.

But it’s a bit hypocritical when the expatriating company is run by a major Democrat donor.

Our third example of hypocrisy also deals with corporate expatriation, and it’s probably the most odious and extreme display of two-faced political behavior. Here’s some of what was reported in the L.A. Times about the Secretary of the Treasury’s attack on corporate inversions.

Calling for “a new sense of economic patriotism,” a top Obama administration official urged Congress to take immediate action to stop U.S. companies from reorganizing as foreign firms to avoid paying taxes. …”What we need as a nation is a new sense of economic patriotism, where we all rise or fall together,” Lew wrote to the top Democrats and Republicans on the congressional tax-writing committees. “We should not be providing support for corporations that seek to shift their profits overseas to avoid paying their fair share of taxes,” he said. …Lew said such moves were unfair to U.S. taxpayers. …”Congress should enact legislation immediately — and make it retroactive to May 2014 — to shut down this abuse of our tax system,” Lew wrote.

Gee, big words from Mr. Lew. But too bad he didn’t say those words to himself when he was a crony capitalist at Citigroup. Why? Because he had big money parked in the Cayman Islands!

So he inverted his own funds but doesn’t want other taxpayers to have the right to make the same sensible choices.

Now let’s look at three non-tax related examples of hypocrisy.

First, we have a pro-Obamacare politician running for Congress. One of his main talking points is that his wife is an OB/GYN and he also trumpets his support for expansion of Medicaid (the government’s money-hemorrhaging healthcare program for lower-income people).

Here’s some of what was reported by the Free Beacon (h/t: National Review).

John Foust has made his wife the face of his campaign for Virginia’s 10th District. Dr. Marilyn Jerome is an OBGYN… Foust attacks his Republican opponent Barbara Comstock for opposing Medicaid expansion. Failure to expand Medicaid to rural hospitals could be “devastating,” he says. Dr. Jerome has also written in support of the Affordable Care Act on the Foxhall website, citing the Medicaid expansion as beneficial to low-income women.

But it seems that Medicaid expansion is only a good idea when other doctors are dealing with the government.

It turns out, however, that not all women can receive “compassionate reproductive healthcare” from Foxhall. The practice doesn’t accept Medicaid. …in public, Dr. Jerome is preaching the Affordable Care Act and praising the Medicaid expansion while, in her practice, she doesn’t accept it.

The message is that sub-standard government-run healthcare is okay for us peasants, but doctors who cater to the political elite in Washington want nothing to do with the program.

Sort of like the politicians and IRS bureaucrats who want to be exempted from Obamacare.

Second, it turns out that global warming alarmists use above-average amounts of energy.

Here are some tidbits from a column in the UK-based Telegraph.

People who claim to worry about climate change use more electricity than those who do not, a Government study has found. Those who say they are concerned about the prospect of climate change consume more energy than those who say it is “too far into the future to worry about,” the study commissioned by the Department for Energy and Climate Change found. …The findings were based on the Household Electricity Survey.

Not that this surprises me. I’ve previously shared evidence that elitist environmentalists want to dictate the energy consumption of ordinary people while suffering no cutbacks in their own extravagant living standards.

Third, we have a remarkable bit of political jujitsu from Martin O’Malley, the governor of Maryland, on the issue of illegal aliens. Here’s an amazing excerpt from a story in Politco (h/t: National Review).

Martin O’Malley says that deporting the children detained at the border would be sending them to “certain death” — but he also urged the White House not to send them to a facility in his own state.

Wow. Regardless of what you think about open borders, amnesty, and other immigration issues, O’Malley comes across as a craven politician. This is NIMBY on steroids.

In conclusion, I should point out that hypocrisy is not limited to leftists. I’m even harder on faux conservatives who pretend to favor small government when talking to voters but then aid and abet statism behind closed doors in Washington.

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Let’s enjoy some semi-good news today.

We’ve discussed many times why Obamacare is bad news, whether we’re looking at it from the perspective of the healthcare system, taxpayers, or workers.

But it could be worse. Writing in the Washington Post, Robert Samuelson explains that two-dozen states have refused the lure of expanding Medicaid (the means-tested health care program) in exchange for “free” federal money.

From 1989 to 2013, the share of states’ general funds devoted to Medicaid has risen from 9 percent to 19 percent, reports the National Association of State Budget Officers. Under present law, the squeeze will worsen. The White House report doesn’t discuss this. …To the White House, the right-wing anti-Obamacare crusade is mean-spirited partisanship at its worst. The 24 non- participating states are sacrificing huge amounts of almost-free money… Under the ACA, the federal government pays all the cost of the Medicaid expansion through 2016 and, after that, the reimbursement rate drops gradually to a still-generous 90 percent in 2020.

But that “almost-free money” isn’t free, of course. It’s simply money that the federal government (rather than state governments) is diverting from the productive sector of the economy.

So the 24 states that have rejected Medicaid expansion have done a huge favor for America’s taxpayers. To be more specific, Nic Horton of Watchdog.org explains that these states have lowered the burden of federal spending (compared to what it would have been) by almost $90 billion over the next three years.

By not expanding Medicaid, 24 states are saving taxpayers $88 billion over the next three years. That is $88 billion that will not be added to the national debt — debt that will not be passed on to future generations of taxpayers. On the other hand, states that have expanded Medicaid through Obamacare are adding roughly $84 billion to the national debt through 2016.

Returning to Samuelson’s column, he would like a grand bargain between states and the federal government, with Washington agreeing to pay for all of Medicaid (currently, states pay a portion of the bill) in exchange for states taking over all spending for things such as roads and education.

We could minimize this process for states and localities by transferring all Medicaid costs to Washington (or at least the costs of the elderly and disabled). To pay for it, Washington would reduce transportation and education grants to states. Let Washington mediate among generations. Let states and localities concentrate on their traditional roles of education, public safety and roads. Spare them the swamp of escalating health costs. This is the bargain we need — and probably won’t get.

I like half of that deal. I want to transfer education, law enforcement, and roads back to the state level (or even the local level).

But I don’t want Washington taking full responsibility for Medicaid. Instead, that program also should be sent down to the states as well. This video explains why that reform is so desirable.

P.S. Since we’re on the topic of Obamacare, this Chip Bok cartoon perfectly captures the essence of the Hobby Lobby decision. The left wants the mandate that contraception and abortifacients be part of health insurance packages.

Rather than exacerbate the damage of using insurance to cover routine costs, wouldn’t it make more sense to have employers simply give their workers more cash compensation and then allow the workers to use their money as they see fit?

That way there’s no role for those evil, patriarchal, oppressive, and misogynistic bosses!

I realize this might upset Sandra Fluke, but at least she has the comfort of knowing that her narcissistic statism generated some good jokes (here, here, and here).

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What’s the worst economic development during Obama’s reign?

Some would say it’s the higher tax burden.

Some would say it’s the wasteful faux stimulus.

Others would say it’s the fiscal nightmare of Obamacare.

And others would say it’s the loss of millions of workers from the labor force.

I suppose there’s no objective way to pick the most ill-conceived policy, but if you think the biggest problem is either Obamacare or falling labor force participation, then I have some very grim news that will confirm your fears.

According to new research, it appears Obamacare will drive many more people from the labor force. More specifically, the Medicaid expansion will alter – in a very destructive way – the tradeoff between labor and leisure.

Researchers Laura Dague, Thomas DeLeire, and Lindsay Leininger argue in a National Bureau of Economic Research working paper that Medicaid enrollment will lead to significant and lasting reductions in employment among childless adults. …Dague and her colleagues conclude that if the Medicaid expansion enrolls about 21 million additional adults, anywhere from 511,000 to 2.2 million fewer people will be employed. Furthermore, they argue that the Medicaid expansion will knock almost a full point off of today’s labor force participation rate — or share of the civilian population that is working — a measure of economic health that is already at its lowest point since 1977. …This research provides strong evidence for the contention that enrolling in Medicaid traps people in poverty and makes it harder for them to make their way into the middle class. Furthermore, it links the Medicaid expansion to the weakening of our nation’s economy.

By way of background, Medicaid is the federal government’s healthcare entitlement for (supposedly) poor people, while Medicare is the entitlement for old people. And, as part of Obamacare, the eligibility rules for Medicaid were dramatically weakened.

But the new research cited above shows that if you give people “free” health care, that makes them less likely to work.

Particularly when you combine that freebie with food stamps, housing subsidies, welfare, and other handouts.

That’s obviously bad news for taxpayers, who bear the direct cost of a bloated welfare state.

Welfare CliffBut it’s also bad for the less fortunate. They get trapped in a web of dependency, both because handouts reduce the incentive to work (humorously depicted here and here), band also because they face very high implicit marginal tax rates if they actually try to escape government dependency.

But Obama and other leftists probably see this as a feature, not a bug.

After all, those who are lured into being dependent on government presumably have an incentive to vote for those who give them the most goodies.

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