The debate over Medicaid costs
The Oklahoma Policy Institute, which advocates for government programs and increased taxpayer funding, includes a lot of useful data and detailed analysis in its communications outreach. This doesn’t, however, mean that OK Policy always has the right message.
Its officials argue that Medicaid expansion is worthwhile because they find the current system relatively inexpensive. But Oklahoma’s Medicaid program currently covers low-income children and pregnant women, seniors and persons with disabilities. The proposed expansion would add about 180,000 people, potentially including many with serious, long-term health problems. You can’t extrapolate the cost of covering a demographically broader (and potentially sicker) population by examining the costs of covering a dissimilar and narrowly tailored group.
Furthermore, in an issue briefing, OK Policy notes that Medicaid costs “have risen at a more modest pace than total health expenditures or premiums for employer-sponsored coverage” and that per capita costs for Medicaid patients “are significantly below” those for patients covered by private insurance.
But a significant reason for the difference in growth rates is that private insurance absorbs cost-shifting created by Medicaid. The market rate paid by private insurers is often up to 140 percent of Medicare rates, which means Medicare rates are unrealistically low. And Medicaid rates are even lower. In Oklahoma, OK Policy notes, Medicaid rates are 96.5 percent of Medicare rates. This points to significant cost-shifting to those with private insurance or paying out of pocket.
Trumpeting the fact that Medicaid’s costs are rising more slowly than private insurance is like bragging that your electric bill is lower when you’ve got an extension cord plugged into your neighbor’s outlet.
Exchange rate
A legislative committee says Oklahoma needs to create a state-based, free-market health insurance exchange in order to keep the feds from coming in and imposing their own exchange on the state. This recommendation, although it makes sense, was hardly a surprise. There is no support in the Republican-controlled Legislature for the edicts included in President Obama’s health care law. Health exchanges were among them. These web-based exchanges are designed to give consumers one place to shop for insurance. The federal government provided Oklahoma with a $54.6 million grant last year to establish an exchange. The state sent it back after protests from Republicans and conservatives. The committee’s report didn’t estimate how much an Oklahoma exchange would cost or how it would be paid for. So there is much work ahead. But signaling to the administration that we’re working on an exchange is a step in the right direction. Obamacare is a disaster but it’s also the law of the land for now, and states are obliged to follow it.
Senator No’s dilemma
Just about everyone knows U.S. Sen. Tom Coburn is known around Washington as “Senator No,” for the times he single-handedly has blocked what he considers wasteful federal spending and legislation funded by borrowing. In the clubby atmosphere of the Senate it’s an awkward roost — except that Coburn doesn’t care a whit about the institution’s you-scratch-my-back, I’ll-scratch-yours expectations.
Things get a little harrier when there’s an issue that attracts attention beyond the Beltway, such as legislation creating a health care package for 9/11 first responders. Coburn was opposed mostly because the spending wasn’t offset and because it bore the aroma of a new entitlement. Supporters easily morphed that position into attacks that Coburn didn’t care about first responders. Eventually, a compromise was worked out, but not before Coburn was portrayed as a heartless villain.
The issue illustrates one of Coburn’s main points about Washington: You can’t cut anything. Yes, we know the bill’s not paid for, it was said. But the first responders are sooo deserving. Guess what: The same can be said of just about every Washington program. Each has a deserving constituency. No one’s more consistent than Sen. Coburn in their opposition to that way of thinking. If it occasionally lands him in hot water from a PR standpoint, so be it. He doesn’t care much about PR, either.
Poll: Obamacare still in decline
A new poll showing Obamacare’s popularity sagging almost fails to qualify as news these days. That’s how steady the program’s decline has been. A new Kaiser Family Foundation survey shows 43 percent favor the health-care program enacted in March, while 45 percent oppose it. In the same poll last month, 50 percent were in favor. Other numbers: Just 39 percent think the program will make the country better, down from 43 percent in July. Of course, proof of the substance and accuracy of the Kaiser poll and others is seen in the number of Democratic candidates for office this fall who are making Obamacare a centerpiece in their campaigns: none that we know of. If they were, now that would be man-bites-dog news!
He said, he said
It’s a little “inside baseball,” but there’s been an interesting discussion on the blogosphere this week, the crux of which is whether columnist Paul Krugman of The New York Times did a submarine job on U.S. Rep. Paul Ryan’s fairly innovative plan to reform health care and the entitlements, including Social Security and Medicare. Krugman handled Ryan pretty roughly in a recent column, accusing the Wisconsin Republican of fraud because he didn’t have the Congressional Budget Office analyze revenue losses from his plan’s proposed tax cuts, thereby making the plan look better.
But CBO doesn’t analyze or “score” tax repercussions in proposed legislation. That’s the jealously guarded domain of the Joint Committee on Taxation. As a result, Krugman has been catching flak for not appearing to understand the different roles played by CBO and JCT, which might have had a bearing on whether he accused Ryan of hawking snake oil. As it turns out, JCT was too busy to score Ryan’s plan earlier this year and even if it did would only produce a 10-year estimate. Too short a horizon, Ryan says, for a 75-year plan. In a blog post Krugman countered that Ryan “gamed” the revenue loss analysis and could have had one if he really wanted it. <Sigh.>
Tax man cometh — not
Tax Day, April 15, is approaching. About 47 percent of Americans won’t be sweating it, though. According to the Tax Policy Center in Washington, that’s how many had no federal income tax liability for 2009. Their incomes were too low or they qualified for credits, deductions or exemptions that wiped out their bill to Uncle Sam. We’re not just talking about folks at the poverty line, either. The Associated Press reports a study by consulting firm Deloitte Tax found qualifying level for credits, such as the Earned Income Tax Credit, have grown to the point where a family of four with $50,000 in income, with two children younger than 17, won’t owe any federal tax for 2009. Of course, that’s the kind of thing that helps steam the 53 percent who have a tax bill. And it suggests the day when there will be fewer people paying taxes than those not paying them might not be far away. Then we’ll be discussing the fairness of federal tax and spending policies borne by less than half the population.
Day of conversion
By now, anyone who doesn’t know the world of TV broadcasting is supposed to change on Feb. 17 has either been in Iraq or sleeping like Rip Van Winkle. Yet it still seems to come as a surprise to some that the federal government long ago designated 02/17/09 as the day of “conversion.” That’s the date when analog TV signals are to be replaced by digital signals. Those with no satellite or cable hookup will either need a television with a digital tuner or a converter box, available at a greatly reduced price with a coupon courtesy of Uncle Sam. Ah, but those coupons are in short supply and no less a luminary than Barack Obama is worried. He wants the day of conversion postponed. If not Feb. 17, when? Other politicians are concerned that antennas will also need replacing and the government should help with that, too. Since TV viewing is being treated as a human right, why not have FCC employees go door to door like Census Bureau workers and deliver and install new digital TVs, outdoor antennas and recliners with built-in cup holders?
Talking about real money
If you think the current national debt of $10.7 trillion and rising is high, consider that Uncle Sam would be on the hook for $52 trillion if Medicare and Social Security programs were stopped tomorrow, resulting in no more payroll taxes and no further accrual of benefits. The National Center for Policy Analysis points out that the $52 trillion is in current U.S. dollars, not the amount that would be required to pay future benefits. Of course no one’s talking about stopping these programs, but an estimated $9.5 trillion is owed to current retirees, the NCPA says. Factoring in the amount to be owed to those nearing retirement and the tab swells to $20.6 trillion. By 2030, almost half of all income tax dollars will be needed to close a funding gap projected for Social Security and Medicaid. “The longer we postpone reform,” says Andrew Rettenmaier, an NCPA analyst, “the worse the financial picture becomes. Procrastinating will make the cost of reform even more painful.” Are you listening, Barack Obama?
