[Vision2020] Mooching Off Medicaid

[Art Deco]

  [image: The New York Times] <http://www.nytimes.com/>

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March 3, 2013
Mooching Off Medicaid By PAUL
KRUGMAN<http://topics.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/index.html>

Conservatives like to say that their position is all about economic
freedom, and hence making government’s role in general, and government
spending in particular, as small as possible. And no doubt there are
individual conservatives who really have such idealistic motives.

When it comes to conservatives with actual power, however, there’s an
alternative, more cynical view of their motivations — namely, that it’s all
about comforting the comfortable and afflicting the afflicted, about giving
more to those who already have a lot. And if you want a strong piece of
evidence in favor of that cynical view, look at the current state of play
over Medicaid.

Some background: Medicaid, which provides health insurance to lower-income
Americans, is a highly successful program that’s about to get bigger,
because an expansion of Medicaid is one key piece of the Affordable Care
Act, a k a Obamacare.

There is, however, a catch. Last year’s Supreme Court decision upholding
Obamacare also opened a loophole that lets states turn down the Medicaid
expansion<http://www.nytimes.com/2012/07/29/opinion/sunday/medicaid-after-the-supreme-court-decision.html?_r=0>if
they choose. And there has been a lot of tough talk from Republican
governors about standing firm against the terrible, tyrannical notion of
helping the uninsured.

Now, in the end most states will probably go along with the expansion
because of the huge financial incentives: the federal government will pay
the full cost of the expansion for the first three years, and the
additional spending will benefit hospitals and doctors as well as patients.
Still, some of the states grudgingly allowing the federal government to
help their neediest citizens are placing a condition on this aid, insisting
that it must be run through private insurance companies. And that tells you
a lot about what conservative politicians really want.

Consider the case of Florida, whose governor, Rick Scott, made his personal
fortune in the health industry. At one point, by the way, the company he
built pleaded guilty<http://www.politifact.com/truth-o-meter/statements/2012/nov/02/priorities-usa-action/mitt-romney-and-rick-scott-both-have-medicare-frau/>to
criminal charges, and paid $1.7 billion in fines related to Medicare
fraud. Anyway, Mr. Scott got elected as a fierce opponent of
Obamacare, and Florida
participated in the
suit<http://www.examiner.com/article/obamacare-florida-s-rick-scott-latest-gop-gov-to-defect-on-healthcare-funding>asking
the Supreme Court to declare the whole plan unconstitutional.
Nonetheless, Mr. Scott recently shocked Tea Party activists by announcing
his support for the Medicaid expansion.

But his support came with a condition: he was willing to cover more of the
uninsured only after receiving a waiver that would let him run Medicaid
through private insurance companies. Now, why would he want to do that?

Don’t tell me about free markets. This is all about spending taxpayer
money, and the question is whether that money should be spent directly to
help people or run through a set of private middlemen.

And despite some feeble claims to the contrary, privatizing Medicaid will
end up requiring more, not less, government spending, because there’s
overwhelming evidence that Medicaid is much
cheaper<http://content.healthaffairs.org/content/27/4/w318.full>than
private insurance. Partly this reflects lower administrative costs,
because Medicaid neither advertises nor spends money trying to avoid
covering people. But a lot of it reflects the government’s bargaining
power, its ability to prevent price gouging by hospitals, drug companies
and other parts of the medical-industrial complex.

For there is a lot of price-gouging in health care — a fact long known to
health care economists but documented especially graphically in a
recent article
in Time magazine<http://healthland.time.com/2013/02/20/bitter-pill-why-medical-bills-are-killing-us/print/>.
As Steven Brill, the article’s author, points out, individuals seeking
health care can face incredible costs, and even large private insurance
companies have limited ability to control profiteering by providers.
Medicare does much better, and although Mr. Brill doesn’t point this out,
Medicaid — which has greater ability to say no — seems to do better still.

You might ask why, in that case, much of Obamacare will run through private
insurers. The answer is, raw political power. Letting the
medical-industrial complex continue to get away with a lot of overcharging
was, in effect, a price President Obama had to pay to get health reform
passed. And since the reward was that tens of millions more Americans would
gain insurance, it was a price worth paying.

But why would you insist on privatizing a health program that is already
public, and that does a much better job than the private sector of
controlling costs? The answer is pretty obvious: the flip side of higher
taxpayer costs is higher medical-industry profits.

So ignore all the talk about too much government spending and too much aid
to moochers who don’t deserve it. As long as the spending ends up lining
the right pockets, and the undeserving beneficiaries of public largess are
politically connected corporations, conservatives with actual power seem to
like Big Government just fine.


-- 
Art Deco (Wayne A. Fox)
art.deco.studios at gmail.com
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