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Governor Walker’s Misleading Claims On Medicaid

Wisconsin Governor Scott Walker painted a misleading picture of Medicaid in his New York Times op-ed on Friday.  Medicaid is neither obsolete nor inflexible and changing it to a block grant, as the House Republican budget that Walker supports would do, would significantly harm the millions of seniors, people with disabilities and children who rely on it every day.

Governor Walker says Medicaid is obsolete because it is biased toward covering people in nursing homes rather than their own homes.  In fact, Medicaid is moving in precisely the opposite direction.  In 1990, just 13 percent of Medicaid spending on long-term care went for care in the community rather than in an institution.  By 2009, the figure was 43 percent.  That’s a great example of how Medicaid is changing with the times.

Moreover, health reform, (i.e., the Affordable Care Act) provides several new options to speed this trend along and continues funding for the “Money Follows the Person” program, in particular, which moves people from nursing homes back to the community.  With health reform’s new options and funding, progress will likely continue.  That won’t happen under the House Republican budget plan, which would sharply reduce funding for Medicaid and convert the program to a block grant.

My colleagues, Edwin Park and Matt Broaddus, have shown how risky a block grant is for states.  If the House Republican block grant proposal had been in place starting in 2000, their analysis shows, in 2009 Wisconsin would have received 40 percent less in federal funds – nearly $1.6 billion in that year alone.  With such a sharp drop in federal funds, the state would have been ill-equipped to deal with a recession or even to meet the ongoing needs of an aging population.

Governor Walker claims the success of the Children’s Health Insurance Program (CHIP) and state Medicaid demonstration projects show that states could do well under a Medicaid block grant, but he’s wrong on both counts:

CHIP, which does operate under a structure similar to a block grant, has a narrower purpose than Medicaid, as noted in a recent brief from the Kaiser Commission on Medicaid and the Uninsured.  It covers far fewer children than Medicaid and covers children in families with higher incomes.  Moreover, in the past, some state CHIP programs did run short of funds and had to freeze enrollment and set up waiting lists.

As to Medicaid demonstration projects, they allow states to cover people who are ordinarily not eligible for Medicaid (such as low-income, childless adults) or services that aren’t usually covered (such as short-term, or “respite,” care for families with children with complex medical conditions) as long as they don’t spend more federal funds than they otherwise would have received.  This is nothing like the Ryan block grant, which would slash the federal funds that states would otherwise get to help them run their programs, not hold federal funds steady.

By: Judy Solomon, Center on Budget and Policy Priorities, April 25, 2011


April 25, 2011 Posted by | Affordable Care Act, Gov Scott Walker, Governors, Health Reform, Medicaid, Politics, States | , , , , , , , , , , | Leave a comment

How Grover Norquist’s Pledge Blocks Real Deficit Cuts

Eli Lehrer has an incisive piece on this page about Tom Coburn’s “Gang of Six” tax proposals. I believe however that the proposals deserve a warmer endorsement than Eli offers.

An important cause of America’s long-term debt problem is the intellectual cul-de-sac into which Republicans have driven themselves. Republicans have accepted a total ban on any kind of tax increase as party orthodoxy. And they have submitted to the authority of Grover Norquist of Americans for Tax Reform to determine what constitutes a “tax increase.”

Norquist takes the view that any action that increases the revenue column of the federal government must be deemed a tax increase – and that such increases are only permissible if they are offset by an equivalent cut to the spending column.

The trouble is that a lot of federal spending – especially the spending done by Republicans – takes the form of tax remission.

The federal government offers a tax credit of up to $9,500 for the purchase of plug-in electric cars. How exactly is that different from writing a check to every plug-in buyer? Yet canceling this program would count as a tax increase under Grover Norquist’s test.

Adopt a child and you can qualify for a tax credit of up to $13,100. You can even get credit for the cost of meals and lodging while traveling in a foreign country to receive the child. You can say a lot of things about this measure. But is it a “tax cut”? Hardly.

Enrolled in college or university? You can deduct up to $4,000 of qualified tuition expenses.

Over 65? Or disabled? Adjusted gross taxable income of less than $17,500? Tax credit for you.

And so on. The point is not that these tax expenditures are all necessarily ill-advised. (It’s genuinely more expensive to be disabled, and public money to help the disabled cope with the costs imposed on them by nature or accident seems a reasonable response by a civilized society.) The point is: they are expenditures, disguised as tax cuts.

This point – so obvious with the smaller tax expenditures – is true also of many of the larger tax expenditures, even if familiarity blinds us to the fact. Mortgage interest deductibility and the tax exclusion of employer-provided fringe benefits: these are subsidies too, no less subsidies for being widely rather than narrowly used.

Yet on the Norquist system and by the Norquist rule, the US cannot address these subsidies contained in the tax code unless and until they are simultaneously matched exactly with other subsidies and benefits that happened to have been framed as outlays. Economically, the rule makes little sense. Politically, it has the job of making deficit reduction twice as difficult as it needs to be. With consequences that …. well let’s leave that for a second post.

By: David Frum, Frum Forum, April 25, 2011

April 25, 2011 Posted by | Deficits, Politics, Taxes | , , , , , , , , , , , , | Leave a comment

RyanCare vs. The Public Option

If you want to understand why the budget debate so infuriates people who actually care about deficits — and, in particular, people who actually care about health-care spending — consider this: The central health-care reform in Paul Ryan’s budget, the one that’s got him so many plaudits for courage, would actually increase costs. The health-care reform that progressives have been pursuing for more than two years would cut them. And yet calling for Medicare to be privatized and voucherized is considered serious, while calling for a public option is considered tiresome. But let’s go to the tape.

Back during the health-care reform fight, the Congressional Budget Office looked at the likely effect of adding a public option that paid Medicare rates. “In total, a public plan based on Medicare rates would save $110 billion over 10 years,” the agency concluded. Importantly, the savings would come because premiums would be lower. The basic mechanism here is not complicated: Just as you get better deals by shopping at a mega-retailer like Wal-Mart, you get better deals by working with a mega-insurer like Medicare. Size matters.

As for Ryan’s plan, CBO’s take was just the opposite. “Under the proposal,” they said, “most elderly people would pay more for their health care than they would pay under the current Medicare system.” That is to say, health-care costs go up. Now, federal health-care spending goes down, as seniors are paying 70 percent of their costs out-of-pocket rather than 30 percent. Or, in CBO-ese, Medicare beneficiaries “would bear a much larger share of their health care costs than they would under the current program.” Of course, back in the real world, seniors are going to react poorly to being unable to afford health-care insurance, and those savings won’t manifest.

But even putting that aside, it makes for a very stark contrast. The progressive reform that won’t happen would cut health-care costs. The conservative reform that won’t happen would increase health-care costs. One idea makes insurance cheaper and one makes it more expensive. And yet the idea that makes insurance cheaper is pretty much off the table, while the idea that makes it more expensive — and that almost certainly wouldn’t work — is considered a very serious proposal worthy of brow-furrowing debate.

By: Ezra Klein, The Washington Post, April 25, 2011

April 25, 2011 Posted by | Affordable Care Act, Health Care Costs, Health Reform, Public Option | , , , , , , , | Leave a comment


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