Tweet
With the Supreme Court ruling that states have the option to opt-out of the Affordable Care Act’s Medicaid expansion and several Republican governor already saying they will opt-out, now is a good time to push for fully federalizing the program.
Obviously, perpetuating the political fight with Red States, when the result could cost millions of people coverage, is reason enough to end the failed federal-state partnership design. But beyond politics there is a huge economic reason we should want this change. It is a frankly very bad policy and economics to have states involved in funding Medicaid.
The ACA was meant to turn Medicaid into basically a true universal social safety net program for those below a certain income level. If it is fully and properly implemented everyone who falls below 138% of the federal poverty level should automatic qualify. What this means, though, is that spending on Medicaid should spike during economic downturns and drop during good times. When unemployment rises, many of the people who lost their jobs could end up qualifying for Medicaid.
This is different from most other things the states fund like law enforcement, education, DMV, etc… where the amount that must be spent on them doesn’t really fluctuate much based on economic conditions.
This need to increase Medicaid spending in bad economic times is uniquely horrible for state budgets, because they are required to balance their budgets every year, but a slow economy means less tax revenue. Right at the time when states need to spend more, they have less to spend. Even if the states keep Medicaid properly funded, it means they will be forced to dramatically cut other public programs, such education, fire and police.
It is basic Keynesian economics that you want to increase spending especially on the social safety net programs during economic downturns. Instead, the idiotic design of Medicaid’s funding forces the exact opposite. This is the worst thing for a bad economy.
Only the federal government with its ability to run deficits is capable of this counter-cyclical spending on the social safety net when it is most needed. That is why beyond ending the political fights, it would also be best for the economy to have Medicaid completely taken over by the federal government. The current federal-state partnership design of Medicaid create unnecessary political problems, is bad policy and hurts the economy. It is well past time to fix it.
17 Comments
Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL Action
Great post. Thank you JW!
Agreed! As with DD’s post below, there is going to be a reckoning on this issue with the Red States. Especially ones like mine, (South Carolina) in where most of the population is un-employed, under employed, and completely off the radar of the Federal Government. As you all have witnessed we have some of the craziest, ill mannered representatives in the nation. It will end up being a big deal for residents of this state.
But then again, I think the Oil industry and GE, and AT&T should be nationalized as we war for them and pay them just to be.
OMG! Can’t believe I forgot the TBTF too on that Nationalization list.
Your reasoning also applies to the Affordable Healthcare Act, Jon. That is not sound Keynesian economics either. We as a country cannot afford the profligacy of allowing private insurance companies to operate between the populace and the government because of the very economies of scale which now menace state operated Medicaid programs. It simply is not going to work.
.00003% tax on all “Wall Street” transactions. The issue is how you pay for it! They are getting US to again pay for services subsidized by the taxpayer for decades, via state based exempt corporate tax status of insurers and providers, via a unconstitutional coerced financial penalty now deemed a tax, while Wall Street, Oil, Banks, corporations have decimated this republic, in the name of all mighty dollar.
There is a nexus between healthcare needs, costs and the physical illnesses a society manifest as a result of the economic stress inflicted on Americans by very powerful corporate interests. Meanwhile Congress and the Courts protect corporations, not people! It a disgusting reality many people can’t except, like a drunken drunk being told he’s a drunk. “I ain’t no drunk.” Screams the drunk! Then he steps on his own shoe’s lace and falls flat on his face….
An early happy 4th of july to you, JJ!
The should fold Medicaid into Medicare. If the feds pick up the whole tab, there is no reason to have two seperate programs.
Here, here, good one Jon. I am happy to see this getting the attention it deserves. This has got to be one of the agenda items of the left. Medicaid covers the poor and those who are falling out of the safety net. Time we did something about it. And you are 100% right about the deficit spending. the federal government can never go bust and this will work with the business cycle to automatically increase the deficit when all goes to hell, which seems to happen with unerring regularity in a capitalist economy.
Why not embrace the fact that the mandate is a tax? Next up, let the feds paya the insurance companies. Then adjust the marginal tax rates to account for it. No hurry about that, put it on a to do list. Then anyone who files a tax return gets a medical card for himself and all dependents. Instant nearly universal coverage.
Pretty soon some of the pols will be complaining about the cost. Let events take their course and we can either eliminate the insurance co or greatly control them.
Your suggestion is too reasonable and too 99% friendly to ever be considered or implemented by the corporatocracy.
Aha, I have entered the land of wishful thinking. Yes, let’s get the fully purchased govt reps to turn against their owners who got mostly all that they wanted, I would like to have seen the medical legislation to in a very different direction, but 0 wiped away Medicare and Public Option without batting an eye. PeasantParty, do you really think that the majority of the population of SC can see the connection between Medicare for all and a lifting of the health care burden for them. Now, extend the vision to the whole country. The 1% have effectively separated SS and Medicare from any real anchor to the government. Many people now see that as something that they earned, but nobody else deserves.
Coach Bill and Jon Walker both make great points.
The conservative governors do have a valid point about unfunded Federal mandates. The Feds can print money to pay for these things, while the states must raise revenues, all too often through regressive taxes.
Their objections are really that they don’t want to fund any of this. They would prefer that the poor and unemployed and the ill go away. As far as they’re concerned they only want God’s elect/elite the so called “job creators” around, not the losers ( the 99%.) They believe helping these people ( the 99%) constitutes the “moral hazard” of rewarding failure. Success in their view should be rewarded not failure. It doesn’t matter to them if the person is a poor baby or an old poor man/women, if they’re not able to make it on there own ( or if their parents aren’t fuck em.) It’s a pretty harsh way to treat your population ,but it’s what many of them actually believe.
The paperwork and coding alone would save money. Additionally this would allow the “portability” that the GOP is always whining about.
“This is different from most other things the states fund like law enforcement, education, DMV, etc… where the amount that must be spent on them doesn’t really fluctuate much based on economic conditions.”
I don’t know what state you live in but during difficult economic times these things get cut to make up for funding shortfalls.
The red states are challenging the federal government in many areas. This health care decision supports states rights. While I believe we don’t need to support the health care industry profit grabs, with true Progressives in DC we could provide some social programs the GOP obstructs. Important to break up the power of the gang of 5. Roberts gave them a trojan horse in this decision including micro-managing decisions of Congress.
That is the point they get cut. But it is even worse for things that should be getting expanded as oppose to things that should be staying relatively steady in funding level.