Monday, June 9, 2014

Medicaid and Medicare – A Taxing Matter

A majority of South Dakotans does not support Obamacare (Affordable Health Care Act) and did not support it when it was passed.

Senator Tim Johnson this past week in his letter to Governors reaffirmed his support of socialized medicine when he wrote to urge States including South Dakota that have chosen not to increase Medicaid coverage to do so.

Just a little history – Politically the nation was divided on the issue when Obamacare passed. It passed the U S Senate by one vote. Senator Johnson voted Yea, Senator Thune and Representative Herseth Sandlin voted Nay.

In order to receive the necessary votes to pass the bill a few controversial deals were made.. Senator Landrieu (D, Louisiana) got an additional $5 Billion in relief for Hurricane Katrina (the 2nd Louisiana Purchase), Senator Ben Nelson (D. Nebraska) got special additional  reimbursement for any additional Medicaid cost for his State, Nebraska, (the Cornhusker Kickback which was later taken out of the Act when his Constituents revolted), and Senator Bill Nelson (D. Florida) also received for Florida full federal reimbursement for any additional Medicaid cost. Florida of course is a leading State in the number residents who are senior citizens. Note Florida pays nothing for additional Medicaid costs for its eligible residents.

Sidebar – the obvious question here if this was such a good deal why didn’t Senator Johnson get an exemption for South Dakota?

(more history) Several States litigated Obamacare regarding the so called individual mandate. The U S Supreme Court ruled that it was not a mandate but a tax but additionally ruled that the federal government could not force states to participate in the Medicaid expansion.

Medicaid expansion is what Senator Johnson, Democrats in the South Dakota Legislature, the South Dakota Democrat Party, and several Democrat candidates support. Last year the South Dakota Legislature did a summer of study of Medicaid expansion and determined that while expanding Medicaid eligibility had some merit it was not something that state government could afford in the out years when federal funding would decrease. In fact it was an unfunded mandate (if the State chose to participate).

I too oppose Obamacare but as a pragmatist believes it will not be repealed. We currently have a President who would veto any repeal and currently a U S Senate (with a slight chance of change with the mid term election) that will not pass repeal. It would be very un characteristic of Washington officials of either party to vote to dis enfranchise any group from existing benefits. Rather we will see reform. Will they be Democrat or Republican or some compromise? I guess time and which political parties are in power will tell.

While I am sympathetic to the feelings of those who are preaching repeal, the horse is out of the barn. Promising repeal is just pandering.

Healthcare affordability can’t be addressed by only figuring out who pays. The real problem is fixing why it costs so much? This is much harder because instead of spending money we don’t have, we have to ask providers, insurers, trial lawyers, and others to take a hit.

Democrat U S Senate candidate Rick Weiland proposes fixing Obamacare by rolling it into Medicare. As a Medicare participant I will say it works well. What Weiland won’t tell you is that it is very expensive.

Currently the Medicare tax is 2.9% of ALL wages paid in our Country plus an additional 0.9% on all wages paid by those earning over $200,000 annually. That is a really big number. Having said that, Medicare is not paying its own way now and the Medicare trust fund is being drawn down and expects to be insolvent by 2026. Under the Weiland plan far many more people will fall under Medicare. What Rick Weiland needs to tell us is how does he propose to pay for this gigantic expansion of a broke system?

The fact is Medicare and Medicaid is already increasing our deficit. These promises cost money. Lots of it!

From a public policy perspective government health care systems are neither responsive nor efficient. Having government make personal decisions does not work well. Government and bureaucracies must make rules that treat everyone the same. This leads to less personal decision (in this case on one’s own health.)

To reverse current cost escalation and make health care more affordable people must first take primary responsibility for their health. We must become more self-reliant and less reliant on government. The current Veteran’s Administration scandal (not the first one) points how a socialized system works (or does not work.) In this case administrators receiving bonuses for seeing patients timely. When in fact records are being falsified so that bonuses are paid. It is frequently heard that the Indian Health Service, another socialized system does not work well.

Liberals cry that these systems don’t work because they do not receive adequate resources (funding). It is not the funding that needs reforming, as much at it is the cost.

Personal note – I support and believe there is a role to collectively help those that are unable to help themselves; particularly veterans with service connected disabilities, children from poor families, and the disabled.

We are not going to fix these problems by spending more.

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