February
22, 2005
Medicaid is on Path to Bankrupt States
By
William Murchison
Texas
Gov. Rick Perry last week became the umpteenth -- if not
the umpty-umpteenth -- state official to warn of the financial
catastrophe awaiting us in the absence of conscientious
attempts to overhaul federally subsidized health care.
"We
are experiencing a government takeover of health care,"
said the governor.
That's
no prissy, finger-wagging ideological declaration. The state-federal
Medicaid program presently gobbles up a quarter of' Texas'
budget. From 1994 to 2003, the state's share of Medicaid
costs nearly doubled; the total state budget, by contrast,
grew 65 percent. Medicaid now pays for half of all Texas
births.
How
sweet and compassionate, you say? That's only if we view
the subsidizing of health care as the primary function of
state government. "If these trends continue," said Perry,
addressing the Texas Hospital Association, "and if federal
leaders do not make reform of Medicaid a top priority, subsidized
health care is going to one day bankrupt the states."
A
troublesome law of life asserts itself: You can't spend
money you haven't got.
All
around the country, the warning sirens have been howling.
In 2003, Tennessee overran its Medicare budget by $966 million,
New Jersey by $236 billion, New York by $1.7 billion, California
by $723 billion. Reform proposals are sprouting this winter
like golden daffodils.
Out
in California, Arnold Schwarzenegger talks of moving some
Medicaid beneficiaries to managed care. New York Gov. George
Pataki seeks $1.1 billion in Medicaid cuts. Tennessee's
Democratic governor, Phil Bredesen, says 323,000 people
must be excised from the rolls of TennCare, the state's
extravagantly generous alternative to Medicaid. Into the
program, the state presently pours fully a third of its
budget.
In
Florida, where Medicaid spending has grown an average 13
percent a year for the past six years, an especially dramatic
reform program is in the works. At the center is customer
choice.
Gov.
Jeb Bush would empower Medicaid clients to purchase specific
services from managed-care organizations, using state-supplied
premiums. Those who lead healthy lives would receive even
larger grants. The Bush plan also contemplates private flexible
spending accounts, where the owners could park tax-deductible
money for future medical expenses.
"Our
proposals," Gov. Bush said, "put the focus back on the patient
by encouraging strong patient-doctor relationships and allowing
competition in the market to drive access and quality of
care."
Florida's
Republican-controlled legislature can be expected to give
the governor most of what he seeks. (The federal government
must likewise provide some waivers.)
The
alternative: a Medicaid obligation projected at three-fifths
of state spending in just 10 years.
The
Social Security shout fest ("It's going bankrupt!" -- "No,
it's not, you liar!") might have prepared us for the grueling
challenge we confront with federal medical programs.
The
United States is beginning to pay the price, not for the
1933-41 New Deal, rather for the post-New Deal obsession
with converting relatively modest measures of government-paid
relief into costly programs of permanent social insurance.
For nakedly political reasons (voters more handsomely reward
lawmakers who give them money than they do those who withhold
it), Social Security changed from a fallback, minimal-guarantee
system into a full-fledged pension program, based on entitlement.
Benefits, and the taxes to support them, soared higher than
the Capitol dome. Came the '60s. Lyndon Johnson turned health
care into a federal entitlement.
Our
appetites proved in the end larger than the resources required
to support them. Politicians taught us -- and, oh, what
eager pupils we proved! -- to see the provision of daily
needs as a basic function of government, never mind what
our tougher, pricklier forebears had asserted to the contrary.
The
day of reckoning is at hand, and the sight isn't pretty.
Who can wonder at that? Not the growing numbers who listen
anxiously to political leaders telling us what we should
have known all along: There ain't no such thing as a free
lunch.
Copyright
2005 Creators Syndicate
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