Last night in the State of the Union address, President Obama stated that “the only way to tackle our deficit is to cut excessive spending wherever we find it—in domestic spending, defense spending, health care spending, and spending through tax breaks and loopholes. This means further reducing health care costs, including programs like Medicare and Medicaid, which are the single biggest contributor to our long-term deficit. Health insurance reform will slow these rising costs.”
Is it possible that the President has already forgotten that the health care law included a massive expansion of the broken Medicaid entitlement? According to projected national health expenditures from the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS), Medicaid spending in 2019 will be $896.2 billion. Without the health care law, CMS projects that the amount would have been $802.4 billion.
This means that the President’s health care law will increase Medicaid spending by 12 percent or about $100 billion annually. The extra spending comes from the additional 18 million or so individuals—mostly non-disabled and non-elderly adults without children—who will now have taxpayers paying their health care bills through the Medicaid program.
Two central components of the law expand eligibility to the government-run Medicaid program and offer costly subsidies to an estimated 20 million individuals to purchase health insurance. With an increasing amount of health care subsidization, taxes will increase, but so will the demand for health care services. This problem is exacerbated because there is very limited out-of-pocket payment for Medicaid. The subsidies and the increased third-party payment will cause health spending to grow, not slow.
Medicaid is a broken program for many reasons. First, national spending on Medicaid has more than quintupled over the past two decades, and about 16 percent of the population is currently enrolled. A primary reason state budgets are out of whack is this explosive Medicaid growth and states’ responsibility to finance a portion of its programs costs.
Despite the massive increase in spending, many physicians fail to participate in the program because of low payment rates and a frustrating amount of paperwork. This causes many Medicaid beneficiaries to receive basic care services in the emergency room.
There is evidence that Medicaid provides beneficiaries with a low quality of care. A recent study from the University of Virginia found that Medicaid patients have worse surgical outcomes than individuals without insurance, even controlling for a multitude of personal characteristics.
Instead of doubling down on Medicaid and its existing structure, Washington should consider major structural reform for this troubled program. To start, the open-ended federal reimbursement of state Medicaid spending, which creates perverse incentives for states to grow their programs unsustainably, must be reformed. Then, taxpayer-financed assistance should be targeted to truly deserving individuals using market-based principles that better align incentives of providers, recipients, states, and taxpayers. This is the path to put Medicaid spending on a more sustainable course.
The President should re-read his law if he believes its passage either improved Medicaid for those on it or reduced Medicaid spending growth.
Promoting your home state is one thing but having a personal jet and billing the state $500,000 for iffy travel is a bit much. He's all for cutting social programs in a state that survives due to more federal money than it pays into Washington, but somehow cuts don't apply to him. He has a lifestyle to maintain, economic crisis be damned. It's good to be da' king.
The flight logs obtained by POLITICO indicate that Mississippi has spent more than $500,000 over the past three years on Barbour's air travel. That total does not include security and other logistical costs associated with his trips. And through a quirk in Mississippi law, whenever the governor is out of state, Mississippi must pay the lieutenant governor a salary differential as acting governor.
Barbour has reimbursed the state for a handful of flights, but he has more often scheduled obscure official business to coincide with the business of politics, according to the manifest and logs, which were obtained from the Mississippi Department of Finance and Administration under a Mississippi Public Records Act request by a Democrat who has worked in the state, who provided them to POLITICO.
Critics say the flights suggest that Barbour has continued to live the lifestyle of a highflying lobbyist as he's slashed his state's budget for government services across the board since taking office in 2004.
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