Obamacare

Lone Star State Considers Becoming No Medicaid State

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Gonna have to make an exception for Medicaid (maybe).

They say everything is bigger in Texas, but they may soon have to make an exception for Medicaid. In recent months, we've see state officials in Oklahoma and Nevada broach a radical idea: What if some states were to drop out of Medicaid entirely? Now Texas, which has one of the highest enrollment Medicaid programs in the country, has become the latest state to float the possibility of pulling out of its part of the joint federal-state program:

Far-right conservatives are offering that possibility in impassioned news conferences. Moderate Republicans are studying it behind closed doors. And the party's advisers on health care policy say it is being discussed more seriously than ever, though they admit it may be as much a huge in-your-face to Washington as anything else.

"With Obamacare mandates coming down, we have a situation where we cannot reduce benefits or change eligibility" to cut costs, said State Representative Warren Chisum, Republican of Pampa, the veteran conservative lawmaker who recently entered the race for speaker of the House. "This system is bankrupting our state," he said. "We need to get out of it. And with the budget shortfall we're anticipating, we may have to act this year."

The Heritage Foundation, a conservative research organization, estimates Texas could save $60 billion from 2013 to 2019 by opting out of Medicaid and the Children's Health Insurance Program, dropping coverage for acute care but continuing to finance long-term care services. The Texas Health and Human Services Commission, which has 3.6 million children, people with disabilities and impoverished Texans enrolled in Medicaid and CHIP, will release its own study on the effect of ending the state's participation in the federal match program at some point between now and January.

I still don't think this is a likely outcome, and there are a number of potential unintended consequences. Ideally, I would like to see a reform along the lines that John Hood proposed in National Affairs recently, in which the system is restructured to function more like welfare (post-reform). But if even a single state left the program, it would certainly represent a significant upset in one of the largest and most expensive entitlement programs in the U.S. And that could set the stage for badly needed reform.

More on Medicaid here and here.

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  1. I hope they do leave it. That would be fantastic for the notion of federalism, as well as a hilarious rebuke of progressives.

    Now if they could only get around to further deregulation of healthcare…

    1. If they dropped out and also allowed people to purchase out of state insurance and went to “loser pays” on malpractice they might accomplish something.

      1. “loser pays” on malpractice

        Loser pays would benefit the rich and poor while screwing the middle-class. The rich can afford to lose; the poor have nothing to lose.

        1. That’s randomly silly.

          1. why?

    2. Yeah, it would be just hysterically funny to watch people not being able to get medical care because they are too poor. More fun than taunting the homeless on a Friday night!

      1. Why do believe that only a horribly inefficient, fraud-soaked, callous gov’t program can provide medical care to the poor?

        1. *do you

      2. Well you’re more than welcome to pay out of your pocket for the medical care of some poor people. No one will stop you.

        1. Thank you Barbara Branden bot. This would work if I had the money to cover not only my own insurance but thousands of others who cannot afford it.

          1. Well maybe you should stop wasting your time posting to an internet blog and go make some more money. If you were a billionaire like Bill Gates you could help thousands. Or do you just hate poor people?

  2. But if even a single state left the program, it would certainly represent a significant upset in one of the largest and most expensive entitlement programs in the U.S.

    If we hit that bull’s eye, the rest of the dominoes will fall like a house of cards. Checkmate.

    1. “If we hit that bull’s eye, the rest of the dominoes will fall like a house of cards. Checkmate.”

      Zapp, tell me you wrote that on purpose, please. Otherwise, never, ever sit next to me on a plane.

      1. It’s a Futurama quote, dude.

      2. It’s a Futurama quote, spoken by the character Zapp Brannigan.

    2. If we hit that bull’s eye, the rest of the dominoes will fall like a house of cards. Checkmate.

      Close only counts with horseshoes and hand-grenades.

      1. Close only counts with horseshoes and hand-grenades.

        … and thermonuclear weapons.

        … Hobbit

  3. I still don’t think this is a likely outcome, and there are a number of potential unintended consequences.

    The unintended consequence of not putting the whole state in hock? Or the unintended consenquence of not having to plunder our Texan wallets to pay for someone else’s healthcare as if we were all related to each other?

    1. Suddderman is left of libertarian center.

      Just be glad he admits it and agrees with most of us on the stratagy of incrementalism.

    2. There are two potential drawbacks, from my perspective:

      1) Most of the would-be Medicaid recipients just get federal subsidies to buy private insurance through the exchanges. That could end up being a lot more expensive (to taxpayers) than Medicaid.
      2) Would-be Medicaid patients end up flooding emergency rooms. They already go to the emergency room a lot more than the privately insured. The result could just be a massive increase in uncompensated care costs, as well as bigger emergency room hangups. (Granted, as I’ve written before, ObamaCare’s Medicaid expansion is also likely to result in increased emergency-room usage. But dropping Medicaid might be even worse.)

      Barring actual reform – ie: a Hood-style overhaul or a basic block grant-oriented restructuring – there are no good options here.

      1. Agreed.

        “No good options” = status quo.

        1. Maintaining the staus quo is also a bad option, shriek.

  4. I was kinda hoping that Texas would leave the union. That whole thing was never resolved to my satisfaction.

    1. Re: rac,

      I was kinda hoping that Texas would leave the union.

      Don’t give up hope yet… Start gathering powder, ball and some flint knappings . . .

      1. Pancho Villa was the sock puppet of Woodrow Wilson!!!!

  5. I guess Texas hasn’t figured out yet that the cost of all those illegal aliens fraudulently on Medicare is more than offset by their economic contributions.

    1. Any evidence to back up that statement?

      1. http://www.cis.org/identitytheft

        Scroll down to the gray box.

        Texas ranks 4th in illegal alien ID theft; an estimated 6% of its population is illegal aliens; just over a quarter of its ID theft is for fraudulently getting jobs; and in October 2008 alone, $2.4 billion was transferred by fraudulently-employed illegals to their countries of origin.

        So it’s a good bet that: (1) uninsured illegals who’ve already snagged McJobs by using fraudulently-obtained SSN numbers probably don’t have many qualms about using the same information to latch onto the Medicaid teat, and (2) the supposedly large “economic contributions” of illegal aliens are split with their home countries, and aren’t really offsetting Medicaid costs.

        Also, if you (or your small child, as is commonly the case) happen to be one of the lucky people whom the IRS is pursuing to pay taxes on income earned by some wet…er, Central American guest who stole your identity, you probably don’t think those supposed “economic contributions” make up for the supreme pain in the ass of clearing up the theft of your SSN. I certainly wouldn’t.

        1. the supposedly large “economic contributions” of illegal aliens are split with their home countries

          Economic contributions go beyond spending the money that you earn.

          1. You’re so right. In that case, it’s perfectly OK for them to get on Medicaid and steal SSNs from infants, what was I thinking?

            1. I’m just saying that these kinds of calculations are hard to do. The net benefit/net drain argument about illegals is hard to prove one way or the other.

              Don’t worry. A few more camera shots of militant protesters waving foreign flags and carrying “this continent belongs to us” signs will add to the stories of kidnappings and beheadings by Latin American gangs to drive public opinion to the point where the open border crowd voices will be undiscernable.

              1. It’s fine to argue that we ‘need’ or should allow aliens, but saying they are cost neutral is a stretch. Do the poor consume more than they produce? I would say that’s an easy yes. They have increased costs due to the nanny/welfare state, and their production ability is fairly limited due to a low productivity level. Basically we have been supplementing the incomes of those businesses that utilize illegals. And many articles I’ve read talk about the easy use of below-market labor has stifled productivity and technology advances in agriculture. They may be nice people, and most of the time good neighbors, but to argue that they are worth what the taxpayers of the state are paying is a bit disingenuous.

              2. I hope you’re right on that.

            2. Perhaps it’s not an immigration problem but a Medicaid/SS problem.

    2. Note that they’re contemplating backing out of Medicare. They’ve mentioned nothing about immigration (legal or otherwise). So unless those illegal aliens are coming to TX only for the Medicare, your point is moot.

  6. The funniest thing about the whole situation is that there is no such thing as a federal mandate.

    “We held in New York that Congress cannot compel the states to enact or enforce a
    federal regulatory program. Today we hold that Congress cannot circumvent that
    prohibition by conscripting the state’s officers directly. The federal government
    may neither issue directives requiring the states to address particular problems, nor
    command the states’ officers, or those of their political subdivisions, to administer
    or enforce a federal regulatory program. It matters not whether policy making is
    involved, and no case by case weighing of the burdens or benefits is necessary; such
    commands are fundamentally incompatible with our constitutional system of dual
    sovereignty.” [Printz v. US, USC, 117 (1997)]

    http://www.limitedgovernment.o…..rf5-21.pdf

    1. Words on paper mean nothing. USC is a living document.

  7. My solution is to let medical interns handle all Medicaid/Medicare cases and drop reimbursements by 23% (on Medicare) just like the absence of the doc fix would do anyway.

    It would save hundreds of billions and also punish the aging Teabagger “Keep yer goddamn government hands off my Medicare” crowd.

    Darwin would approve.

    1. Oh shriek, you so crazy.

    2. Don’t the interns already handle all Medicaid/Medicare cases? oh, except for those handled by physician’s assistants, of course. And rightly so, for the majority of complaints.

      1. uhh, no. This is only anecdotal but my two Medicare recipient parents dedicate 3-4 days a week with their docs. And if they don’t like anything the doc says they “doc shop” for weeks.

  8. There’s a lot of things we should do to reform medidicine, and I like some libertarian solutions – like reducing/eliminating certain regulations on drugs and practices (letting LPN’s give exams, etc.), but throwing the poor off of their medicare is a really shitty thing to do.

    1. their medicare

      So much can be said with just two words.

    2. I like some libertarian solutions

      but throwing the poor off of their medicare is a really shitty thing to do.

      Federal block grants based on population. This would take away the incentive for states to spend and spend and spend and force them to think about the money they are flushing down the toilet.

  9. This won’t happen. Dropping out would mean losing the federal matching funds, in the billions. Any state would have to cut the total Medicaid payments by something like 70% to cover those lost funds. I dunno what kind of superminimalist coverage you could provide for that, but it would be brutally thin.

    Dropping coverage for acute care is insane. That’s the one thing they should cover. Those people will still come to the hospitals via the ER, and the hospitals will still provide care. They have to; its a federal law. Without Medicaid to provide some financial support, hospitals will either close altogether, or close their ERs.

    And, Texans will still be paying federal Medicaid taxes. Only now, not one penny of those billions will come back to the state.

    So, you’re looking at a deadweight loss of billions of dollars from the state, hospitals closing all over the place, physicians flat out refusing to see (former) Medicaid patients.

    It needs to be fixed, but this approach isn’t going to get it done.

    1. physicians flat out refusing to see … Medicaid patients

      That already happens. Not jacking around with Medicaid bureaucratic BS saves money.

      1. Yep, and if you go to a non-Medicaid doc, you get an appointment same day, and are actually seen by the fellow.

        /Hands off my HSA

        1. It’s damn curious, isn’t it?

    2. I am astounded that I agree with Dean’s practical logic here.

      I might retire from H&R now.

    3. This was always the biggest argument against health care reform to begin with. People already get care, even if the system is inefficient. In other words, we’re already paying for universal health care. Replacing it with an even more inefficient and expensive system is just crazy.

    4. “So, you’re looking at a deadweight loss of billions of dollars from the state, hospitals closing all over the place, physicians flat out refusing to see (former) Medicaid patients.”

      That assumes Texas won’t come up with an alternative plan to take care of its poorest citizens. Before LBJ’s “great society,” the poor received care in a number of ways–charitable institutions, pro bono work by doctors, and funding from the states and localities without federal funding and strings attached. If Texas opted out, it would have to find solutions, but it could do so without worrying about the Feds. The real problem is that most state and local officials treat federal money in the same way that a junkie treats any other drug–debasing themselves anyway necessary to get their next fix. If Texas got clean and sober, it may well find out that it did not need the billions in the first place.

  10. Like “fuck” and “you”, self-centered bot

  11. I still don’t think this is a likely outcome, and there are a number of potential unintended consequences.

    John you are wrong. Sudderman is not reason’s new Weigel….but yes he is reason’s new left of your average libertarian columnist.

    Pete…congratulations…you earned your cocktail party invites…and didn’t have to be a piece of shit hack to get em.

    My hat is off to you good sir.

  12. If you took the Federal and State money from Medicaid out of a state, in theory, would the cost of services go down? Or would all the Docs just move to places that will pay them nomatter what.

  13. This will come down to whether Texas Republican legislators feel they will get more votes by balancing their budget and maybe cutting taxes than they will by trying to buy votes of poor voters with Medicaid.

  14. This would only have a chance if the Medicaid recipient received a bus ticket to say, Boston, in lieu of services.

    Let the Progressives deal with them.

  15. As a Texas resident, my main concern is if we cut Medicaid, would we get a Federal tax reduction? Doubt it, yet we will keep having to pay for other states’ matching funds. That’s the problem with federalism, they’ve gamed the system where asserting state’s rights are detrimental and likely to be unpopular.

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