NCPA - National Center for Policy Analysis


June 19, 2009

Back in 1965, Congress erected the nation's first two monuments to health care "reform," Medicaid and Medicare.  Medicaid was described at the time as a modest solution to the problem of health care for the poor.  It would be run by the states and "monitored" by the federal government.

The reform known as Medicaid is worth our attention now because President Obama is more or less demanding that the nation accept another reform, his "optional" federalized health insurance program.  In his speech on health care to the American Medical Association (AMA), he said that opposition to it will consist of "scare tactics" and "fear mongering."

Whatever Medicaid's merits, this federal health care program more than any other factor has put California and New York on the brink of fiscal catastrophe, says columnist Daniel Henninger:

  • Spending on health and welfare, largely under Medicaid, makes up one-third of California's budget of some $100 billion.
  • In New York Gov. David Paterson's budget message, he notes that "New York spends more per capital ($2,283) on Medicaid than any other state in the country."

In his speeches, Obama makes the original vision of his "public option" insurance plan sound about as simple as driving through toll booths with an electronic pass on your windshield.  It's going to be all about "best practices" with patients "reimbursed in a thoughtful way," as if the federal government is about to become just another big Google.

Medicaid is a morass, says Henninger:

  • Since the program's inception, Congress has loaded it up every few years with more notions of what to cover, shifting about 43 percent of the ever-upward cost onto someone else's tab, mainly the states.
  • A 1988 congressional mandate requires local schools to pay for schooling and related services for disabled children, but because Congress underfunds its mandates, the states pay the rest through Medicaid.

The list of add-ons is endless, and there's little about it that is thoughtful.  Why shouldn't one think that, as with Medicare and Medicaid, the Obama Public Option in time will become an impossible fog for patients to navigate?  But unto eternity the program's administrative complexity will provide work for bureaucrats, Members of Congress, their staffs, lobbyist spouses and the "health care" establishment of foundations and economists.  And if we're honest, says Henninger, tax increases are inevitable.

Source: Daniel Henninger, "'Public Option': Son of Medicaid; Lard atop lard that only a politician or bureaucrat could love," Wall Street Journal, June 18, 2009.

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