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October 30 2009

State of Poverty

Nicole Kurokawa Neily

Washington is mesmerized by House Speaker Nancy Pelosi's health care proposal - given that the thing is 1,990 pages, there's certainly a lot to talk about. I admire her multifaceted approach to health care reform: injure the reader when they pick it up, then provide them with approximately enough reading material to get them through the increased wait times to see a doctor that are sure to result from such a bill. Thoughtful, indeed!

Some fun facts:

  • If you read the whole House health care bill at a rate of one page/ minute, reading it would take over 33 hours straight.
  • If you read the bill at a rate of 2 pages/ minute over an 8 hour day, the bill would take about a week and a half to read.
  • To read 1,990 pages in 72 hours, you need to read approximately 28 pages/ hour without doing anything else.
  • There are approximately 400,000 words. With an estimated 10-year cost of $894 billion, that comes out to about $2.24 million per word.

I'll be highlighting as many of the proposal's topics in the coming weeks as possible. There's a lot to cover, so buckle up, kids. Today's point of shame: Medicaid expansion.

One of the ways both the House and the Senate propose covering additional poor Americans is through Medicaid expansion. Their hearts are in the right place, but Medicaid is not a stellar program that should be expanded. For one thing, it pays providers woefully below market rates, as this Heritage Foundation study shows. Reimbursement rates are so low that in Maryland in 2007, only 900 of 5,500 dentists even accepted Medicaid patients. Fewer providers mean diminished access to care, which can have hugely harmful effects even in the case of relatively minor problems.

The Senate bill expands Medicaid to 133%; the House bill expands Medicaid to 150% of the federal poverty line. However, regardless of where the line is drawn, states will end up with bigger bills, because Medicaid is partially funded by the states and partially funded by the federal government. State budgets are already stretched thin, and any discussion of expanding Medicaid is contentious because it's viewed as an unfunded mandate. Unfortunately, further crippling state budgets will only force state legislators to raise state income taxes, property taxes, & sales taxes - yet again, hurting working families.

Speaker Pelosi, acknowledging this pending problem, made a token effort to ameliorate the situation with a temporary band-aid. Medicaid expansion above current levels will be fully funded by the federal government (with your taxpayer dollars, of course) in 2013 & 2014. From 2015 to 2019, states will pay 9% and the feds will pay 91%. Eventually, that will probably be folded into the general Medicaid funding equation.

The Congressional Budget Office estimates that Pelosi's bill would increase state Medicaid spending by $34 billion between 2010 and 2019, but increase net federal outlays for the program and the State Children's Health Insurance Program (SCHIP) by $425 billion over that same time frame.  In July 2009, Tennessee Governor Phil Bredesen (a Democrat) called the provision "the mother of all unfunded mandates" being imposed upon states. "It's a 45-year-old system originally designed for poor women and their children. It's not health care reform to dump more money into Medicaid."

State budgets will be impacted to provide subpar coverage to the poor - and all American families will be forced to pay more in taxes at the state and federal level to pay for it. We can do better. Congress must work to create sustainable reforms that will actually bring down the costs of health care and health insurance - but throwing money at it is not the way! This can be done through medical malpractice reform, reforming the tax treatment of health insurance, allowing interstate purchasing of health insurance, repealing insurance mandates, expanding access to high-deductible health insurance plans to give consumers greater control over their health care dollars. John Mackey of Whole Foods offered a good synopsis in The Wall Street Journal a few months ago.

And let's be honest: we need to address the waste, fraud, and abuse in Medicare and Medicaid before we throw one more dollar at these programs. The American people deserve that.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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