More Republican Governors Drink Medicaid Kool-Aid|
March 4, 2013
New Jersey Governor Chris Christie has become the eighth Republican governor to
agree to expand Medicaid coverage in his state under the provisions of
Is the last line of Republican resistance to Obamacare disintegrating?
In 2011, 26 states joined a lawsuit challenging the constitutionality of the
provision of Obamacare, which forced them to participate in expanding Medicaid
coverage as a condition to continue to participate in the program.
The Supreme Court ruled in their favor last year, negating the mandatory
requirement, so it is now voluntary for states to expand Medicaid coverage.
The Congressional Budget Office still estimates that expanded Medicaid coverage,
though now voluntary rather than mandated on states, will contribute about a
third of the reduction in the number of uninsured Americans brought about by
Obamacare by 2022.
So it was assumed, once expansion of Medicaid became voluntary, that this was a
line Republican governors would not cross. Refusal of Republican governors to
play ball could be a serious setback for Obamacare to advance and plant its
But one by one, Republican governors like Christie, and just before him
Florida’s Rick Scott, are playing ball.
Christie was graphically honest in describing the perverse dynamics going on.
“…I am no fan of the Affordable Care Act (Obamacare)…I think it is wrong for New
Jersey and I think it is wrong for America…. However, it is now the law of the
land and I will make all my judgments as Governor based on what I believe is
best for New Jersey.”
By expanding the qualifying conditions for Medicaid, Obamacare opens the door,
according to the Congressional Budget Office’s latest estimate, to adding
another 11 million to the almost 68 million already in it.
Those 68 million are paid for by a combination of state and federal funds.
However, as incentive to bring in the additional 11 million, the federal
government is paying 100 percent of the costs for the first three years.
Christie and seven other Republican governors are agreeing to take the bait.
And Christie says, clear as a bell, that he is doing so even though he knows he
is strengthening a program that is bad for his country.
Assume that Christie’s assessment is correct. Multiply by fifty and we can have
fifty states agreeing to take a bribe to strengthen and advance a program that
will hurt the country.
A classic explanation for why free markets produce prosperity and socialism does
not is that individuals benefit in government run markets by taking from someone
else. In free markets, individuals benefit as result of serving others, making
everyone better off.
Medicaid violates basic management principles.
One, there is no clear institutional responsibility. It has grown through
funding from both state and the federal government. Anyone who has ever run an
organization knows that absence of clear responsibility produces bad results.
Medicaid spending has grown from .5 percent of GDP in 1970 to 2.7 percent of GDP
in 2010 and according to Medicaid’s chief actuary, “From program inception, the
cost of Medicaid has generally increased at a significantly faster pace than the
And there is no individual responsibility. Medicaid is a pure welfare program.
Participants have 100 percent of their costs covered by the government. And once
you have qualified, there is no time limit. There are no incentives to behave
and spend efficiently.
The only direction of Medicaid is to spend more and more money less and less
Delivering health care to low income Americans is a real challenge. But to keep
America great, we need to behave intelligently as well as compassionately. If we
are going to subsidize health care for the poor, it should be through some kind
of voucher to buy insurance. Not through welfare.
Meanwhile, the evil geniuses in Washington have devised a way to get even
Republican governors to buy into a welfare program they know can only hurt our
Star Parker is founder and president of CURE, the Center for Urban Renewal
and Education, a 501c3 think tank which explores and promotes market based
public policy to fight poverty, as well as author of the newly revised Uncle
Sam's Plantation: How Big Government Enslaves America's Poor and What We Can do