Posted by Leave a Commenton Wednesday, June 18, 2014 |
Chicago Tribune Ignores Risks, Downside of Medicaid Expansion
From Monique Garcia’s coverage at the Chicago Tribune of Pat Quinn signing the state’s ObamaCare-incentivized expansion of Medicaid:
Gov. Pat Quinn today signed into law a Medicaid expansion bill that will tap $2.4 billion in federal funds over the next several years to provide more health care coverage for the poor.
The money includes approximately $400 million to enroll new patients under the Affordable Care Act, pending federal approval.
Pat Quinn, as you might expect, is pretty enthused about all of this:
“We want to have an integrated system that focuses on wellness,” Quinn said. “We want to make sure that we can prevent bad things whenever possible so people are not having to pay enormous amounts of money to deal with life threatening diseases and chronic ailments that we could have dealt with earlier.”
What Garcia fails to do is include, even as boilerplate, any of the myriad concerns about both the effectiveness of Medicaid expansion, or the enormous impact it portends to have on the state’s budget. Nor does she mention any of the plethora of problems plaguing Medicaid before ObamaCare’s expansion was even on the radar.
First off, there’s reason to be wildly skeptical of Quinn’s claims here about the effectiveness of Medicaid expansion in boosting preventative care. Cato Institute health policy expert Michael Cannon recently took a look at the test case in Oregon that was positively underwhelming:
In 2008, Oregon launched an ObamaCare field test. The state handed out Medicaid slots via lottery to thousands of the very folks to whom ObamaCare opens Medicaid. Economists then studied the differences between the lottery winners and losers. The random assignment of subjects makes Oregon’s the most reliable study—indeed the only reliable study—ever conducted on the effects of Medicaid.
The results stunned and embarrassed ObamaCare supporters. Medicaid increased medical spending from $3,300 to $4,400 per person, but produced no discernible improvement in blood pressure, cholesterol, blood sugar levels, or risk of heart attacks after two years. Medicaid should have had an immediate impact on these measures, especially among the poor. Its failure to do so also casts doubt on any supposed long-term benefits from Medicaid and even ObamaCare’s subsidies for higher-income households. (Government subsidies are even less likely to improve the health of people with higher baseline access to care.) As Nicholas Kristof admits, ObamaCare supporters “oversold benefits of health insurance.”
Beyond having reason to be skeptical of the effectiveness of expanded Medicaid on quality of health, the state is also setting itself up for even greater fiscal problems. Cash-strapped Illinois is biting on the incentive of $2.4 billion in federal funding to add as many more eligible people as possible to the Medicaid rolls. But when that federal funding runs out in a few years, the state will be on the hook for the cost of services to the people they’ve enrolled.
As of 2009, Medicaid consumed nearly 20% of the state’s budget. And unpaid Medicaid bills make up a considerable portion of the state’s $5.1 billion backlog of unpaid bills. Medicaid providers in the state are looking at having more patients to serve and increased uncertainty if their bills are going to be paid. And Illinois already has one of the lowest reimbursement rates in the country. That’s leading to a decrease in the number of providers who are willing to accept Medicaid patients. And who could blame them? How long would you work for a taskmaster who pays poorly, if at all?
And the problems with Medicaid don’t stop there. More from Cannon:
Medicaid is rife with waste and fraud. It increases the cost of private health care and insurance, crowds out private health insurance and long-term-care insurance, and discourages enrollees from climbing the economic ladder. There is scant reliable evidence that Medicaid improves health outcomes, and no evidence that it is a cost-effective way of doing so.
My colleague Jagadeesh Gokhale estimates that expanding Medicaid will cost individual states up to $53 billion over the first ten years. That’s before an emboldened President Obama follows through on his threats to shift more Medicaid costs to states.
Cannon also testified before the Subcommittee on Health and Human Services in Ohio, opposing Medicaid expansion in that state. As such, the cost projections in his testimony are for the Buckeye State, not Illinois. But the concerns he raises in there are, of course, equally applicable to Illinois:
Beginning in 2017, Ohio would also begin to pick up a larger share of the cost of claims for newly eligible adults. That share would rise to 10 percent by 2019. According to one news report, “States will receive more than $9 in federal money for every $1 they spend to cover low-income residents under” the expansion.14 This offer stands, as one observer wrote, in “theoretical perpetuity.” …
[T]he federal government is likely to renege on the initial nine-to-one match. The federal debt is now $12 trillion, or 76 percent of gross domestic product. This year, the federal government will run a projected $845 billion deficit.20 Under current law, annual deficits will cause the federal debt will grow to $20 trillion by 2023. …
Since Congress tends to reverse spending cuts or tax increases before they take effect, the CBO also makes the more realistic projection that if current policies continue, federal debt will grow to $29 trillion by 2023, or 114 percent of GDP.22
It is wildly unrealistic to assume the federal government will maintain the Medicaid expansion’s nine-to-one matching rate. As a consequence, the Medicaid expansion will likely cost Ohio even more than the direst projections.
He also quotes South Carolina Governor Nikki Hayley who trenchantly sums up the problem: “The federal government likes to wave around a nine dollar match like it is some silver bullet, some extraordinary benefit that we cannot pass up. But what good do the nine dollars do us when we can’t come up with the one? And what good are any dollars when they come through a program that doesn’t allow us the flexibility to make the decisions that are in the best interest of the people?”
The PPACA’s Medicaid expansion is unaffordable given the current projections—and its actual cost is likely to exceed those projections. Perhaps more important, expanding Medicaid conflicts with the goal of delivering affordable, high-quality health care.
So, on the other side of this, Illinois could be staring down the barrel of dramatically increased Medicaid rolls driving increased state spending that consumes a larger and larger share of the state budget, while still failing to pay Medicaid providers in a timely manner.
What could possibly go wrong?
Clearly, plenty. Monique Garcia should have made that clear.
Last week, AFSCME Council 31 released a short online video taking some swings at the Illinois Policy Institute:
All in all, this is pretty ho-hum stuff, and just about what you’d expect rhetorically from AFSCME. Up to and especially including the obligatory, “Ahhhh, the boogeyman!” mention of the Koch Brothers.
But let’s take a quick look at some of the liberties AFSCME took with this video.
First up, the Chicago Tribune column from Diana Sroka Rickert. Rickert is VP of Communications at IPI, and regularly publishes a guest column in the Tribune. Here’s the freeze-frame from the video where they highlight the headline and the byline:
Notice the byline. Now look how it actually appears on the Tribune‘s website:
Just a name. No identifier. Here’s now the identifier shows up in a footer at the bottom of the column, emphasis mine:
Diana Sroka Rickert is a writer with the Illinois Policy Institute. The opinions in this essay are her own.
I’ve looked, and I can’t find where this article appears with the byline as displayed in the AFSCME video. I’m left to assume that the video image has been edited to add “a writer with the Illinois Policy Institute” behind Rickert’s name or to remove the second half of what appears in the footer, clarifying that “the opinions in this essay are her own.”
The second part is important. Rickert is not writing this piece in an official capacity for IPI. She’s expressing her own opinions. I would like to imagine that AFSCME would appreciate the same courtesy being extended to their members and officials when expressing their opinions in a private-citizen capacity and not as speaking on behalf of AFSCME. Otherwise, it’s fair game to attribute everything AFSCME members say to the union itself. Things like, perhaps, this.
Also left on the cutting room floor? The real, complete thrust of Rickert’s proposal:
Lay off the entire state workforce, and close the pension system. Work with the General Assembly to open a different retirement plan for newly hired government workers, modeled after the nation’s most popular retirement vehicle: the 401(k). Then offer to rehire state workers under the new retirement plan.
Guess they forgot to mention that whole “hire them all back part.” Oops.
Overall, there’s no sourcing for anything in this video. Most political campaign ads include some kind of citations where, if you’re really interested, you can go find and examine their justification for the claims being made. But AFSCME doesn’t tell you where you can find any context for what they’ve chosen to excerpt here.
For example, they’ve attributed the words “abandon pensions” to IPI CEO John Tillman. A quick Google search for John Tillman “abandon pensions” returns no results. And even if I stipulate that Tillman has said these two words consecutively at some point in time, there’s no way to access any greater context for those remarks. They’re two words. I imagine if we went back through the statements of AFSCME officials we could have some tremendous fun excerpting two-word phrases out of context from their greater statements.
Later on, the video asserts that IPI’s agenda is to “Wipe Out Unions.” Their justification for this claim is this:
Establishing local right-to-work zones = “wipe out unions?”
First of all, we’re only talking about localized right-to-work zones. In this particular case, this is about legislation that was approved in Lincolnshire that only governs that village. Simply put, there are unions within right-to-work zones. There are 26 right-to-work states in the country, including union-heavy Michigan. There are unions existing and operating within all of those states. The only difference is that there are no closed shops. No one has to join a union (or pay tribute) in order to take a job and work in those states. They can choose to. But they’re not compelled against their will.
Claiming the establishment of local right-to-work zones is tantamount to “wiping out unions” is absurd, and pretty self-indicting the part of the unions. What they’re really saying is that they believe when people are extended a choice on whether or not to join a union, people will overwhelmingly choose not to join, thus resulting in the union being “wiped out.” They’re saying that they themselves believe unions are only sustainable when people are coerced and compelled into joining and supporting them. What does that say about unions?
If this is really the best that AFSCME has to offer, then that’s pretty weak sauce.
There are plenty of people who are disenchanted with the current election cycle. But I think it’s safe to say that Reboot Illinois publisher and Chicago Sun-Times columnist Madeleine Doubek is not looking forward to this fall’s state contestso:
Why should we care about what happens in contested state legislative races all over the state this year? Each really is about the battle for control between GOP Gov. Bruce Rauner and Democratic House Speaker Michael Madigan. You knew that, but perhaps you didn’t realize we all will lose no matter who wins.
I can empathize with the general feeling. I’ve accepted that, for me, this year’s presidential election ends in tears no matter what happens. I’ve taken to describing it as the Alien vs. Predator election. Whoever wins… we lose:
Anyway, let’s get to why Doubek thinks this:
Every election cycle, there typically are a couple dozen hotly contested state legislative races, even after one political party or the other gets done rigging maps in their favor. Each party in both chambers has seats they can swipe from the other side. It’s in those races, traditionally, where most of the money is raised and spent.
This year is no different. But where it has changed, is that Republicans now are energized because of GOP Gov. Bruce Rauner. Rauner changes the political landscape in Illinois with his determination to shake up Springfield and his bottomless checking account. After years and years of failure, Republicans have their best shot in decades at winning the nuclear arms race that is funding and winning campaigns. …
Rauner shook up Springfield all right. Now, instead of one dictator, we now have two.
Rauner and Madigan control how much money goes into the key races like never before.
Tthe importance of money to political elections is generally overstated. Yes, it’s important. But it’s not everything. If you think money is everything, be sure to tell that to people like Republican Presidential nominee Jeb Bush or Illinois U.S. Senator Blair Hull. Or Bryce Benton, who challenged State Sen. Sam McCann, backed by a large amount of money, and lost by a sizable margin. They’re all examples that spending all the money in the world can’t make people vote for you if they don’t want to.
And the “dictator” line is just ridiculous hyperbole.
But this general consternation over how much money is being spent in Illinois political races, of the type being expressed here by Doubek, seems to be a recent phenomenon. And, at that, one prompted mostly by Gov. Bruce Rauner’s regular and significant investments in Republican candidates and infrastructure.
But for years, House Speaker Mike Madigan was the central bank of political contributions in the state. He controlled a fortune that was doled out to the candidates of his choice. And yet, it seems that far fewer people ever batted an eye at that hegemonic control of the campaign purse than they are at Rauner’s attempts to level the playing field for Republican candidates.
How can we constituents fight to be heard when the politicians all owe their jobs to Madigan and Rauner?
I’d say they can be heard in that there’s an alternative to Madigan’s singular control over politics in this state. At least there’s an alternative. And I think she gives far too little credit to voters, assuming they don’t know what they’re buying, or what is generally at stake in this election.
We’ll find out in a few weeks time what the voters think.
If there is one thing that Chicagoland politicians are good at, it’s finding all kinds of new and creative ways to separate you from your hard-earned money. Take, for example, Cook County Board President Toni Preckwinkle, who has the benefit of being viewed as reasonable and competent by far too many people mostly because she’s not Todd Stroger. According to Fran Spielman of the Chicago Sun-Times, she’s currently mulling a tax on soda and other sugary drinks as a desperation ploy to try to close the county’s budget gap:
County Board President Toni Preckwinkle is “looking hard” at a new tax on sugary soft drinks — anywhere from half a penny to a full penny an ounce — to close a $174.3 million budget shortfall without employee layoffs, sources said Tuesday. …
Now, Preckwinkle is returning to another controversial revenue idea she considered last year: a tax on sugary soft drinks long championed by public health advocates to curb obesity and diabetes that drives burgeoning health care costs.
Anything to avoid admitting the need for structural reform, I guess.
Back when the state was considering a similar tax, I wrote about why taxing soda — and other so-called vice taxes — are inherently contradictory in rationale and just generally terrible public policy:
First, the notion that obesity is an epidemic is commonplace but also grossly overstated. And the idea that people aren’t aware of what the First Lady of the United States has spent the last 5-plus years working to combat is absurd.
But the bigger insult to logic and reason is the 2nd paragraph in the quoted text above. We hear this same kind of reasoning, typically from Democrats and the left, when it comes to cigarette taxes. It goes like this: “This tax increase on [cigarettes, soda, whatever] will be a good thing because that tax revenue will help fund this really, really, really important government program. And, also, by raising the price of [smoking, drinking soda, whatever] it will discourage people from doing something that really just isn’t all that good for them.”
I hope you can clearly see the problems there. Cigarette taxes, and now soda/sugary drink taxes, are seemingly the one area of life where the left will acknowledge that what you tax you get less of. You tax cigarettes, you get less smoking. You tax soda, you get less consumption of soda. You tax income/work … you get less work? Of course. Except the left usually never makes that connection on that last one. Weird.
On the other side of the argument is the notion that said cigarette or soda tax revenue is going to help pay for some critical government program. Except that typically there won’t be enough revenue generated by the tax to actually fund the program, especially when you consider the diminishing returns on the tax revenue by the higher cost of consuming the drinks. The cigarette tax that was to fund the State Children’s Health Insurance Program, or S-CHIP, had one major problem: it needed about 22 million MORE smokers in order to fully fund the program. Oops.
That’s all assuming that this tax will actually be successful in driving people to other drinks. …
For the tax to have the effect Rep. Gabel desires, to drive people to drink something other than soda or other sugary drinks, it needs to be significant enough to make it costly enough for people to seek other alternatives. Will a penny per ounce do that? Unlikely. Adding extra $.12 to a can of soda or $.20 to a bottle, or $.32 or $.64 to fountain drinks isn’t likely to be enough of a cost burden to drive people to seek alternatives. There are a whole gaggle of people who regularly shell out $4 or $5 for a coffee or cappuccino at Starbucks. Do you really think that less than a dollar of extra cost is going to make that big of a difference? For most people, again, unlikely.
Which brings us to the last big problem: the problem of acceptable alternatives. Say the tax is effective in driving people to want to buy something other than soda or the other sugar-filled drink they like. It won’t be, but let’s say it does work. What alternatives exist out there? It seems clear that most people won’t be satiated with just water. Not everyone is going to want to drink coffee instead — into which people often put a significant amount of sugar. Nor does it seem likely people will flock to tea — iced tea often being sweetened, as well.
There just doesn’t seem to be a lot of alternatives out there for people to choose from if they don’t want to bear the cost of the tax on sugary drinks. So, they’re then still likely to just bite the bullet and buy the drink they want.
This tax just isn’t significant enough to have the discouraging effects that they proponents claim to want.
Which makes the real point of this gambit clear. It’s about revenue. It’s not about a concern for people’s health. And, why is it any of Rep. Gabel’s business what people want to drink any way? It’s a clear example of politicians feigning concern for your well-being in order to regulate the minutia of your life. And, finding new and exciting ways to separate you from your hard-earned money, to boot.
It was a terrible idea then. It’s a terrible idea now. And if Preckwinkle pursues it in this year’s budget, it’s nothing more than kicking the can of real, meaningful reform down the road even further for Cook County.
If you haven’t seen it yet, the Illinois Policy Institute has a new documentary film coming out on Illinois House Speaker Michael Madigan. The trailer:
The kicker: the website for the documentary is www.MichaelMadigan.com. Which begs the question, even if he famously eschews technology, how on earth did Madigan’s team not own that URL?
Capitol Fax‘s Rich Miller is in the film. But he’s claiming that he was “duped” into participating. From Miller’s Crain’s Chicago Business column:
I was duped by a right-wing organization into appearing in what will probably be a propaganda movie. It’s my own fault. The producer claimed that while some people were pointing fingers at House Speaker Michael Madigan, his company was interested in doing a fair and balanced film about “what’s really at the center of it all.”
Two days later, I found out that the forthcoming “documentary” is backed by an arm of the well-funded Illinois Policy Institute, one of Madigan’s fiercest critics and a staunch ally of Republican Gov. Bruce Rauner. The institute’s top executive is also a close Rauner adviser. I’m not exactly popular with that group, although I have strongly supported several of its small-business initiatives in Chicago. I’m not expecting to come out of the editing room looking too well.
Such is life.
I’m curious if Miller really thinks that the film will slice and dice what he said to make him look bad, ala the modus operandi of The Daily Show. Anyway, I can’t wait to see what he had to say if he’s openly fretting that he won’t “come out of the editing room looking too well.”
As for this controversy… look, I wasn’t there. But I’ll say this much: there’s a lot of pre-judging of a film that no one has seen yet going on here. It’s hardly uncommon for documentaries to have a distinct point of view. Take a look at some of the recent Oscar winners for Best Documentary:
- 2014: Citizenfour, which is a very sympathetic look at NSA whistleblower/leaker Edward Snowden.
- 2010: Inside Job, which contends that the 2008 financial meltdown was, well, an inside job perpetrated by the corrupt financial services industry.
- 2006: An Inconvenient Truth, a very one-sided and widely disputed take on global warming/climate change featuring Al Gore.
- 2002: Bowling for Columbine, Michael Moore’s anti-gun take on the Columbine school shooting.
And those are just some of the winners. Nominees with distinct points of view have included films like Super Size Me, Jesus Camp, Sicko, Food Inc., Gasland, and plenty of others that were never nominated. If “propaganda” is now being defined as a film having a point of view, then you’d have to say all of these films are propaganda. And it’s pretty hard to judge the Madigan film, since it hasn’t been released yet. Let’s cross that critical bridge when we come to it.
But something caught my attention in the comments on the first Capitol Fax post about this story. Here’s a supposedly anonymous comment:
And Miller’s response:
Sounds awful threatening. And so much for anonymous comments being anonymous, I guess.