Block party?

Not exactly.  In today's Ithaca Journal:

GOP Medicaid plan would slash N.Y. funding

WASHINGTON — A House Republican plan to convert Medicaid into a federal block grant program and repeal last year's health care reform law would remove 2.17 million New Yorkers from Medicaid's rolls by 2021, according to a new report.

New York's enrollment is around 4.8 million now and is expected to grow to 5.64 million by 2021...

What is a block grant and how would converting Medicaid into such a program change things? A block grant is a federal lump-sum payment to states, and

Because Medicaid is an entitlement program, everyone who is eligible is guaranteed a spot. The federal government, which pays for nearly 60 percent of the cost, has an open-ended commitment to help states cover costs; in return, it requires them to cover certain groups of people and to provide specific benefits. For example, children, pregnant women who meet specific income criteria and parents with dependent children must be covered.

A block grant would effectively end this open-ended approach and provide states with annual lump sums. States would be freer to run the program as they wanted. But states would also be responsible for covering costs beyond the federal allotment.

We've written numerous posts regarding Medicaid here. And you're certainly capable of reading through the rest of today's Journal story (which had one statistic that actually took my breath away: "In New York, Medicaid covers half of live births...").  And we can argue about the details ad nauseam, but in the end does it really matter? In an earlier post on Medicaid, we quoted E.J. McMahon: "This is really a measure of dependency on government." And dependency on government can be viewed as both resulting from and leading to moral hazard. And moral hazard—the disconnect between consumers of services and those who pay for them—produces an unsustainable cost spiral.

As with a lot of things, I think we're wasting time having the wrong argument.

Magnetic Medicaid

Do read the whole article in today's Ithaca Journal, but here are some highlights (or lowlights):

New York leads nation in spending on social aid

ALBANY — Here's another distinction for New York: It gets more government aid per person from social programs than any other state.

A USA TODAY analysis Tuesday found that the state's Medicaid program is the most expensive in the nation, driving the average cost of all government benefits in New York to $9,442 per person — the most in the country...

Of course, as a commenter on this piece remarked, the article almost needs "To be read last paragraph first" for the sake of clarity.  Nevertheless,

[....] spending on Medicaid, the health program for the poor, has long exceeded other states because of New York's broad initiatives and high poverty levels... 

[....] New York had to close a $10 billion budget deficit for the 2011-12 fiscal year, which began April 1. The Legislature largely adopted the recommendations of Gov. Andrew Cuomo's Medicaid Redesign Team, which will produce savings of $2.8 billion for the $53 billion Medicaid program...

[....] The program represents about 26 percent of the state's operating budget, slightly more than school aid, according to a report from the Medicaid Redesign Team.

Medicaid enrollment has soared, from 2.7 million enrollees in 2000 to 4.7 million in 2010 — fueled by an aging population and an expansion of the Family Health Plus and Child Health Plus programs for people whose incomes are too high for Medicaid benefits. (emphasis mine)

[....] The state and county governments split the cost of the state's share for the program. [E.J. McMahon, senior fellow for the conservative Empire Center for New York State Policy, said] That has blurred financial accountability and allowed state lawmakers to "buy up to a dollar's worth of political capital for 25 cents,"...

McMahon said he doesn't think the Medicaid redesign will make much of a difference. The state would have to look at eligibility to have an impact, he said....

[....] But Frank Mauro, executive director of the labor-backed Fiscal Policy Institute [and a favorite of Barbara Lifton's--tvm], said New York's Medicaid benefits are on par with neighboring states. New York has a higher poverty rate than they do, so its per capita spending exceeds other northeastern states....

So, let's just say that in the very short tern anyway, the situation is what it is.  What's the outlook for NYS particularly under Obamacare, a topic that isn't touched on apparently in the USA Today study?  According to a paper recently published by Cato, "The New Health Care Law's Effect on State Medicaid Spending: A Study of the Five Most Populous States," it's not looking good for NYS:

Unless it is repealed, the Patient Protection and Affordable Care Act of 2010 promises to increase state government obligations for Medicaid by expanding Medicaid eligibility and introducing an individual health insurance mandate for all U.S. citizens and legal permanent residents...PPACA provides states with no additional federal financial support for new enrollees among those eligible for Medicaid under the old laws. That makes increased state Medicaid spending from higher enrollments by “old-eligibles” virtually certain as they enroll in Medicaid in response to the individual mandate to purchase health insurance.

....Both Illinois and New York have the potential for considerably higher enrollments and increased expenditures.

Why are IL and NY "qualitatively different" from the other states?

Population projections for Illinois and New York (shaded) exhibit considerably greater constancy, both in population size and age composition, and suggest that Medicaid expenditures will not increase as rapidly in these two states compared with the other three states with more robust population growth and faster aging population.


The point is that you don't need to understand regression analysis in order to be able to see that while the current Medicaid situation in NYS is bad, under Obamacare as currently configured it would be even worse...and not only for fiscal reasons, but for societal reasons as well.  As E.J. McMahon says in the Journal article, "This is really a measure of dependency on government." 

And on a related note: Ace went to Andrew Breitbart's book signing, where Breitbart commented on the sheer wonderfulness of Ace commenters.  It's true that you can learn a lot from comments on internet postings, sometimes more than you learn from the original article itself.  I often recommend here that people read the comments attached to an article we link to. In fact, one of today's commenters at the Journal inspired both the title of this post and the illustration. So read the comments on the Journal article already.

Medicaid, Too

There has been an increasing amount of heat over the necessary and inevitable cuts to state aid to school districts, but I think more attention should be paid to Medicaid.  It's 40 percent of the unsustainable state budget, and it needs to be cut like everything else.

The case is laid out by Robert Brauchle today in the Utica Observer-Dispatch.

How can we go at Medicaid reform?
“I think everything has to be on the table in these tough economic times,” Sen. James Seward, [(NY-51, including Dryden)], said. “The Medicaid program in New York state is very generous, and the state has opted for many more of the options than most other states.”
There is a "duplication and fraud" group of legislators and lobbyists that insists that every mythical abuse must be expunged from the system before any "constituent services" are touched.
Nonsense.  This is just a tactic to keep anything actually meaningful off the cutting table.  If there is still that much duplication and fraud after all the years we've heard this line, then they are part of the fabric of the system in New York and the entire structure must be replaced.  There are decisions to be certain services or start from scratch; go with a statewide approach or allow options which may be made county by county.   Brauchle's piece outlines approaches and pros and cons.
But to get to the heart of the matter, consider this.  
In Erie County, 95 percent of property taxes are needed to pay for just one bill. Of the $211 million collected in 2010, approximately $201 million pays the county’s portion of Medicaid. This statistic is not only shocking, but also somewhat unbelievable. While we know the numbers are true and Medicaid costs are crippling, it is difficult to believe a county could survive when 95 percent of its property taxes pay just one bill.
How long do you think this can go on?  Is it any wonder that people are leaving?
As with schools and other sacred cows, you can be sure that the day is coming when Medicaid in New York has fewer services and is much smaller than it is now. 
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