The Stimulus Package: Medicaid Spending

During the Great Depression, US Senator and former progressive governor of Louisiana, Huey P. Long, made a profound statement regarding FDR's National Recovery Plan, "Every fault of socialism is found is this bill, without one of its virtues," not that there are any virtues in socialism. Long's admonishment perfectly describes the massive stimulus package which Barack Obama is now spinning as the end all be all answer to the economic crisis.

Within the American Recovery and Reinvestment Act of 2009, which passed the House and hereby referred to as the Obastimulus Pork-Chop of 2009, $112.1 billion is allocated to health care and medically related programs. Eighty-seven billion dollars, over the next two years, will be put towards federal and state Medicaid, alone.

Spending this amount of money to assist honest hardworking people who have fallen on hard times is a noble effort. One which even a fiscal hawk, such as myself, might be willing to contemplate and accept. Especially regarding the swiftness at which people are receiving pink slips and losing benefits.

Beyond the question if financially boosting Medicaid even belongs in this so-called economic stimulus package, is will it even provide the necessary help those who will need it most? Upon further investigation, you see that all the tugging of the heart strings is just a smoke screen leading to a future list of broken promises. The presently and potentially unemployed this is supposedly designed to assist may not even qualify for our expensive little jaunt into socialized medicine.

This is the eligibility requirement for Medicaid taken from the Centers for Medicaid and Medicare Services, a division of Health and Human Services.

CMS-Many groups of people are covered by Medicaid. Even within these groups, though, certain requirements must be met. These may include your age, whether you are pregnant, disabled, blind, or aged; your income and resources (like bank accounts, real property, or other items that can be sold for cash); and whether you are a U.S. citizen or a lawfully admitted immigrant.

If you haven't lost your house, burned through all your cash, and sold off all your worldly possessions (Maybe, even a child or two.), you don't qualify. Now in all fairness, this does not cover the individual state rules which might differ from the federal regulations as well as state-to-state.

Another point is Rahm Emanuel's philosophy on crisis management, "A crisis is an opportunity to do big things." Medicaid was a major disaster looming on the horizon, budgetarily speaking, even before the recession hit full bore. Nevertheless, the prime opportunity to reform this broken system is being woefully overlooked. Not one attempt is being made by Congress or the White House to correct it, just throw more money at a growing vacuous black hole.

The CMS put out a press release back in October of 2008 showing, under the current laws, Medicaid spending would outpace the economic growth over the next decade. In 2007-08 Medicaid spending increased 7.3% and is projected to grow at an average rate of 7.9% per year over the next 10 years. Economic growth, before the full impact of the recession, was estimated to be 4.8%.

Medicaid spending for 2017 will reach $674 billion, this will account for 6.9% of the GDP of the United States for that year. Also, total spending on Medicaid over the next 10 years will be an estimated $4.9 trillion. All of this is before the Obastimulized Pork-Chop of 2009 is included.

Former HHS Secretary Mike Leavitt, had some ominous words about its future state,

CMS-“This report should serve as an urgent reminder that the current path of Medicaid spending is unsustainable for both federal and state governments. We must act quickly to keep state Medicaid programs fiscally sound,” Secretary Leavitt said. “If nothing is done to rein in these costs, access to health care for the nation’s most vulnerable citizens could be threatened.”

Maybe, Rahm or the President can address why no changes, other than putting medical records online, are mentioned? Isn't this a prime opportunity to correct a horribly flawed system in a time of a crisis? You know, an opportunity to get "big things" done? I guess it's just the typical and tiresome Liberal answer, "Spending is reform."

Furthermore, noting all the concerns expressed by members of the "liberal elite," such as Barney Frank and Chris Dodd, have about the lack of over sight and regulation of TARP spending. One would think these "intellects" would have the sagacity and forethought to remit this problem by setting up a system of checks and balances to mitigate spending while providing some clarity on objectives. All we have received, as of yet, is propaganda.

As it stands, the Medicaid systems operates on the premise of state funds being matched by federal. So, the more a state spends the more federal money they receive. Likewise, this gives an unfair advantage to states who haven't practiced any fiscal responsibility. This two year spending splurge will do nothing to address the future concerns, at the state level, about their mismanagement. In fact, like most things in this boondoggle, it will make them worse over the long run.

Since the bailout is almost an inevitability, reform should be a key requirement of spending. The Heritage Foundation has provided some ideas to at least get the ball rolling.

• Set federal criteria for assistance- If Congress demands to include a bailout to state Medicaid programs, it should at the very least establish firm criteria for the states.

• Require states to submit reports and provide a plan for long-term reform-Building on the assumption of an imminent bailout, federal policymakers should also require states receiving these funds to report to the public, Congress, and the Administration on how they have used the funds to measurably improve care to those on the program.

• Restore Accountability-Congress should not throw good money after bad. But if Congress insists on writing bigger checks for state officials--again--then it should take very specific steps to require accountability on the part of state officials for any additional funds they get from the federal taxpayer.

Also, the CATO institute recently published a paper, pinpointing the exact problems of health care and offered several private sector options that are fantastic food for thought. However, due to the complexity and size of the topic we provided the link to the paper, rather than delve into it. It is an essay unto itself.

Important sites:

Read the Stimulus

No Stimulus.com