Thursday, September 21, 2017

Hutchinson's Angle on the Graham Plan

Governor Asa Hutchinson has come out as a strong supporter of a bill sponsored by South Carolina Senator Lindsey Graham. The bill is touted as an "Obamacare Repeal". That is going too far but it does repeal many of the parts of Obamacare which were considered most onerous. That includes the individual mandate and the employer mandate to maintain coverage. The plan also gives the states far more flexibility than the original program. So I would call it an Obamacare Reform bill. It does not repeal the measure, just some specific provisions in it. It does the rest of its function in a different way. It leaves FEDGOV in the business of funding health care for able-bodied adults if the states approve it (which 31 of 50 have when FEDGOV was paying all the bills).

The nineteen states that stayed off of Obamacare, at least the Medicaid expansion for able-bodied adults part, would gain money under this bill. Those states that expanded Medicaid, like Arkansas, would lose money. All states would get money from the Feds under this program, even those that did not vote to expand Medicaid. I consider that a bad part of the plan because it gets all states hooked on federal money that is unsustainable and which the feds are not even promising past 2026. The states could either take their money in a block grant, or a specific amount per person enrolled on Medicaid. This does not count the elderly or the disabled. They would be paid under traditional Medicaid, whose costs the Governor has been aggressively attempting to cut even while spending for Obamacare Medicaid expansion has soared.

The Feds are treating those two Medicaid programs differently, but activists keep trying to lump all Medicaid together. Eventually that is going to be an issue because those two programs are actually competitors, not allies. They fund health care for two different groups of people- one the able-bodied and the other disabled and elderly. Sooner or later people with disabled children for example are going to figure out this divide- Asa Hutchinson and the politicians already have.

Here is what I know: Governor Asa Hutchinson, and really the whole Republicrat establishment in Arkansas, is in a fiscal trap if something does not change. They structured things to take as much free money from D.C. as they possibly could when D.C. was paying 100% of the bills. But that "free" money was just a trap to get states to expand Medicaid. Now the state has to start paying a share of that bill and 1) they don't have the money even if the feds match 90% and 2) the feds don't have the money to keep their empty promises and match 90% going forward.

The Graham bill will rescue the political establishment in Arkansas. Not the citizens mind you because the new plan will fail too, but it will give them cover for getting out of the old plan. The Governor noted that the Graham plan "does not require the states to spend any money". So this tells you what he is going to do. He is going to do what they have been doing- take every penny from the next generation that FEDGOV will let him have so long as the state does not have to spend any money themselves. It is still being added to our tax and debt load of course, but the entity of state government prospers regardless of what happens to the individual taxpayers within that entity. He is just concerned that his department is still able to hand out money without any of it coming from their budget. If it comes from your budget, or your children's because debt is propping up this whole thing, then it appears to be no cause for the republicrats to worry.

Yes he will have to cut benefits to do this. At this point I don't see anyway out of a reduction in benefits anyway. It is just a question of an orderly collapse or a disorderly one. The original plan was never going to work. It was only a question of whether the state would renege on its pledge to pay 10% of the new bills starting in 2020 or if the FED was going to renege on their promise to pay at least 90% of those bills. It looks like both are attempting to default on those promises now. Some of us warned them against implementing such a long term disaster in order to get the early money. Now they have raised expectations about what government is supposed to do for people, but they cannot afford to come close to meeting those expectations. I favor the Pea Ridge option but that would require politicians accepting the limitations of government action and all special interests currently making money out of government intervention in health care to take a hit, so don't hold your breath.

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