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And Now For Something Slightly Different

For all the talk about Social Security, we haven't heard much about the other entitlement on the Bush chopping block -- Medicaid. The plan here is, in many ways, the very apotheosis of the Bush method of governance. Medicare and Medicaid are very different programs, but they both face rising costs for basically the same reason -- the development of new health care technologies leads spending on health care to go up. Medicare is hard to cut thanks to the fact that it's beneficiaries (middle class old people) are politically powerful. Medicaid, whose beneficiaries are poor, is easier to take the ax to. There's no particular justification being offered up for this round of cuts -- the plan doesn't bring about any efficiency gains or anything -- it's just going to deny people health care to make room in the budget for big tax cuts.

What's especially appealing about it from Bush's perspective is that it doesn't require him to actually take anyone's health care away. Instead, he's going to try and cut the amount of money the federal government gives to the states to spend on Medicaid. This will force state governors and state legislatures to cut people's Medicaid coverage, but since each state will have a lot of flexibility in deciding exactly who to screw over and how to screw them, the hope is that governors and state legislators will wind up getting blamed by the voters rather than the president and congress. Nowadays, of course, most governors are Republicans, and they're not going to like this. The issue in play, then, will be whether or not Republican governors have any sway over their states' congressional delegations and senators.

February 26, 2005 | Permalink


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» SocSec from CommonSenseDesk
Matt Yglesias on the impact of our president's Medicaid cuts particularly on the states and their Republican governors. [Read More]

Tracked on Feb 26, 2005 9:44:17 PM

» Red vs. Blue and House vs. Statehouse from Saheli*: Musings and Observations
This got me thinking about the red vs. blue map of governors, which rather different from the more famous red vs. blue map of the presidential election . . .It seems to me that, in terms of power, such a relationship must be almost entirely mediated ... [Read More]

Tracked on Feb 26, 2005 11:16:26 PM


Nice framing, Matt. "screw them over".

Generally, "screwing" people refers to defrauding someone of their rightful possessions.

Few would agree that taking slightly less money from person A for transferring it to person B was "screwing" person B.

Some would even claim that this would result in person A being less "screwed".

Oh well.

Posted by: am | Feb 26, 2005 6:08:15 PM

Oh, so when person B is a helpless 80-year-old with dementia, it's not "screwing her over" to dump her on the street outside the nursing home for lack of Medicaid?

The knee-jerk property rights stuff is not Magic Dissolving Oil to be applied to every gov't program in existence. What alternative is there to Medicaid, am? Here's your chance to be famous.

I know, in theory, that not all libertarian-types are either stupid or morally void, but I find fewer & fewer counterexamples. Speak up, please, libertarians-who-find-am's-moral-frivolity-hideous.

Posted by: Anderson | Feb 26, 2005 6:16:52 PM

This sort of abuse of federalism is, I believe, an uninteded consequence of the 17th amendment. Has there been any serious discussion of this problem? With senators representing the state governments instead of the people, jointly financed programs, such as medicaid, might not end up in this kind of bind.

Posted by: ac | Feb 26, 2005 7:13:51 PM


It is the central conceit of libertarians that it is mostly their own energy and intelligence that got them their wealth. No, it is the society in which they live and conduct business that is most responsible for their wealth.

Our society is a social contract. It is explicit in the Preamble to the Constitution. Besides the common defense to secure the blessings of liberty, the wise nation promotes the general welfare which helps insure domestic tranquility and justice.

Not law, not religion, not morality, not political theory endorses the the casual cruelty you profess. Shame on you.

Posted by: epistemology | Feb 26, 2005 7:57:38 PM

Matthew gives Bush too little credit. This is not about the political power of the elderly. This is a matter of principle for Bush: You have two huge medical programs sapping the federal government. Which one do you gut, and which do you expand? Bush is true to form: take from the poor and transfer to those who are better off.

Posted by: epistemology | Feb 26, 2005 8:00:54 PM


"At 100 percent tax there is no longer any incentive to work - thus no one works and nothing is provided. Everything changes."

DeLOng & Plumer were essentially discussing medical expenses, and that it didn't matter whether the cost was private or public, the cost remained the same. Follow the links.

But the quote made me laugh out loud. Only a libertarian could imagine a world where labor was taxed at 100%, so nobody worked, and nothing was produced. So I guess we all just starve to death in tax revolt.

Posted by: bob mcmanus | Feb 26, 2005 8:12:16 PM

And the Governors are going to have to take it out of the hides of their citizens in the form of higher taxes, since the Medicaid patients have to be taken care of.

Similarly, any SS reform that results in the impoverishment of seniors will have to be countered by higher state welfare budgets, since old people will not be put onto the street.

Posted by: Bob H | Feb 26, 2005 8:27:07 PM

I think some governors are (RIGHT NOW- hint, its all in the family) looking at ways to cut Medicaid spending, in the guise of "flexibility and choice." What this translates to is limiting services and capping expenses. This really screws the poorest, the sickest, and people with disabilitiies since they cost the most.

Posted by: SQ | Feb 26, 2005 9:23:36 PM

Governor Pawlenty of Minnesota is already starting to use exactly those code words for cutting Medicaid (including that for the working poor). It's no accident that (according to the NY Times), he has suddenly become a new darling of the GOP Right, and is being talked up as a Presidential candidate.

Posted by: Bruce Moomaw | Feb 26, 2005 9:31:13 PM

It's not just Republican governors. Governor Bredesen of Tennessee is trying to gut TennCare, the state's Medicaid program, and I have it on good authority that he's intimidated many segments of the progressive community in that state to get his way. He's also being mentioned for President...but he won't get much support from progressive activists outsite of TN after this.

BTW, here's a good resource on the fight to save Medicaid from these cuts, the Medicaid Action Center

Posted by: vawolf | Feb 27, 2005 12:01:53 AM

Medicaid costs aren't rising because health care costs are rising; they're rising because Medicaid enrollments are up since the recession. The states have been successful enough containing cost growth the last two years that Medicaid costs are rising less rapidly than private health costs, most of them have done this without reducing eligibility. Several states (mostly with GOP governors)have huge Medicaid restructuring bills pending, including California, Florida, Texas, Mississippi, Minnesota, New Hampshire and Vermont. Many of these share common features and hinge on getting massive waivers of federal coverage requirements from the feds (something I can't imagine Jeb Bush having a hard time getting); because of this, it seems a major Medicaid reform is in the cards. SS reform may just be the appetizer, or, if you like, the smokescreen.

Posted by: Adam M | Feb 27, 2005 12:28:16 AM

a major *federal* Medicaid reform. duh

Posted by: Adam M | Feb 27, 2005 12:33:29 AM

Federal revenue sharing is probably a bad idea in general to Republicans, because it increases federal taxes and reduces state taxes, and we all know how that's distributed.

Posted by: Julian Elson | Feb 27, 2005 12:39:48 AM

Someone should start an Entitlements Scorecard so that we can have a central place to monitor the attacks on various entitlement programs.

PELL GRANTS have already been hit in the Christmas Eve program change that came out of 'nowhere'/GOP conference report -- passed in omnibus without debate or prior disclosure. The program funding allocations are very hard to follow with the income thresholds, etc. One item that was clear in both NYTimes and WaPo articles is that the program costs had been rising faster than appropriations for the program and that they were scheduled to rise more and faster with the coming college age baby boom echo boom.

There was previously a bipartisan opposition to making benefit cuts. Couldn't pass Congress if debated. Bush promised increased funding in 2000 and his 2006 budget includes headline-number increases in funding. Like so much of the apparently good policy initiatives from Bush, the small print renders the headline inoperative -- the actual increase in funding on an annual basis is less than the increase in population of beneficiaries.

Posted by: Mike | Feb 27, 2005 4:50:21 AM

"because it increases federal taxes and reduces state taxes, and we all know how that's distributed."

Because, however it's distributed, it breaks the direct link between funding and expenditure. If a program isn't good enough that the legislature enacting it wouldn't be willing to levy the taxes to pay for it, maybe it's a bad idea? Do YOU shop carefully when you're spending somebody else's money?

Also, revenue sharing becomes a form of extortion: Tax everybody to the point where states don't dare raise enough tax revenue to support their own necessary expenditures, and then give the money back to only those states that obey orders the federal government has no authority to issue.

Posted by: Brett Bellmore | Feb 27, 2005 9:54:37 AM

"it's just going to deny people health care to make room in the budget for big tax cuts."

Bullshit. They don't need to make room for tax cuts. They've proven that.

Posted by: AlGore | Feb 27, 2005 12:06:49 PM

"Oh, so when person B is a helpless 80-year-old with dementia, it's not "screwing her over" to dump her on the street outside the nursing home for lack of Medicaid?"

Sometimes it costs more to save a human life than it's worth. The value of extending that woman's life any further is pretty low and the cost is very high. We should simply let her die. We need to get over the naive belief that human life is infinitely valuable and make some real cost/benefit analyses of the value of life-saving care. Everybody dies. Deal with it.

Posted by: Xavier | Feb 27, 2005 12:33:49 PM

It would be very helpful politically if we could make psychopathic monsters like "Xavier" the public face of the Republican Party.

Posted by: Firebug | Feb 27, 2005 1:52:10 PM

Now, I'm willing to give Xavier more credit than I was to am (better online names, please, people). "Keeping my money even if old people die" is one thing. "Old people with essentially zero quality of life shouldn't be kept alive forever" is an arguable point, not psychopathy.

That said, all the usual problems remain: who makes these decisions, and is it okay that rich old people will enjoy (?) life-prolonging care that poor old people won't?

Some small reforms might help ... like, anyone who's too far gone to communicate whether she wants a Do Not Resuscitate order or not, gets a DNR, whatever her family says. (Just an example; haven't thought it through.) But I would think even Firebug would agree that at *some* point, artificial prolongation of life ceases to be a good thing.

---Now, whether the kind of patient I've described actually plays such a large role in Medicaid costs is another issue.

Posted by: Anderson | Feb 27, 2005 2:23:38 PM

Anderson, you are correct. What I was responding to wasn't so much the notion of diminshing returns in medicine as it was to Xavier's tone and his views as explicated in previous posts. Xavier is a greedy bastard who thinks people should be left to die if they can't afford medical care. That is the primary point here. If we had a European-style system, I would be willing to consider reasonable cost-benefit tradeoffs in medicine, as long as the decisions were made by actual doctors and not by corporate or government bureaucrats. But I am not willing to allow seniors to die so that greedy bastards like Xavier can stuff a few more bucks in their pockets.

Posted by: Firebug | Feb 27, 2005 2:38:34 PM

Xavier, we'll be sure to hold you to that attitude when it's your grandmother's turn. And if she's already passed away, well...people die--deal with it.

Posted by: Luis | Feb 27, 2005 10:57:05 PM

A person at age 65 has a longer life expectancy in the United States than any other industrialized nation. Now, it is an error to draw a straight line causal connecton between life expectancy and the quality of health care
(although people advocating single payer do it all the time), but those on Medicare endure less rationing of health care than retirees anywhere else in the world, and no, doctors are not the ones making the rationing decisions in single payer systems.

Of course, if Meidcare beneficiaries are politically powerful, and thus endure less rationing, it is equally true that Meidcaid beneficiaries are politically weak, and thus endure a lot more rationing. If the point is that Medicare and Medicaid beneficiaries should have their rationing more evenly distributed, well that certainly is a point that can be reasonably made. Coming from a political party, however, which has used less non-rationed health care for middle class retirees as one of their electoral clubs with which to beat their opponents with, well, it does present a conumdrum.

In fact, it is this conumdrum which sharply limits the ability of Democrats to effectively work for fundamental change in health care delivery, for any fundamental change will inevitably result in more rationing for that segment of the population which thay have been very dependent on.

Posted by: Will Allen | Feb 28, 2005 1:26:56 PM

Re: A person at age 65 has a longer life expectancy in the United States than any other industrialized nation.

Please back this up with solid references, as I have seen other stats in the past that suggest that this is not true.

Posted by: JonF | Feb 28, 2005 9:49:41 PM

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