As President Obama’s recently-released budget for 2011 reveals, with or without a health care reform bill, Medicaid stands to receive a big, taxpayer-funded bailout. Again. The 2011 Budget includes $25 billion in additional funding for state Medicaid programs as an extension of the bailout that was included in the 2009 economic stimulus bill.
As Heritage analysts Dennis Smith and Nina Owcharenko argued then, depending on federal bailouts to carry Medicaid through economic hardships is bad policy.
The stimulus bill provided increased federal matching rates for Medicaid programs in all fifty states. This splurge in spending was accompanied by no caveats or strings attached to require true Medicaid reform, which is sorely needed. Instead, the federal government succeeded only in propping up the failed policies behind the broken government program, encouraging continued sluggishness in actual improvements to the system.
What is more, federal bailouts of state Medicaid programs set states up for short-term dependency on federal dollars which will lead to long-term budgetary problems when these funds expire. Nothing could make this clearer than the Medicaid bailout extension included in President Obama’s 2011 budget.
In a recent article in the Wall Street Journal, Janet Adamy explains that additional Medicaid funding was included to respond to Congress’ stalled efforts to achieve comprehensive health care reform. Both of the health care bills would have expanded Medicaid and increased federal matching rates. According to Adamy, “Some states were so confident Congress would pass a health bill that they included the extra Medicaid funds in their state budgets.” Thus the need for additional bailout money: state fiscal irresponsibility, encouraged by Washington.
If Congress had structured the previous bailouts correctly in the first place, this additional bailout may not have been necessary. Smith and Owcharenko outline how this should have been done. Of course, the economic stimulus should not have included increased government spending in the first place. Rather, tax cuts should have been used to invigorate the economy.
That aside, a Medicaid bailout should have established criteria to ensure that states accepting more funding took the necessary steps to improve their programs. States should have also been required to submit plans for long-term reform. Medicaid beneficiaries currently suffer from lack of access to care due to outdated reimbursement systems. Addressing this would improve the quality of care for enrollees. Lastly, both state and federal governments should have made a commitment to achieving serious entitlement reform as a part of the bailouts, assuring they would not be needed in the future.
But none of this happened. Instead, once the extra federal funding expires, states will be left to deal with balancing their budgets and footing the bill for the same low-performing Medicaid programs.
As the secret Obamacare negotiations enter Day 7, word has leaked from the meeting that the White House and Senate leaders have ordered Congress to pass a $247 billion dollar payoff to doctors groups for their support of comprehensive health care reform. The Fix is in – Doc Fix that is.
The Hill Reports:
The White House and Democratic leaders are offering doctors a deal: They’ll freeze cuts in Medicare payments to doctors in exchange for doctors’ support of health care reform.
As a result of the order, the Senate is preparing debate on a bill called “Doc Fix,” which would freeze cuts in Medicare payments to doctors for the next 10 years as a means to ease passage of Obamacare later this Fall. The version of “Doc Fix” was originally part of the Obamacare plan and the secret negotiators wanted to take $247 billion off the books of President Obama’s heath care legislation. The left would like to pass this bill, with or without offsets, so they can buy support for a public plan from a group, and a lobbying interest, that has opposed a government takeover of health care and the creation of a public plan.
The Hill story goes on to describes a meeting between lobbyists for doctors, the Obama Administration and Senate Leaders. They allegedly offered the passage of the “Doc Fix” bill for doctor’s support of an Obamacare bill. The American people should be outraged that they are excluded from secret negotiations on Obamacare, yet the interest group that represents the doctors are being provided a $247 billion pay off to support the Senate version of Obamacare.
More from the Hill on who was involved in the scheme:
At a meeting on Capitol Hill last week with nearly a dozen doctors groups, Senate Majority Leader Harry Reid (D-Nev.) said the Senate would take up separate legislation to halt scheduled Medicare cuts in doctor payments over the next 10 years. In return, Reid made it clear that he expected their support for the broader healthcare bill, according to four sources in the meeting.
Also in the meeting were: Senate Finance Committee Chairman Max Baucus (D-Mont.); Sen. Chris Dodd (D-Conn.); White House Chief of Staff Rahm Emanuel; Office of Management and Budget Director Peter Orszag; and Nancy-Ann DeParle, director of the White House healthcare office.
“They said they’re going to need our help in getting healthcare reform over the goal line and they expect our support,” said a participant who represents doctors. “Reid, Baucus and Dodd. All three said the same thing: They want and expect our support.”
The lobbyists for the doctor’s groups have been asked to support Obamacare for the top item on their Congressional wish list, but there is a high price to pay. Heritage Foundation fellow Bob Moffit says this “it has now become clear that the lobbyists for organized medicine do not do a good job representing the nation’s physicians. The reason is clear. The Congressional leadership wants to create another government run health plan with payment rates tied to Medicare rates, rates well below those of the private sector. Every independent analyst has estimated that a government plan would crowd-out existing private coverage, meaning that millions more Americans would get health care from physicians at Medicare-level rates. So, while ‘helping’ the doctors by ‘fixing’ Medicare payment update formula, thus paving the way for passage their giant health care bills, the Congressional leadership dramatically expands its direct control over physician payment through a new government plan. This is obviously not a good deal for physicians, regardless how they may feel about the shortcomings of existing Medicare payment system. It gives new meaning to the fine old phrase ‘penny wise and pound foolish.’”
Some on the right have renamed this “Doc Fix” legislation as “Doc Payoff” or “Doc Bailout” because the timing is clearly being dictated from the secret negotiations in the Capitol over Obamacare. These negotiations are not transparent as reported in Human Events, “The president promised in his campaign he’d deliver transparency, saying, “I’m going to have all the negotiations around a big table” with everybody involved. Those that can’t make it would be able to see “the negotiations televised on C-SPAN.” Not only are these secret negotiations not on C-SPAN, nor open to the public, the secret negotiations have born some billion dollar fruit.