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Wednesday, August 9, 2017

While You Were Busy Raising Taxes...

After the Revenue Committee meeting in Thermopolis, it is clear that our legislative leadership is still going to push for tax increases. In the face of growing resistance from taxpayers, there are rumors that the legislative leadership is working on a plan to facilitate the passage of higher taxes. I have a good idea of what those measures would be, but for now I will keep that piece of information tight to the chest.

What is more important right now is the fact that the more time our lawmakers spend trying to raise our taxes, the less time they spend solving important problems. That is bad, because it means that they leave our public school system unreformed, bu they also leave us vulnerable on other accounts.

One example is the mess that Republicans in Congress have created with their pathological inability to repeal/reform/replace Obamacare. That inability can come back and hurt us here in Wyoming. There is a way to prevent it, but so long as our legislative leadership's attention is on tax hikes, they will not see this one coming.

Here is the problem. Back in June, I warned that we may be on a path to socialized health care here in Wyoming. This would not happen through deliberate legislation, but by means of a process akin to "death by a thousand blows". The longer our legislature ignores the burden that government places on the private sector in our state, the weaker that private sector will become. 

One of the more difficult parts of the health care industry is the dichotomy between one market for production and sale of the service, and one market for means of payment, i.e., health insurance. We can have a "free" system for health care production and sale, but a government monopoly on insurance, and many people would still not classify it as a single-payer, universal health care system (which it is). 

The problem for Wyoming is that we are stumbling into a situation where both markets are effectively socialized - and again not through legislation deliberately pursuing socialized medicine, but as a consequence of legislative clumsiness. Inadequate attention to the private health care sector's conditions has led to a drift toward government dominance; the monumental Obamacare mistake by Congress has de facto given one health insurance provider a monopoly in our state. 

By means of its repeal/reform/replace debacle, Congress has paved the way for further expansion of government-provided health insurance, a.k.a., Medicaid. With more and more people falling to the wayside under the crumbling of Obamacare, more and more people will try to get on the expanded form of Medicaid. 

In a manner of speaking, Congressional Republicans have turned Medicaid into a mechanism for creeping health care socialization. It is fueled by bone-crushing increases in insurance premiums and outright punitive deductibles. 

As the implosion of Obamacare dumps more and more people into Medicaid, especially its expansion, welfare-statist Republicans can sit around and wait for the health care "issue" to solve itself. Once Medicaid has grown to a certain size, it will surpass the private sector as the prime provider of health insurance. At that point, passing a single-payer law will be a minor inconvenience to Congress. 

Democrats - who will take the House in 2018 thanks to the GOP's political suicide - have no reason to wish for another "final solution". They will not even have to throw around the stigmatized term "single-payer health care"; all they have to do is follow the Republican roadmap to a government health insurance monopoly.

But what does all this have to do with Wyoming? The connection runs through the many states that chose to expand Medicaid. This expansion, it turns out, was not a very good idea from a fiscal viewpoint. (And we are all very surprised.) In fact, as the Daily Signal reports, Medicaid expansion is giving Americans the very first taste of what a single-payer health care system will look like:
in expansion states, where far more low-income Americans enrolled in Medicaid than policymakers expected, services that traditionally went to the disabled and needy are being diverted to pay for the additional costs of the expansion population.
And then, the Signal continues, there is the rationing of health care:
[Galen Institute senior fellow Doug] Badger ... noted that as the Medicaid population has grown, the number of providers accepting Medicaid patients hasn’t changed. “We had a surge in the people on Medicaid, but we didn’t have a surge in the doctors accepting Medicaid patients or other institutions to care for them,” he told The Daily Signal. “You add 12 million people to Medicaid, but where’s everyone going to go?”
Why has the number of providers not increased? Because reimbursement rates in Medicaid remain the same. As a general rule, there is about 40-50 percent more revenue in providing health care to a patient on private insurance than to a patient on Medicaid. The Daily Signal again (emphasis added):
Studies have suggested that Medicaid patients have had trouble finding providers, and have worse outcomes than those without insurance. A study from the University of Virginia examining major surgical operations that occurred between 2003 and 2007 found that for eight different procedures, Medicaid patients were more likely to die in the hospital or suffer complications than the uninsured and privately insured.
Even though Wyoming did not adopt Medicaid expansion, we are still under severe threat of a cost explosion. It is driven partly by the economic crisis in our state, partly by the "evolution" of the private insurance market under Obamacare. Furthermore, if Congress chooses to let Medicaid expansion become the mission-creep avant garde of socialized medicine, there will be renewed pressure on our state to accept the expansion part. 

We can take proactive measures to avoid this. To see why and how, let us listen for a moment to Natalia Castro, contributing editor at Americans for Limited Government, as she elaborates on the Medicaid expansion experience:
States that have expanded Medicaid under the Affordable Care Act are quickly realizing they cannot afford the cost they chose to bare, and are eagerly attempting the reverse their decision. States are not completely to blame for accepting the economically crippling Medicaid expansion. Like many other false promises of Obamacare, states like Illinois did not expect their costs to skyrocket as much as they have.
Weren't we told that health insurance was going to get cheaper? Since the opposite has happened, and insurance costs have skyrocketed under Obamacare, the effect has been a shift of people from private insurance into Medicaid. Using Illinois as an example, Castro explains the consequences:
Democratic Governor Pat Quinn and the Illinois General Assembly promised taxpayers the expansion would cost no more than $4.6 billion, under the guise the federal government would pick up most of the tab. Now, the Illinois Policy Center finds, between 2014 and 2016, Illinois taxpayers shelled out $9.2 billion for Illinois Obamacare expansion. 
She then quotes the Illinois Policy Center's report on the effects of Medicaid expansion:
“Nearly 20,000 children and adults with autism, epilepsy, developmental disabilities and other critical conditions are currently languishing on a Medicaid waiting list for needed home and community-based services. Nearly 70 percent of those individuals have reported an emergency or critical need for services. Many will die before ever getting the services they so desperately need.”
This experience can be used as a basis for positive reforms, even here in Wyoming. 

What reforms? And how? Hang in there. First, a few more words from Natalia Castro, who explains that the situation in Medicaid expansion states is  now so desperate - and Congress so gridlocked over health reform - that 
the Governor of Maine is taking matters into his own hands. The state submitted a waiver request to President Trump that would allow the state legislature to reform the Medicaid program without Congress. Maine’s proposal included instituting work requirements for Medicaid recipients, as well as a lockout for failure to pay monthly premiums.
And herein lies the key to a proactive health care policy here in Wyoming. Other states trying desperately to reform away Medicaid expansion, or just reform standard Medicaid, include Arizona, Arkansas, Indiana, Kentucky and Wisconsin. 

If we had a forward-looking legislative leadership, Wyoming would join these states and work hard to build a coalition of free-market health care states. We could restore private providers as a reliable go-to for health insurance, and we could secure a market big enough, across state lines, that competition would provide a superior balance between access to quality health care and reasonable premiums. 

All this is possible if our legislative leadership decides that this is what they want for our state. That, of course, would require them to cease the pursuit of tax increases.

With the right choice, our legislators can begin the turnaround of our state. With the wrong choice, on the other hand, our state legislature will slowly but inevitably bring us all to the edge of fiscal sanity. Or, in the words of Natalia Castro:
States inability to fund Medicaid is not only a fiscal crisis, it also endangers the lives of Americans in need of health care rather than the false sense of security that arises from inadequate health insurance. 
Well said. Now the question is: what is the highest priority of our state legislators? 

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