Chupacabra Report

News that Gets My Goat


News today that the Texas Legislature’s GOP House Caucus voted overwhelmingly against Medicaid expansion, that is, against spending fifteen billion dollars over the next ten years to draw down over one hundred billion dollars in federal money to cover millions of uninsured Texans. Legislators of course are interested in the money, but Medicaid expansion goes against their ideology of screwing people and getting a piece of the action. Governor Perry rails against Medicaid as “a broken system.” Broken compared to what? Texas leads the nation in uninsured, with 24% of the population having no coverage.

Paul Krugman wrote on this subject this week, here’s some:

“Now, in the end most states will probably go along with the expansion because of the huge financial incentives: the federal government will pay the full cost of the expansion for the first three years, and the additional spending will benefit hospitals and doctors as well as patients. Still, some of the states grudgingly allowing the federal government to help their neediest citizens are placing a condition on this aid, insisting that it must be run through private insurance companies. And that tells you a lot about what conservative politicians really want.

“Consider the case of Florida, whose governor, Rick Scott, made his personal fortune in the health industry. At one point, by the way, the company he built pleaded guilty to criminal charges, and paid $1.7 billion in fines related to Medicare fraud. Anyway, Mr. Scott got elected as a fierce opponent of Obamacare, and Florida participated in the suit asking the Supreme Court to declare the whole plan unconstitutional. Nonetheless, Mr. Scott recently shocked Tea Party activists by announcing his support for the Medicaid expansion.

“But his support came with a condition: he was willing to cover more of the uninsured only after receiving a waiver that would let him run Medicaid through private insurance companies. Now, why would he want to do that?

“Don’t tell me about free markets. This is all about spending taxpayer money, and the question is whether that money should be spent directly to help people or run through a set of private middlemen.

“And despite some feeble claims to the contrary, privatizing Medicaid will end up requiring more, not less, government spending, because there’s overwhelming evidence that Medicaid is much cheaper than private insurance. Partly this reflects lower administrative costs, because Medicaid neither advertises nor spends money trying to avoid covering people. But a lot of it reflects the government’s bargaining power, its ability to prevent price gouging by hospitals, drug companies and other parts of the medical-industrial complex.”

“You might ask why, in that case, much of Obamacare will run through private insurers. The answer is, raw political power. Letting the medical-industrial complex continue to get away with a lot of overcharging was, in effect, a price President Obama had to pay to get health reform passed. And since the reward was that tens of millions more Americans would gain insurance, it was a price worth paying.

“But why would you insist on privatizing a health program that is already public, and that does a much better job than the private sector of controlling costs? The answer is pretty obvious: the flip side of higher taxpayer costs is higher medical-industry profits.

“So ignore all the talk about too much government spending and too much aid to moochers who don’t deserve it. As long as the spending ends up lining the right pockets, and the undeserving beneficiaries of public largess are politically connected corporations, conservatives with actual power seem to like Big Government just fine.”