Still more arguing about the Medicaid reimbursement

obamacare-logo_fullIt was bad luck for James Wigderson that his piece accusing me of endorsing a fiscally irresponsible Medicaid expansion went up on the same day the Legislative Fiscal Bureau released new estimates showing that the plan he endorses, Gov. Scott Walker’s plan, just shot up in price by $73.5 million. In less than three months. And that the great majority of that increase, $52 million, is directly attributable to Walker’s changes.

(Here’s Wigderson’s original post. Here’s my response. Here’s his response to my response.)

To review: As a way to encourage states to extend insurance coverage to more poor people, Obamacare includes a sweet deal on Medicaid reimbursements. All states with Democratic governors and some with Republican governors are saying great, we’ll take it. But some states with Republican governors, including Wisconsin, are saying no to expanding Medicaid. It is clearly a way of signaling public opposition to Obamacare, and some conservatives argue that it’s desirable in itself to have fewer people getting health care through the government, even if it means more people uninsured.

But Wigderson is one of a relatively small number of people making the argument that it’s actually a fiscal good for Wisconsin to forgo the sweet federal Medicaid reimbursement and instead try to shoehorn a bunch of people who are barely above the poverty line onto the federal exchanges.

It isn’t. The LFB estimate should be especially alarming given that its upward revision is coming amid a broad, national slowdown in health costs. The most likely outcome of rejecting the Medicaid expansion will be to have more people uninsured in Wisconsin, which will drive costs up.

I like Wigderson — he is funny on Twitter, has a clear and forceful writing style and he is not afraid to take on folks who belong to his ideological “side.” He’s good! So I want to give his response to my response the response it deserves.

Also, I am a fan of never letting anything go ever. Why else even have a blog, you know?

First, a couple of style points. Wigderson is evidently thrown by this blog’s admittedly silly house style of making words and phrases bold a lot. Also I made a joke about Paul Ryan in my post that was possibly ill-advised, I don’t know. And I attributed Walker’s plan to presidential politics, which — well, which I stand by. Presidential politics may lead to good policies or bad policies. But the fact that Walker is running for president is quite obviously going to have implications on his decisions as governor, and the fact that Obamacare is the most highly charged partisan issue of the last four years is not incidental to this conversation.

On to the substance of Wigderson’s argument:

However, Mentzer has good news. He assures the reading public that “there would be no actual risk to Wisconsin taxpayers to taking the Medicaid match on a short-term basis” … because Obama will protect the Affordable Care Act with his veto pen until 2016. We’ll just file that with “if you like your insurance, you can keep it,” and the promise that families will see the cost of health care premiums go down.

Obama has already accepted changes to the Affordable Care Act, including the elimination of the tax on medical devices. Will Obama retreat on the other 18 unpopular taxes, such as the 40 percent excise tax on “Cadillac” health plans? Or the $55 billion tax on individuals who don’t purchase health insurance? What about the raid on Medicare? How will Obama pay for the “doc fix” every year?

This I would describe as throwing a bunch of stuff against the wall to see if any of it might be an argument against the Medicaid expansion.

The mention of the “doc fix” is a giveaway. The “doc fix” is the result of a badly designed funding formula passed in 1997 that lawmakers have been temporarily fixing rather than permanently ever since 2002 (under Democratic and Republican administrations and Congresses, in other words). Since a permanent fix would make it look like lawmakers were increasing the deficit, they pass a “temporary” fix each year or so.

Why do they do it this way? It’s Congress. It’s idiotic. But it’s not Obamacare. Why not bring up, oh, maintenance for the highway system? Funding for the defense budget? Obamacare doesn’t solve those things, either. But they are not really relevant to the actual question on the table, with is whether or not the feds are likely to renege on Medicaid reimbursement funding in the next two years. They are not.

Here’s how I know: Wigderson lists things in the law that are unpopular and which have lobbyists trying to change them. But the Medicaid reimbursement has a strong constituency in favor of keeping it, namely every hospital and health care provider. Excepting the “doc fix,” Wigderson correctly identifies a bunch of unpopular provisions in the law: They are the eat-your-broccoli, fiscally responsible parts of the law which pay for the expansion in coverage. The Medicaid expansion does not belong in that basket. It’s one of the popular parts of the law.

This paragraph here is a bit confused:

But despite Mentzer’s assurance that taking the federal money would only have to be short term, he concedes that the proponents of the Medicaid expansion are not thinking short term at all. He says this is a “hail Mary” position of those who wanted Walker to create a Wisconsin-based exchange. Why would they ever concede going to the governor’s plan once they got what they wanted?

It’s not that proponents want Walker to create a Wisconsin-based exchange. Some did, others said the federal exchange will be fine once it is up and running. The question is whether or not it will be functioning properly and a good and viable option for people between 100% and 133% of the poverty line as of January 2014. Lots of reasons to doubt this. But to answer Wigderson’s question, the way proponents would concede going to the governor’s plan is if the exchanges are proven to be a better option for low-income folks than Medicaid. That is a conceivable future — but we won’t know if that’s the case until after they’re in effect.

In fact, in that case providers would have an incentive to urge a shift to something more like the Walker plan. In other circumstances, providers like to complain about their low Medicaid reimbursement rates. They would love to have people on the private exchanges! They would benefit from that. The thing they’re mainly trying to avoid right now is an increase in uninsured, which is the worst-case scenario for them — and also, incidentally, for all of us.

About Robert Mentzer

I am the opinion editor at Daily Herald Media.
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