Obamacaid

Reposted from the Wall Street Journal, October 9, 2013

ObamaCare’s website appears to have been built by Mitt Romney‘s “Project Orca” digital team, and perhaps tens of people have managed to sign up so far. “Fully enrolled, I can’t tell you. I don’t know,” Health and Human Services Secretary Kathleen Sebelius conceded Monday. But Democrats do have one lament about implementation: Some states are opting out of the Medicaid expansion.

Medicaid, the joint state-federal safety net intended for the poor, already covers more than one of five Americans and pays for two of five U.S. births. And that’s before ObamaCare dumps up to 20 million new dependents onto its rolls. Liberals are still somehow evoking Little Nell and the blacking factory because 26 Governors or legislatures or both are so far declining to expand. Their hysterics would benefit from a fact or two.

First note the Perils-of-Pauline Medicaid moment is the result of a 7-2 Supreme Court majority, which ruled that the Affordable Care Act’s expansion mandate was coercion exceeding the Constitution’s limits on federal spending powers. This was the first such holding in the history of the Republic and the rebuke ought to embarrass Democrats, if they’re still familiar with that sensation.

Note also that the opinion, which allowed states to choose to expand or not, was joined by Justices Stephen Breyer and Elena Kagan, President Obama’s former Solicitor General. These liberal stalwarts explained that ObamaCare transformed Medicaid into something that “is no longer a program to care for the neediest among us.” The major reason states don’t want to participate is that rather than help members of society emerge from poverty, new Medicaid is supposed to be a permanent Washington-run, price-controlled health system, with no flexibility for the states.

The feds are dangling the promise of paying for all the costs of the new beneficiaries, at least for the next three years. This subsidy honeypot can’t last forever, and Governors are right to worry about taking on fiscal obligations that will increase 13% on average in 2014 under new Medicaid, according to a Kaiser Family Foundation state budget survey.

The Beltway boys and their allies in the hospital industry that are ravenous for more federal revenue are stunned that their bribery failed. So the new line of assault is to declare that the 26 conscientious objector states must hate poor people, or racial minorities, or Saint Peter and Christianity itself.

In reality, Medicaid is now mostly a middle-class entitlement for nursing homes. Almost two-thirds of Medicaid spending flows to the elderly, and 60% of people in long-term care institutions are on the program.

Some 20% of the people under 65 who are eligible for the program today also haven’t signed up. One reason might be the scandalously poor quality of care as states squeeze down provider reimbursements. Only this May an important randomized, controlled trial in Oregon concluded that the program generates no discernible improvement in health compared to being uninsured.

If the sojourners for Medicaid were serious about helping the least fortunate, they’d try to repair its current dysfunctions. Start by prioritizing spending, and then give Governors waivers to manage case loads and make operations more efficient.

But the truth is that liberals view Medicaid as a national model, not a national disgrace. Coverage on ObamaCare’s nominally private exchanges largely clones Medicaid’s narrow networks of doctors and hospitals, low reimbursements, limited patient choice and heavy federal regulation. It might be more accurate to call it Obamacaid.

Meanwhile, the Administration is closing off state Medicaid experimentation with “maintenance of effort” rules that guarantee state costs are higher than they need to be. Most Governors, even Republicans, are pragmatic about living with Medicaid, but the White House’s control-freak instincts are making it impossible for them to participate.

What all this suggests is the real concern among Democrats isn’t the well-being of the poor but their own in 2014. They’ll run against Republicans as ideologues who won’t even accept free money from Washington, and who by the way are mean-spirited and cruel. This election gambit has a certain political logic, or at least more than pretending the Medicaid status quo is a great success and packing more of the poor into an unreformed system.

A version of this article appeared October 9, 2013, on page A14 in the U.S. edition of The Wall Street Journal, with the headline: Obamacaid.