The unkindest cuts of all?


Kansas City:


By Jack Cashill

© - January 2006

“Missouri is a mess,” read the candidate’s campaign literature in the 2004 Missouri gubernatorial race.

Among the most glaring signs of that mess were “nearly 50,000 lost jobs and falling wages, the biggest budget crisis in Missouri history, and dramatic cuts to higher education.”

When young governor Matt Blunt took office, he addressed the aforementioned budget crisis by lopping roughly 9% off the top of the state’s Medicaid rolls. Alas, in that one chill swipe of the pen, he made more enemies than he had in all the pre-Governor years of his life.

My job, a tough one, was to find the friends.

For almost a year now, Ingram’s and KCPT have been co-producing a debate series called Kansas City @ the Crossroads. Every month or so, we ask high-profile individuals to defend their turf or their honor on a contentious issue—stem cell research, bi-state, school funding, crime, illegal immigration. We then cross our fingers and pray we can locate eight or so good souls with moxie enough to go public. It’s never easy.

For Ingram’s February edition, KCPT’s Nick Haines suggested a lively topic—“The Controversy over Medicaid: What is state government’s responsibility to support health care for poor Americans?” As Nick acknowledged, there would be no trouble finding panelists eager to denounce Blunt’s cuts as “unjust and immoral.” My challenge would be to identify credible, high profile decision makers willing to defend them.

Health care providers are rarely ideologues. When Missouri Democrats were chasing doctors away with excess litigation, the providers were Republicans. When Missouri Republicans cut Medicaid, the providers morphed into Democrats.

The first job is to protect their institutions, and their insti-tutions are the first to suffer when Medicaid gets cut.

The providers make a strong, practical argument against Medicaid cuts, and it hinges on the fact that the federal government matches, at the very least, a state’s Medicaid input. For every dollar Missouri raises for Medicaid, the federal government puts up more than $1.60. Only the federal government could conceive so foolproof a way to discourage prudence or reform. For when Missouri cuts $1.00, it loses another $1.60 of “free” money.

Some of that money is recaptured when axed Medicaid recipients pick up private insurance. Before the cuts, Missouri had one of the most generous Medicaid programs in the country, covering families of four with incomes up to $56,550. Some of these families will find their way to private insurance, which reimburses providers more generously than does Medicaid. A corollary crackdown on fraud will also inspire some folks to pay their own way. But, no doubt, many of these people will join the great pool of uninsured, and the providers will be left to foot the bill for un-reimbursed care. Their complaints have merit.

The moral arguments against Medicaid cuts are a bit less grounded. “People reveal their heartless nature in the cruel things they do,” opined Star editorialist Lewis Diuguid, whose principle claim to fame is that his name, like his thinking, reads the same backwards and forwards.

As to the motive of the budget cutters, Diuguid cites “social Darwinism,” the first criticism of Darwinism in any shape or form by a Star editorialist since the Scopes trial. Adds Diuguid, presumably with a straight face and a clear conscience, “[Republican legislators] see themselves as predators ridding the state of the weakest among us.” And Diuguid—an outspoken foe of hate speech, as should be obvious—avoids the less temperate language of some of his more righteous chums.

If the Medicaid cuts are impractical and immoral, not to mention wildly unpopular, what in God’s name inspired Blunt and his Republican colleagues to enact them? I figured I had better answer this myself as it seemed likely, given the absence of takers, that I would end up on the Kansas City @ the Crossroads panel myself. I should confess that I entered this investigation with a bias inflamed by my recent 89% property tax increase (See December 2005’s Between The Lines).

Let’s start with some cold truths. In 1998, some 585,000 Missourians received Medicaid. By 2005, that number had swelled to 992,000. It wasn’t that Missouri-ans were getting poorer. It was that eligibility requirements were getting easier, and it was the state, not the feds, that was doing most of the easing.

Medicaid is free only to the recipients. In 1998, it was costing nearly $2.2 billion a year in Missouri. By 2005, it was costing more than $5.5 billion. From the provider’s perspective, it matters who picks up the tab. But from the taxpayer’s perspective, it doesn’t matter at all. Whether this money comes out of state coffers or federal coffers, you and I pay for both.

Meanwhile, in that seven-year stretch, while Medicaid costs were increasing by 150%, state tax revenues were increasing by roughly 11%. Speaking of dog-eat-dog, even those opposed to Social Darwinism could see that Medicaid was about to swallow the entire state budget whole.

By cutting off 9% of the recipients, Blunt rolled Missouri back to the stone age of, well, 2002. Heck, if Holden had frozen Medicaid in 2002 and left higher education alone, no one would have ever suspected we had a Medicaid crisis, and Holden might still be governor. But he didn’t, we do, and he’s not.

“What the governor and legislature should do instead [of cutting Medicaid],” argues the unfailingly wide-eyed Diuguid, “is make it possible for more companies to build plants and offices in the state, employing more workers.” Yes, Lewis, of course, Lewis, but no company has ever moved anywhere because of a state’s generous Medicaid benefits and rising taxes. High taxes kill job growth, which growth, in the Missouri of 2004, was all but dead to begin with.

“Missouri is a mess,” remember! “Nearly 50,000 lost jobs and falling wages, the biggest budget crisis in Missouri history!” Oh, by the way, this was not Blunt’s campaign literature, but that of Democrat Claire McCaskill. And yet in her 30-page “Blueprint for Economic Change,” McCaskill did not even mention the source of that budget crisis, Medicaid. Politics can be like that!

Politicos are even less keen to speak about Medicaid’s social downside than its fiscal. When coupled with other entitlement programs, Medicaid kills ambition and discourages marriage. Today, largely as a result of these programs, more than half the babies born in Kansas City are born out of wedlock. In some neighborhoods, about the only place you can find an upwardly aspiring, two-parent, working class family is on Nick-at-Nite. That’s a shame. For marriage is the surest route out of poverty. Less than 2% of married couples, in which at least one partner works, is poor.

The unmarried poor run any number of health risks. Studies both here and in the U.K., for instance, show that “boyfriends” are roughly 30 times more likely than a married father to abuse the children in their charge. The homicide rates in either of the Kansas Cities, given their clustering of dependent families, typically run 20-30 times higher than they do, say, in Johnson County. The poor are much more likely than the non-poor to smoke, grow morbidly fat, get hooked on something evil, or catch some nasty STD, all of which costs lots of money and almost none of which is paid for by those afflicted.

Yes, there are practical arguments to be made for or against Medicaid reform, but this should be a sober debate among the providers who shoulder the burdens and the tax-payers who pay the bills.

As to the hecklers who preen on the sidelines, they would do well to show a little more modesty or a lot more charity. There is no moral high ground in spending other people’s money.



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