Tag Archives: Medicaid

What FDR knew about welfare: “Continued dependence upon relief … a subtle destroyer of the human spirit”

In the Wall Street Journal, Independent Institute research fellow James L. Payne writes that FDR understood that welfare recipients need to be productive and build skills and a work ethic. Payne writes:

Franklin D. Roosevelt was clear as well. “Continued dependence upon relief,” he said in 1935, “induces a spiritual and moral disintegration fundamentally destructive to the national fiber. To dole out relief in this way is to administer a narcotic, a subtle destroyer of the human spirit.” Yet government programs, being shallow and impersonal, tend to drift into handouts. They are like the superficial giver who drops a dollar into the beggar’s cup and walks on, feeling self-satisfied.

Source: What FDR Knew About Welfare (WSJ site). Full text here if WSJ link does not display it.


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If low-income Coloradans spend big bucks on booze, candy, & movies, they can afford higher Medicaid copays

Are Colorado Medicaid recipients spending hundreds of dollars on candy, booze, cigarettes, and movies while the state forces taxpayers to fund their medical care?  Yes, suggests the 2009 Consumer Expenditure Survey.

“Colorado faces a deficit of about half a billion for next year,” the Associated Press reports.  Instead of increasing taxes, Colorado legislature should spend taxpayers’ money more wisely. One way is to increase enrollment fees and co-payments for Medicaid and the Children’s Health Plan Plus (CHP+). These programs account for ten percent of the state budget.

Typical Medicaid co-pays are at most $3. CHP+ co-pays are at most $5, and enrolling one child is just $25 annually. The 2009 Expenditure Survey data suggests that some Medicaid recipients and parents with kids in CHP+ can afford more.

On average, the lowest income households, less than $5,000, spend almost $1,900 on sweets, alcohol, tobacco, and entertainment. Oddly, households with incomes between $5,000 and $10,000 spend less on these items – around $1,400. The groups’ non-income demographics are similar: people, wage-earners, children, and retirees per household.

Colorado CHP+ could emulate New Hampshire’s tax-funded “Healthy Kids” program. As in Colorado, parents earning between 185% and 250% of the Federal Poverty Level are eligible, though well above the poverty line. The monthly fee is $32.  Typical co-pays are $10, $100 for ER visits, and between $10 and $30 for prescriptions.

Many parents in this income range buy private insurance for their kids, reports the Congressional Budget Office. Higher fees and co-pays could encourage more parents to follow suit.

The Boulder Daily Camera published this article on March 26, 2011.

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One objection that I’ve seen to higher-copays is that patients or parents of children will forgo treatment, and wait until medical conditions get very serious before seeking treatment. If so, the argument goes, it would cost taxpayers more in the long run.

For sake of argument, let’s say this is true.  Then:

1. This shows one reason that replacing Medicaid with a voucher for  nominally “private” insurance is better. After all, government issues food stamps for food rather than running its own grocery stores.

2. Would you choose to donate to a charity that allows its recipients to spend money on entertainment and leisure while skimping on medical care?   I don’t think so. If Medicaid & CHP+ recipients respond this way to higher co-pays, this reveals a flaw with the programs themselves.  A good private charity would not allow such behavior. Or, if it did, it would quickly lose donations when word got out.

Government shouldn’t force taxpayers to donate to a specific charity, or any charity. But if government “must” force donations, at least it’s better to allow taxpayers to choose the charity. For more, see: <a href="http://www.huffingtonpost.com/brian-t-schwartz/questioning-your-compassi_b_574030.html”>Questioning your “compassionate” politics.

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Colorado Medicaid reform: federal matching funds promote waste

The Colorado legislature should cut wasteful spending by Medicaid and the Child Health Plan Plus. When these programs spend a dollar from a Colorado taxpayer, the federal government gives them a dollar taken from a taxpayer in another state.  Hence, Medicaid and the Child’s Health Plan program administrators are rewarded for spending more and punished for spending less.

These programs devour about ten percent of the state budget. Hence it’s no surprise that “Colorado faces a budget deficit of between $50 million and $257 million for the rest of this fiscal year,” reports the Denver Business Journal. Balancing next year’s budget could require $1.1 billion in cuts — about 5% of the budget.

Federal matching funds rewards extravagant spending. Administrators can expand their budgets, staff, and salaries. Programs stray from serving the truly needy, as the Independence Institute’s Citizens Budget documents. So lax was the recent Child Health Plan Plus expansion that about six of every ten new enrollees had private insurance.

Low enrollment fees and copayments also encourage imprudent spending. For example, it’s just $2 for a podiatrist visit.

A penny squandered is a penny “earned.” Colorado Medicaid made errors processing claims more often than private insurance, which cost taxpayers thousands of dollars. But the feds reward them for this, too.

Instead of federal matching funds for Medicaid, Colorado should request a lump-sum block grant. This would reduce perverse incentives.

A version of this article was printed in the Boulder Daily Camera on January 15, 2011.

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Boulder Daily Camera – critical of Medicaid?

Yesterday the Daily Camera published my comments on Medicaid as part of their Virtual Editorial Board (printed version). They summarize my longer piece on Medicaid. I’m happy to note that among those that wrote in, I was not the only one critical of Medicaid.

Better yet, Dave Humphrey and Shirley Scoville of the “real” editorial advisory board ask excellent questions.

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