Tentacles of Government Healthcare Extending Their Reach

Government healthcare programs are getting bigger, and we are not better off for it.  Things are trending in the wrong direction.

First, we have recent news nearly 100 million Americans – one in three – are now on Medicaid.  Obamacare’s Medicaid expansion for childless able-bodied adults transformed Medicaid from a poverty program into a middle-class entitlement.  Build it and they will come.  In my own state of Virginia, for example, Democrats promised Medicaid expansion enrollment would never exceed 400,000.  It now stands at more than 700,000 – 75 percent over worst-case projections.  In other states, enrollment was double or even quadruple estimates – 110 percent beyond estimates overall.  Another reason Medicaid rolls have ballooned is the COVID emergency that never ends.  The federal government told states ‘we’ll throw a bunch of money at you for Medicaid during the pandemic but, oh, by the way, you can’t take anybody off your rolls, even if they become ineligible.’  Joe Biden just extended the COVID emergency declaration to April, so this state of affairs will persist at least a while longer, leaving an estimated 20 million ineligible people on the rolls.  You are paying for them.

Second, U.S. government healthcare is also getting bigger because Obamacare subsidies got super-sized some months ago.  The jumbo subsidies have lured more people to sign up for Obamacare, understandably.  More on that on another day. 

Third, the so-called Obamacare ‘family glitch’ was addressed, making five million more Americans on employer-based coverage eligible for Obamacare.

The growth of government-run healthcare shows up in the smaller share consumers actually pay out of pocket for healthcare expenses.  Between private insurance and government healthcare programs, people directly pay in aggregate only 10 percent of the cost of the medical services they consume.  It’s 90 percent a third-party payer system, now, which is too bad, because being insulated from true costs incentivizes consumers to over-consume, distorting the market.  Another distortion is the growth in the number of administrators – all the people needed to administer third-party payments and deal with red tape – which far exceeds the growth in the number of physicians. 

These inefficiencies are only the start of why all of this is the wrong direction.  Hate to break it to you but, contrary to what Democrats would have you believe, government-run healthcare is not all it’s cracked up to be.

The growth in government healthcare imposes enormous costs.  Annual Medicaid spending increased by $198 billion during the pandemic, about as much Medicaid spending grew from 2012 to 2019.  Jumbo Obamacare subsidies were initially estimated to cost $22 billion for two years, but the figure is actually $50 billion.

Medicare dragged its feet on providing drug coverage even though private insurers had long since discovered such coverage, in general, gives more bang for the buck than doctor or hospital therapies.  Among other problems with Medicare include paying for small expenses while leaving seniors exposed to catastrophic costs, and sticking it to seniors with high drug costs while subsidizing those with low drug costs.

People who believe in government healthcare like it was a religion or something should look at the latest sins of the VA. 

A VA hospital in Florida denied treatment to a veteran dying of heart failure because first responders could not verify his military service, in violation of federal law.  The VA hospital in Spokane injured 148 veterans when its computer system failed to deliver 11,000 orders for specialty care, lab work, and other services and, further, failed to alert staff the orders had been lost.  Despite all the publicity about long wait times at VA hospitals, the problem is growing worse after initially improving.  An Inspector General report found $4 billion in employee or contractor embezzlement, kickbacks, theft, and other wrongdoing.  There were 104 arrests and 500 administrative actions taken to address these problems in just the first half of 2022 alone.  One kickback scheme involved 17 doctors, two executives, and millions of dollars in penalties.

Unfortunately, too many people still love government healthcare and it’s poised to get even bigger under a left-wing theory called ‘social determinants of health’.  More on that tomorrow.

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