Michael and James Sununu

March 3, 2014

As originally published in the Nashua Telegraph

Politics and governing aren’t the same thing, but they are inevitably intertwined. As much as we would like otherwise, political considerations often drive policy decisions. Sometimes the repercussions are small. In the pending decision over Medicaid expansion, however, the stakes are huge and it would be a serious mistake for Republicans in the state Senate to make this a political decision. The potential for the largest-ever expansion of state government should be considered only on the merits of “Is this good public policy?” Unfortunately, in the face of significant evidence that this policy will not work, it looks like the strongest driving force on this issue for the Senate GOP is that, politically, “we need to do something.”

Republicans champion individual freedom and limited government that intervenes only when necessary. Our policy decisions should reflect this. We fight expansion of the welfare state because it makes people more dependent on government and creates perverse incentives against work, independence and income mobility. But Senate Republicans appear to be on the abyss of enabling a new and significant round of dependency, one that will still not solve the problem at hand.

Supporters of expansion say we have to reduce the uninsured population. They argue the cost of the uninsured is too high and by insuring them through the government (albeit through taxpayer support for private insurance premiums) we will lower the overall cost of health care. Except available evidence shows us it doesn’t work. Maine expanded Medicaid coverage in 2002 for the same reason, but it was a huge failure. Before expansion, 12 percent of their population was uninsured. After Medicaid expansion? Still, 12 percent uninsured. Markets adjust when government gets more involved, so while Medicaid rolls expanded, private insurance rolls fell, costing taxpayers and businesses more money.

Another argument for Medicaid Expansion is to reduce emergency room visits, increase preventative care all while lowering the overall cost of health care. Again, the evidence doesn’t support this claim. A recent study published in the journal Science reached the opposite conclusion. Economists at MIT and Harvard studied Oregon’s Medicaid experiment. They compared similar populations, part of which “won” the lottery to enroll in Medicaid and part that remained uninsured. They found that expanding Medicaid “generated no significant improvement in measured health outcomes”.

More importantly, the study also found that emergency room use increased among those added to Medicaid, exactly the opposite of the desired outcome.

Proponents of expansion in New Hampshire will argue their plan is different because they support the use of private insurance. But once the market adjusts, we could end up with undesirable outcomes and no real net benefit, at the cost of tens or hundreds of millions of dollars.

It is puzzling that hospitals and many in the business community are supportive of this expansion. Hospitals are mired in their own battles over uncompensated care, the Medicaid Enhancement Tax, and low reimbursement rates. Yet somehow shifting tens of thousands of patients from private insurance to a system with lower reimbursements is going to help matters? And the business community should certainly know better than to support any large-scale expansion of government. When the program costs more than projected, or the federal government fails to meet its obligations, where do businesses think the state will turn for more revenue?

The notion that “we need to do something” seems to have been hatched and nurtured inside Concord’s version of the Beltway. The first attempt at Medicaid Expansion died last year, and there was hardly an outcry from the general public. Yet Senate Republicans still feel they have to pass a “compromise” that is in reality a bad deal. What’s worse is that in the future, if the program doesn’t live up to expectations it will be almost impossible to pull the plug. A sunset provision is nice, but only if you have the nerve to let it sunset – and political “Profiles in Courage” are pretty scarce in Concord these days.

For the sake of argument, though, let’s add some political context. In 2012, the Republican nominee for President was in the difficult position of having supported a large government intervention into health care in his state and could not aggressively attack Obamacare. But the unfolding Obamacare disaster will be front and center in the 2014 elections. New Hampshire Republicans should be pointing out the folly of large-scale interventions in health care, not strapping themselves to the mast of a sinking ship because they are afraid Ray Buckley will accuse them of class warfare. Bulletin: Ray Buckley will accuse Republicans of that no matter what.

New Hampshire’s corner office has lacked leadership and direction for far too long. Senate Republicans have often been the only bulwark against bad public policy, and deserve credit for such victories as a responsible budget and limiting regulatory overreach. They should continue this approach with Medicaid expansion and say “not this policy, not right now.”

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  1. […] our grandchildren, not us, nor the aging Republican Senators (who feel the need to “do something“), will pay for.  And it should go without saying that this entitlement solution would come […]

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