Happy New Year, and all cheer the arrival of the one and only John McGinnis on this excellent site! His contributions will make it excellenter still. Rummaging around on the Supremes’ docket and among briefs and petitions, I’ve come across Harris v. Quinn. The question is whether it’s okay for a state (Illinois) to authorize unionization, complete with mandatory union fees, for home health care workers who provide in-home care to individual patients under Medicaid-financed programs. Abood v. Detroit Board of Ed. (1977) held that public employers have a “compelling interest” in labor peace and in preventing free-riding by employees. (However,…
Apologies for the prolonged blogging hiatus. I’m not dead yet, just snowed under—I’ll resume my regular blogging at the nearest occasion. Herewith a forthcoming law review piece on the “Medicaid ruling” of NFIB v. Sebelius. The gist of it: NFIB didn’t really do very much about the horrendous economic incentives that drive the program. “Not very much” doesn’t mean “nothing”: on the margin, the ruling may have increased some states’ willingness to forego the “opportunity” to expand the program even further; and in the short term it is an opportunity. To illustrate: in my home state of Virginia, newly elected Governor McAuliffe promised to finance big road-building…
Yesterday’s Wall Street featured a scathing editorial on Arizona Governor Janet Brewer’s emphatic call for the state’s participation in Obamacare’s Medicaid expansion. Arizona, you’ll recall, was among the states that litigated against the Medicaid expansion in NFIB v. Sebelius, and it’s supposed to be ground zero for resistance to federal overreach in general (e.g., on immigration). However, under a “provider tax” scheme cranked up by the health care provider lobby (and practiced by most other states), Arizona has figured out a way to make money on federal Medicaid grants. Too good to pass up. Notes the Journal:
Ten other GOP Governors have rejected Mr. Obama’s Medicaid bribe, with another 20, Democrats and Republicans, undecided. Twenty are expanding, including Republicans Brian Sandoval of Nevada, Susana of New Mexico, Jack Dalrymple of North Dakota and even, on Monday, Ohio’s John Kasich. Thus does modern government create the carrots and sticks of ever-larger government.
Quick update on Friday’s post, before launching into today’s clueless musings: approximately 10 minutes after I put the blog to bed, the Supreme Court publicly issued its cert grant in American Trucking Ass’n v. Los Angeles. Thanks to occasional contributor Adam J. White for the alert. On to a case argued this past week before the Supreme Court: Delia v. EMA, presents a Medicaid wrinkle that (if I’m right) poses a constitutional question of considerable import. The justices don’t seem to think so, though. Either they’re wrong, or else I am missing something. The Statute State Medicaid programs will often pay medical expenses for beneficiaries who then seek and obtain recovery from a third…
If nothing else, media coverage of the “fiscal cliff” debates have made most Americans aware that federal spending is outpacing federal revenue, thereby fueling a massive—and growing—federal budget deficit. It is also likely that most people have heard that Social Security and Medicare, the two largest “entitlement” programs, are major contributors to this budget crisis.
Most Americans probably do not know how many entitlement programs there are, how much is spent on them, and how they have grown in the past fifty years or so, all of which are well-documented in this compact book by Nicholas Eberstadt entitled A Nation of Takers. Moreover, it is unlikely that most persons who receive benefits from the largest of these programs see themselves as “takers,” in the sense used by Eberstadt.
If (as looks likely) a significant number of states decline to participate in Obamacare’s “exchanges” or in its Medicaid expansion (or both), I wrote last week, the Affordable Care Act may well crumble and collapse within the President’s term in office. Herewith a few additional thoughts, occasioned by news from the Beltway swamp.
AEI’s J.D. Kleinke has a long, eye-opening Forbes piece on the latest fads and foibles in the health care market. Aetna and Wellpoint have been buying up health (managed) care providers that principally service Medicaid populations. The valuations are rich: Wellpoint paid a 50 percent market price premium and about 18.4 forward PE for Amerigroup.
Behind this “Fools’ Gold Rush” is, of course, the Affordable Care Act, which (if implemented) will unleash mass migrations on a scale last seen when the frontier was still open—for example, from private and state plans into “exchanges” or Medicaid. Among the migrants are an estimated 9 million “dual covered” folks who are currently covered under Medi-care and –caid and will eventually be moved entirely into Medicaid. With something like $300 billion in revenues on the table, the betting is that there’s money to be made in that market. But how?
John Hood has a compelling piece in this week’s National Review, arguing that governors should “Say No to Medicaid Expansion.” Even though Obamacare offers states a 100 percent reimbursement rate for newly eligible enrollees, states are rightly nervous about getting stuck with hidden costs:
I have spent the last several days reading and re-reading the opinions in NFIB v. Sebelius, hoping to find a unifying “theme” to organize all my thoughts about the case before posting about any of them. This exercise has left me with a deeper appreciation of how blogging differs from other forms of expository writing; a headache; and a vague sense that NFIB v. Sebelius is in part a case about sovereignty (as I had thought when I submitted this amicus brief to the Eleventh Circuit).
Yesterday’s post described a sharp sectional divide in contemporary American federalism: pro-competitive states versus pro-cartel states. The divide holds across Obamacare/Medicaid, labor, environmental, tax, and cultural issues. Here is the basic map again (the competitive coalition appears in red, the cartel cabal in blue):
Today, as promised, some thoughts on what the sectional divide might mean for American politics and federalism.