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HillaryCare, On the Installment Plan

February 03, 2009

By David Gratzer

Are you a banker? These are tough times. Your shrewd idea to offer subprime mortgages to people who didn't qualify for a credit card has proven less than stellar and led to your company's share price dropping 95%. Your golfing buddy even transferred his fourth mansion's deed to his wife in anticipation of the coming shareholder lawsuits. And your spouse joined a support group.

But at least you can take comfort in knowing that Congress is thinking about you. Even if you lose your job in the next corporate shake-up, you'll qualify for some sort of government health-care hand-out. Indeed, after your million-dollar severance package, you could still be eligible for Medicaid.

* * *

Tax cuts. Infrastructure programs. Public works. Though its effectiveness may be debatable, the House stimulus bill includes much meant to help the economy. It also includes, to steal a line from the Wall Street Journal, House Democrats' forty year wish list of proposals. Among these: several health-care measures. Under the House bill, more than 1 in 7 dollars of the $800+ billion will be spent on expanding health-care programs to cover the unemployed and to further subsidize Medicaid. Collectively, these efforts will redefine the American safety net and rebrand government health care.

What exactly does Washington plan on doing under the House bill? Start with an expansion of Medicaid. Since 1965, the program has a clear mandate to assist the poor and disabled; House Democrats seek to change it. The House stimulus bill would cover everyone (and their families) who is receiving unemployment benefits regardless of wealth.

In fact even if some states wanted to focus the program more, they would have no ability to implement means testing. The bill specifically states: "No income or resources test shall be applied with respect to any category of individuals." Call it the millionaire bankers' clause. But why would states object? Whereas Medicaid is traditionally a shared federal-state responsibility, Washington would cover 100% of costs for the unemployed through December 2010.

There is also money to further subsidize Medicaid, pushing up the overall federal contribution in the federal-state program—essentially a bailout for states. And there is also a subsidy for former employees seeking to continue their health insurance. Under the Cobra program, former employees have that option, but need to basically pay the full premium. The House stimulus bill would require the federal government to pony up 65% of the premium. Again, no means testing.

"It's raining money," jokes Rep. Michael Burgess (R-TX). And, yes, the price tag of the above measures will be stiff.

Ah, if that was the only problem.

Here's the bigger issue: changing the social safety net now may prove difficult to undo in the future. Once the rolls have been expanded, many—in the state capitals and in Congress—will hesitate to reverse these so-called crisis measures. Millions lose coverage as Washington cuts back, newspaper headlines could read. Stories would include hard-luck tales of people out of luck because Congress didn't continue its generosity.

And even if Medicaid reverts back to its intended role, the Democratic strategy is obvious. Democrats aren't seeking to stimulate the economy. They are rebranding government health care. For a working class family having hit hard times, a brief stint on the Medicaid rolls will be a relief. Polling suggests that Americans don't want government-run heath care—that will soften when millions give it a brief try. The House bill reinvigorates American liberalism, providing it with a clear goal: reducing working class angst.

This week, the Senate will take up the stimulus bill. Some Republican and Democratic senators have questioned the version passed by the House last Wednesday. Senator Hutchinson (R-TX), in particular, is challenging the revised social safety net. She can ask her colleagues a simple question: why do they think that millionaire bankers should qualify for government-subsidized health care?

Such an effort will stem the Democratic efforts—for now. But the larger question for those opposed to government-run health care is this: what can we offer in the place of Washington's generosity?

Original Source:



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