ARRA News Service
News for social, fiscal & national security conservatives who believe in God, family & the USA. Upholding the rights granted by God & guaranteed by the U.S. Constitution, traditional family values, "republican" principles / ideals, transparent & limited "smaller" government, free markets, lower taxes, due process of law, liberty & individual freedom. Content approval rests with the ARRA News Service Editor. Opinions are those of the authors. While varied positions are reported, beliefs & principles remain fixed. No revenue is generated for or by this site - no paid ads - no payments for articles. Fair Use doctrine is posted & used.
Editor/Founder: Bill Smith, Ph.D. [aka: OzarkGuru & 2010 AFP National Blogger of the Year]
Contact: (Pub. Since July, 2006)
    Home Page

One of the penalties for refusing to participate in politics is that you end up being governed by your inferiors. -- Plato (429-347 BC)

Tuesday, April 26, 2011

Gov. Mike Beebe vs. Medicaid Reform

Michael F. Cannon
Curtis Coleman, Contributing Author: After House Budget Committee Chairman Paul Ryan unveiled his plan to reform federal Medicaid funding by creating a urgently needed spending cap and reducing states’ ability to shift the cost of their Medicaid programs to other states, Arkansas’ Governor Mike Beebe, along with 16 other governors, sent a letter to congressional leaders to say they “strongly oppose” it.

Michael F. Cannon, director of health policy studies at the Cato Institute and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It, wrote this column on this issue for Kaiser Health News.

Shortly after House Budget Committee Chairman Paul Ryan, R-Wis., unveiled his plan to convert federal Medicaid funding to a block grant, 17 governors issued a letter to congressional leaders to say they “strongly oppose” it.

Ryan, like most of his Republican comrades, hasn’t always been on the side of fiscal responsibility. He voted for the Troubled Asset Relief Program, various bailouts, and that unfunded Republican entitlement program, Medicare Part D. On Medicaid reform, however, Ryan has the better side of the argument.

The governors write that block grants “would shift costs and risk to states.” In reality, the matching-grant system these governors seek to preserve is a massive cost-shifting scheme. Block grants would reduce this phenomenon.

For every additional dollar a high-income state spends on its Medicaid program, the federal government sends the state one matching dollar. Low-income states get as much as $4 from Washington for each additional dollar they spend.

Therefore, every time a governor expands his or her state’s Medicaid program, the federal government’s system of matching grants effectively shifts 50 to 80 percent of the expansion’s price tag to taxpayers in other states.

The same is true in reverse. If governors tolerate waste, fraud and abuse, the matching-grant system shifts 50 to 80 percent of the cost to taxpayers in other states.

Today’s system even shifts costs across generations. Matching grants are such a cash cow that states hatch all manner of schemes to “pull down” as much federal money as possible. (One common practice is for states to secure federal dollars by pretending increase their Medicaid outlays, but then recapturing those outlays by taxing providers.) But each time they do so, states add to the federal deficit, which shifts the cost of current consumption to future taxpayers.

What’s really upsetting these governors is that block grants would reduce their ability to shift the cost of their Medicaid programs to other states. Under a block-grant system, Washington would give each state a fixed amount of money that would neither rise nor fall with the amount the state spends. Governors would be free to expand their programs, but they would have to come up with 100 percent of cost of those expansions.

These governors warn that having to choose “between increasing taxes, cutting other state programs, or cutting eligibility, benefits, or provider payments” would put them in an “untenable” position. What they mean is that they want to preserve the open-ended, perennial bailout that Medicaid has always offered. But since there is no more money in Washington for bailouts or anything else, perhaps a second-best option would be to ask the nation’s governors to start taking responsibility for their Medicaid policy choices.

Finally, the governors call for “federal policy that creates cost savings, not cost shifting.” As luck would have it, block grants would do just that, by encouraging states to reduce Medicaid fraud and abuse. Various experts estimate that fraudulent and other improper payments account for an estimated 10 to 40 percent of this $466 billion program.

Economists estimate that Medicaid and similar programs crowd out private coverage at rates as high as 60 percent. That suggests there are millions of people on the Medicaid rolls who could obtain coverage on their own, and that states could reduce the cost of the program by targeting subsidies to the truly needy. Fraud and abuse have become so prevalent in Medicaid largely due to the perverse incentives created by the matching-grant system.

Combating Medicaid fraud and abuse is currently a low-return proposition for state officials. Providers inevitably chafe under the additional paperwork and investigations necessary to police fraud. Currently, if a state inflicts enough of this political pain to eliminate $1 of fraud, it only keeps 20 to 50 cents; the rest goes back to Washington. As a result, governors quite rationally make policing fraud and abuse too low a priority.

Under block grants, states would keep 100 percent of the savings from rooting out fraud and abuse, which would encourage states to spend their Medicaid dollars wisely, reduce the cost of the program, and enable states to do more with fewer resources. The governors’ position is looking more tenable already.It wasn’t their intention, but those 17 governors inadvertently demonstrated why block grants are necessary.
Curtis Coleman is the President of The Curtis Coleman Institute for Constitutional Policy and contributing author to the ARRA News Service.

Tags: Cato Institute, fraud, Medicaid, Michael F. Cannon, Mike Beebe, Paul Ryan, Arkansas, Debt and Deficit, Health Care Reform, Curtis Coleman, The New South Conservative To share or post to your site, click on "Post Link". Please mention / link to the ARRA News Service. Thanks!
Posted by Bill Smith at 2:32 PM - Post Link


Post a Comment

<< Home

View U.S. National Debt

Don't miss anything!
Subscribe to the
ARRA News Service
It's FREE & No Ads!

You will receive a verification email
& must validate you subscribed!

You Then Receive One Email Each AM
With Prior Days Articles / Toons / More

Also, Join us at:

Recent Posts:
Personal Tweets by the editor:
Dr. Bill - OzarkGuru - @arra
#Christian Conservative; Retired USAF & Grad Professor. Constitution NRA ProLife schoolchoice fairtax - Editor ARRA NEWS SERVICE. THANKS FOR FOLLOWING!

Action Links!
State Upper & Lower House Members
State Attorney Generals
State Governors
The White House
US House of Representatives
US Senators

Facebook Accts - Dr. Bill Smith
ARRA News Service
Arkansans Against Big Government
Alley-White Am. Legion #52
Catholics & Protestants United Against Discrimination
End Taxpayer Funding of NPR
Overturn Roe V. Wade
Prolife Soldiers
Project Wildfire 4 Life
Republican Liberty Caucus of Arkansas
The Gold Standard
US Atty Gen Loretta Lynch, aka Eric Holder, Must Go
Veterans for Sarah Palin
Why Vote for Hillary (Satire)
FB Groups:
Arkansas For Sarah Palin
Arkansas Conservative Caucus
Arkansas County Tea Party
Arkansans' Discussion Group on National Issues
Blogs for Borders
Conservative Solutions
Conservative Voices
Defend Marriage -- Arkansas
FairTax Nation
Arkansas for FairTax
Friends of the TEA Party in Arkansas
Freedom Roundtable
Pro-Life Rocks - Arkansas
Republican Network
Republican Liberty Caucus of AR
Reject the U.N.


Request Via
Article Comment

Links to ARRA News
A Patriotic Nurse
Agora Associates
a12iggymom's Blog
America, You Asked For It!
Americans for a Free Republic
America's Best Choice
ARRA News Twitter
As The Crackerhead Crumbles
Blogs For Borders
Blogs for Palin
Blow the Trumpet Ministry
Boot Berryism
Cap'n Bob & the Damsel
Chicago Ray Report
Chuck Baldwin - links
Common Cents
Conservative Voices
Defeat Obama's Agenda
Diana's Corner
Greater Fitchburg For Life
Lasting Liberty Blog
Liberal Isn't Amy
Maggie's Notebook
Marathon Pundit
Patriot's Corner
Right on Issues that Matter
Right Reason
Rocking on the Right Side
Saber Point
Saline Watchdog
Secure Arkansas
Sultan Knish
The Blue Eye View
The Born Again Americans
TEA Party Cartoons
The Foxhole | Unapologetic Patriot
The Liberty Republican
The Lid
The Maritime Sentry
The O Word
The Path to Tyranny Blog
The Real Polichick
The War on Guns
Twitter @ARRA
Underground Notes
Warning Signs
Women's Prayer & Action

Editor's Managed Twitter Accounts
Twitter Dr. Bill Smith @arra
Twitter Arkansas @GOPNetwork
Twitter @BootBerryism
Twitter @SovereignAllies
Twitter @FairTaxNation

Editor's Recommended Orgs
Accuracy in Media (AIM)
American Action Forum (AAF)
American Committment
American Culture & Faith Institute
American Enterprise Institute
American Family Business Institute
Americans for Limited Government
Americans for Prosperity
Americans for Tax Reform
American Security Council Fdn
AR Faith & Ethics Council
Arkansas Policy Foundation
Ayn Rand Institute
Bill of Rights Institute
Campaign for Working Families
CATO Institute
Center for Individual Freedom
Center for Immigration Studies
Center for Just Society
Center for Freedom & Prosperity
Citizens Against Gov't Waste
Citizens in Charge Foundstion
Coalition for the Future American Worker
Competitive Enterprise Institute
Concerned Veterans for America
Concerned Women for America
Declaration of Am. Renewal
Eagle Forum
Family Research Council
Family Security Matters
Franklin Center for Gov't & Public Integrity
Freedom Works
Gingrich Productions
Global Incident Map
Great Americans
Gold Standard 2012 Project
Gun Owners of America (GOA)
Heritage Action for America
David Horowitz Freedom Center
Institute For Justice
Institute for Truth in Accounting
Intercollegiate Studies Institute
Judicial Watch
Less Government
Media Reseach Center
National Center for Policy Analysis
National Right To Work Foundation
National Rifle Association (NRA)
National Rifle Association (NRA-ILA)
News Busters
O'Bluejacket's Patriotic Flicks
Open Secrets
Presidential Prayer Team
Religious Freedom Coalition
Renew America
Ron Paul Institute
State Policy Network
Tax Foundation
Tax Policy Center
The Club for Growth
The Federalist
The Gold Standard Now
The Heritage Foundation
The Leadership Institute
Truth in Accounting
Union Facts

Blogs For Borders

Reject the United Nations

Adopt Our Troops in Prayer

Thousands of Deadly Islamic Terror Attacks Since 9/11

FairTax Nation on FaceBook
Friends of Israel - Stand with Israel
Blog Feeds
Syndicated - Get the ARRA News Service feed Syndicated!
ARRA Blog Feed

Add to Google Reader or Homepage

Add to The Free Dictionary

Powered by Blogger

  • To Exchange Links - Email:!
  • Comments by contributing authors or other sources do not necessarily reflect the position the editor, other contributing authors, sources, readers, or commenters. No contributors, or editors are paid for articles, images, cartoons, etc. While having reported on and promoting beliefs associated with the former Arkansas Republican Assemblies (ARRA), this blog/site is controlled and supported by the editor. This site/blog does not advertise for money or services nor does it solicit funding for its support.
  • Fair Use: This site/blog may contain copyrighted material the use of which has not been specifically authorized by the copyright owner. Such material is made available to advance understanding of political, human rights, economic, democracy, and social justice issues, etc. This constitutes a 'fair use' of such copyrighted material as provided for in section Title 17 U.S.C. Section 107 of the US Copyright Law. Per said section, the material on this site/blog is distributed without profit to readers to view for the expressed purpose of viewing the included information for research, educational, or satirical purposes. Any person/entity seeking to use copyrighted material shared on this site/blog for purposes that go beyond "fair use," must obtain permission from the copyright owner.
  • © 2006 - 2018 ARRA News Service
Creative Commons License
Creative Commons Attribution Noncommercial Share Alike 3.0 Unported License.