States Past Spending Coming Back to Haunt Them

Earlier in the decade, most states’ income exceeded their expenditures and so the states had several options: give it back to the taxpayers, put it into a “rainy day” fund, or spend it. As we know, most of the states decided to spend it. Now that we are in the midst of a significant budget crisis for most states, those decisions are coming back to haunt them, and as a result, states like Arizona are looking to cut very deeply, starting with two key health care programs.

First, the state is looking to eliminate its Children’s Health Insurance Program — a program funded jointly between federal and state governments. The program is expensive and many studies have shown that much of the money is spent in replacing private coverage with state coverage (25 to 50 percent according to a Government Accountability Office study). Arizona is also looking to end the Arizona Health Care Cost Containment System — Arizona’s version of Medicaid. These significant cuts would remake the state’s social welfare system. The moves would also protect the states from additional costs if current versions of federal reform do move forward.

It pays to pay for care

Before Canadians could legally pay for private medical care, they were stuck on waiting lists until their condition became dire. Americans on Medicare, in contrast, used their income to pay for specialist visits when they felt a need.

That is not the conclusion of a paper in the January 2010 International Journal of Health Services, a publication more driven by political beliefs than by facts, or of a prominent progressive in North Carolina, but it is a logical conclusion from the findings.

The study used data from a 2002-2003 health survey. Canada’s Supreme Court did not strike down provincial government-run health insurance monopolies until 2005. So Canadians age 65 and older had to go on a waiting list instead of seeing a specialist. As Sally Pipes explained, her mother died in Canada because it took too long to get the care she needed for her colon cancer.

That is why North Carolina should follow the lead of Arizona and protect our freedom of health care choice.

Crossposted at johnlocke.org

More Endorsements for Right to Choose

“Former GOP presidential candidate Steve Forbes and Republican U.S. Rep. John Shadegg of Arizona endorsed a proposal on Tuesday that will appear on the November ballot and ask voters whether they want state-guaranteed protections for health care.”

Nothing surprising there, given the two men’s past statements on health care, but it’s good news all the same.

You can read more about the idea at Arizonans for Healthcare Freedom. Be aware that the home page opens with a small video window, so adjust the volume on your computer accordingly.

Mayo Clinic Says No to Medicare

If politicians declare a “right” to health care by sticking you in a government program, does the right do you much good if you can’t see the doctor of your choice?

That’s not a hypothetical question, but instead a real problem facing people in Medicaid and Medicare. Governments give unreasonably low payments to doctors and other health care professionals, so as to maximize the number of people they “cover.”

Yet at some point, health care professionals start to turn away patients who come to them with government scrip. We’ve seen that in Medicaid, and to a lesser extent in Medicare.

Now, one of President Obama’s favorite models of health care organizations, the Mayo Clinic, says it will stop accepting Medicare payments at its Arizona location.

“More than 3,000 patients eligible for Medicare, the government’s largest health-insurance program, will be forced to pay cash if they want to continue seeing their doctors at a Mayo family clinic in Glendale, northwest of Phoenix, said Michael Yardley, a Mayo spokesman.”

Why? Medicare pays too little to be worth the trouble to doctors. So Medicare enrollees–in effect, everyone 65 and over–have to pay, even though they’re in a “free” program.

As one physician quoted in a Bloomberg.com story on the development said, “If you truly know your business costs and you are losing money, it doesn’t make sense to do more of it.”

State Sovereignty Resolutions: The NY Times Weighs In

A number of state legislatures are considering resolutions affirming their constitutionally-based resistance to the federal government taking over every American’s access to medical services.

According to the New York Times, legislators sponsoring these resolutions are merely carrying water for various corporate interests in the health sector.   Conspiratorially, the NY Times asserts that the idea of state sovereignty over health care popped up at the Goldwater Institute in Arizona, and was then picked up as a theme at the American Legislative Exchange Council (ALEC).  The NY Times asserts that this was because ALEC’s Health & Human Services Task Force is “overseen” by a four-member panel composed of representatives from the Blue Cross/Blue Shield Association, Johnson & Johnson, Bayer, and Hoffmann-La Roche.

Good Grief!  I am a private-sector member of the ALEC HHS Task Force, and I can assure the world that nobody “oversees” it.  It is a lively forum of discussion about model legislation that adheres to principles of limited government.  The push for state-sovereignty resolutions is led by legislators such as Linda Upmeyer (Iowa) and Rep. Nancy Barto (Arizona), supported by various think-tank members, such as Clint Bolick of the Goldwater Institute and myself.  (I testified at a committee hearing in Arizona on that state’s proposed resolution.)  Dr. Eric Novack, an orthopedic surgeon, launched the campaign for state sovereignty over health care.

I would be amazed if the Blue Cross/Blue Shield Association, Johnson & Johnson, Bayer, or Hoffmann-La Roche, cared a hoot about state sovereignty over health care.  But according to the NY Times, appeals to limit federal power over access to medical services can only come from corporate lobbying.

Mentally Ill Linger in Substandard Arizona Program

The mentally ill in Arizona linger in substandard conditions, even as politicians wrangle over what to do next. (Still want to be in a government health care plan?) For nearly 30 years, advocates for the mentally ill have waged a legal battle against the state.

According to the Arizona Republic, “an independent audit by a court-appointed monitor this year found the current system fails nearly all of its patients on key measures.”

I’ve known a few people, including some close friends, who have been in and out of mental institutions with serious conditions, including a bipolar disorder and schizophrenia. The ones who have fared the best are the ones who have been able to pay for treatment out of private sources.

Government Money, Government Menu

Parents routinely struggle to get their children to eat veggies. Now it looks like government is going on an “eat your veggies” mission as well.

The Arizona Republic reports that the WIC program (free food for women and children) will now make sure that some of the money its recipients spend on food can’t be spent on anything but fruits and vegetables. WIC is also going after whole milk.

Arizona’s chief of the Department of Health Services thinks that this is all too the good, and that it ought to be applied to the food stamp program, too: “We really have the opportunity to transform the way people eat.”

I would raise all sorts of civil liberties objections. Then again, if you’re eating from the government table, can you complain much about what is served?

Beware of “free” health care. The same logic applies.

When State Government Fails

Here's another reminder of why we need to make health care and health insurance cheaper: Arizona, facing a budget shortfall, will drop 10,000 people from one of its insurance programs.

To show you how bizarre public policy makes health care, these people are adults who are enrolled in a program for … children.

Anyway, I suspect that most of them are people who had insurance coverage through work, lost their jobs, and now have trouble making COBRA payments. Now they're hostage to the financial condition of their state government.

Had they been able to purchase individual insurance in a competitive marketplace, it's possible they would have been able to buy cheaper insurance that fits their own needs (rather than what the employer chose) and which would stay with them into unemployment.

Being unemployed always brings financial challenges, but thanks to the many distortions introduced by our public policies, the adjustment seems to be harder in health care and health insurance than other needs such as food or shelter.

Medicaid May Drive Sales Tax Hike in Arizona

Is it possible for government to run health care, long-term, without resorting to either rationing or tax hikes? In some alternate world perhaps, but not likely here and now. 

Consider Arizona. One in five citizens in the state are in Medicaid, a program that depends on both federal and state funding.  

That's putting the state on a course for trouble. The governor, a Republican, proposes raising the sales tax by another percentage point.

State Rep. Nancy Barto, however, says "We have currently over 1 out of 5 persons in Arizona on [Medicaid]. That says to me right now we're already — government's already — doing too much."

Indeed. The state ought to pursue other avenues, such as looking at laws that inflate the cost of medicine and health insurance.

U.S. Index of Health Ownership 2nd Edition Is Here

Pacific Research Institute has published the 2nd edition of the U.S. Index of Health Ownership, the only ranking of health care in the states that uses criteria of individual choice.

Americans lack the basic freedom to make their own health care decisions. The Index measures the degree to which individuals, be they patients, health professionals, entrepreneurs, or taxpayers, “own” the health care in their states.

The lack of health ownership is a real problem. Almost half of the country’s health care spending is in the hands of the government, instead of patients themselves. The other half is governed by regulations inflicted upon doctors, health plans and patients.

The Index uses 24 variables to quantify how state laws and regulations affect the liberty of citizens involved in state government health plans (primarily Medicaid), the private health-insurance market, and the provision of medical services. It also assesses the effect of medical tort on people’s freedom to engage health services.

Alabama, Montana, Nebraska, North Dakota, and New Hampshire finished in the top five, as the states that allow their citizens the highest degree of health ownership. Alabama leads the pack primarily because of a lightly regulated private insurance market, and good control of state government programs. Also, the state performs well on medical tort indicators. Alabama’s regulatory environment for providers favors competition, and government health programs run more effectively than in most states.

New York, Massachusetts, Rhode Island, Vermont, and North Carolina rounded out the bottom five, as the states in which the government has taken the most undue control of health care from its citizens. This is the second year that New York was in last place. The state suffers from government health-care programs that are out of control, a grossly overregulated private-insurance market, and almost completely uncompetitive provider markets.

A full listing of all 50 states and their rankings is contained in the Index.

The Index will give concerned citizens a good basis to demand reforms from their state politicians that will put American families in charge of American health care, instead of government and special interests.