To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Wednesday, January 17, 2007

Wal-Mart Wins Important Health Insurance Case

A federal appeals court ruled today in favor of Wal-Mart in a case that has national implications. It overturned a Maryland law that forced large employers to spend at least 8% of their payrolls on health care with the goal that their employees would not seek Medicaid.

The problem that the states have is that Medicaid is so expensive and expansive.
Medicaid’s numbers are eye-popping. It is now the nation’s largest health insurance program, covering 59 million poor people (53 million in traditional Medicaid and 6 million in the State Children's Health Insurance Program), or one in six Americans, according to the U.S. Department of Health and Human Services. It pays for 37 percent of all births in the United States and helps foot the bills for more than 60 percent of all patients in nursing homes.

The impact on state budgets is huge. Accounting for 22 percent of state spending,
The best way to expand coverage of the poor would be to reduce the coverage mandates on Medicaid and make it less of a Rolls Royce plan and make it more basic and affordable to states.

On the private side of the debate, unfortunately, the two governors, Romney and Schwarzenegger, who have acted on the crisis about health insurance are proposing to or have forced everyone in their state to pay for insurance, without any regulatory relief. It is state regulations that make insurance so expensive, as plans are mandated to cover everything from IVF treatments to podiatry and are forbidden to offer less expansive plans. Romney's plan here and Arnold's here.

Their thesis is that unless all people, including the young and the healthy, pay for health insurance there will be no way to pay for the yuppie couple to get IVF or the elderly to get expensive end of life care. And that is the problem. The Romney and Arnold plans basically add up to another tax, like social security.

Interesting and surprising NPR discussion here.