Ethics & Public Policy Center

The Bald-Faced Hypocrisy of Progressives’ Refusal to Reform Medicaid

Published in The Week on March 9, 2017

There is a lot to dislike about the new GOP House ObamaCare replacement bill. But it contains at least one excellent plank: its reforms to Medicaid, America’s government-run insurance scheme for the poor.

Unsurprisingly, progressives have eagerly criticized the GOP’s Medicaid reform as an attack on the poor. This is nonsense.

Medicaid is a disaster. It is, by a mile, the worst health insurance scheme of any kind in the developed world. A number of studies have suggested that people on Medicaid have no better, and often worse, health outcomes than those without insurance.

To take just one example, a landmark University of Virginia study suggested that people on Medicaid are 13 percent more likely to die from surgery than those without insurance. This study looked at 893,658 operations from around the U.S. from 2003 to 2007, and controlled for age, gender, income, geographic region, operation, and 30 medical conditions. Similarly, the so-called Oregon study (since it was done in Oregon) showed that Medicaid recipients are either no better off, or worse off, in terms of health outcomes, than those without insurance.

The problem with Medicaid isn’t money. The United States government spends nearly half a trillion dollars a year on Medicaid. Maybe in a perfect world we’d be spending more, but surely if the net effect of all that money is that the health outcomes are exactly the same (or worse!) than spending zero dollars, the problem is not in the money. The problem is the way the program functions, which has barely been tweaked since 1965.

Conservatives have lots of ideas about how to fix this, and have been pushing them for literally decades. Now, maybe those ideas leave a lot to be desired. But when you consider the fact that Medicaid is on balance worse than doing nothing at all, if you cared as deeply about the lives and flourishing of poor people as progressives say they do, maybe you’d be willing to try anything.

The problem is that progressives have, relentlessly and consistently, demagogued this issue. Any conservative attempt at Medicaid reform is immediately portrayed as an attempt at mass murder. During the passage of ObamaCare, which achieves most of its coverage increases by expanding Medicaid, the Obama White House rejected all Republican attempts to “trade” Medicaid expansion (a progressive goal) for Medicaid reform (a conservative goal), inevitably justifying itself by claiming that any reform would hurt the poor, pretending not to know that they are already being hurt.

During the 2012 presidential race, the Obama campaign ludicrously described then-vice presidential nominee Paul Ryan’s proposal to “block grant” Medicaid as a 30 percent cut; given that the whole concept of a block grant is to spend the same amount of money, but administer it locally, this is like claiming that 10 equals 7.

As it happens, RyanCare 2.0’s reform of Medicaid isn’t exactly a block grant, but a per-capita allotment. (This idea was first floated by Bill Clinton in 1995. After all these years of being told conservatives couldn’t criticize ObamaCare because it was “originally a Republican idea,” I imagine now no progressives will criticize RyanCare’s Medicaid reforms.) But the basic idea is the same: Give the states money to run Medicaid, and let them decide how to do it locally. This is a good idea.

Why? Because the problem is not how much money is spent on the program, it’s how it’s designed, so it makes sense to change the design. As is, Medicaid is a hybrid state-federal structure, which should be clarified. And more generally, when it comes to an incredibly complex field like health care, it’s generally better to try several localized approaches at once rather than just one centrally mandated one.

Again, the current program is not even close to good. It is an abysmal failure. Many reforms don’t achieve all they set out to do, but it’s hard to imagine a reform that could do worse than the status quo. And, again, the political attitude of the progressive camp on this score is not to propose alternatives, but simply to decry any alternative as tantamount to a war on the poor.

There are many issues on which reasonable people can honestly disagree about what’s best. This is not one of them. There are too many issues, Medicaid being a big one, public schools being another, where progressives are just so obviously, evidently, and objectively failing to adequately help the worst-off in society (while at the same time being infuriatingly self-righteous about it), simply because of their ideology, which dictates that public dollars spent, not results on the ground, is the criterion for successful public policy.

Pascal-Emmanuel Gobry is a fellow at the Ethics and Public Policy Center.

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