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Medicaid Expansion Net Plus for State Budgets

Bob Mercer grumbles about expanding Medicaid and socialism; Douglas Wiken says Mercer doesn't know what he's talking about.

I suggest we look at the big picture on Medicaid expansion. Yes, if we accept the deal the Obama Administration is offering us under the Affordable Care Act, South Dakota will spend more on Medicaid. But if every state expands Medicaid, we will see a more efficient allocation of resources. According to this Kaiser Family Foundation analysis, nationwide expansion of Medicaid would insure millions of poor working Americans and reduce the costs of uncompensated care. The states collectively would spend $8 billion more over the next ten years. They would save $18 billion that they currently spend paying hospitals for the care they provide to uninsured folks who can't foot their bills.

Now sure, the fiscal benefits accrue more in bigger states. So in a way, South Dakota would providing a marginal subsidy to other states. But given our red-state welfare status, that differential could be written off as a step toward paying our fair share. ("Fair share" here is a relative term: remember that the ACA promises the feds will pay 100% of the expansion costs right now and 90% after 2016.) And don't forget: we're still helping tens of thousands of our own people get affordable health care.

Both Bob Mercer and I may misuse the word socialism. But sometimes, cooperative social action like the expansion of Medicaid can be a net plus for state budgets.

61 Comments

  1. Rorschach 2012.12.11

    If poor people would just incorporate, the Governor would lavish taxpayer money upon them.

  2. Dougal 2012.12.11

    Funny thing they call these entitlement programs. But who's 'entitled' here? Wal-Mart and South Dakota employers who keep average paychecks here 51st in the nation make it imperative that funds to feed, shelter and provide medical care are spent each year to keep the working poor and their children from starving or freezing to death. Your taxes subsidize the low pay and low benefits of cheap labor jobs. Yet, the conservatives call this the free market place, from which solutions are boundless as long as they are allowed to operate without paying their percentage share of taxes and without staying within the lines of safety and health regulations. They don't want immigration reform because illegal aliens provide a fresh crop of slave labor who can be exploited with lousy pay and working conditions and who can't protest their exploitation.

    The entitlements subsidize the rich to keep screwing the government over for more and more money. If you're looking for a tax leech, look to the 1 percent.

    It's interesting that social security was created at a time when the poorest demographic in the land was senior citizens who were farmed out to chicken shacks where they langered in filth until they died. Today, the poorest demographic is children.

  3. Donald Pay 2012.12.11

    The sort of article Mercer pumps out is indicative of the problem with modern journalists. People who pump out this crap have forgotten what real reporting requires, and have turned to polemics.

    You will notice he never goes very deeply into the matter, only looking at surface costs and using buzzwords to make people mad, rather than enlightened. His screed is meant only to curry favor with the elites.

    I did a story in the early 1990s that followed a specific example of a young woman with no insurance having and having emergency surgery. You will notice not one example in Mercer's piece about the real impacts on a person in this situation, or on the local governments, who end up picking up the tab. Taxpayer's and people paying insurance premiums are already paying the cost, but Mercer doesn't want that to get in the way of calling some modest improvements in Medicaid as "socialism."

  4. Bill Fleming 2012.12.11

    Cory, "Both Bob Mercer and I may misuse the word socialism."

    Well yeah, maybe... Let's see if we can clear it up.

    Wouldn't socialized medicine mean that we the people own and administer the hospitals and clinics and employ the doctors?

    And pay for everything via tax dollars?

    Kind of like we own and administer the schools and hire the teachers?

    ;^)

  5. Dougal 2012.12.11

    The arguements over socialism is dumb and I think that may be Bob's point in a rather obtuse way. The real discussion that won't take place is what do the American people need to maintain a humane, functioning and growing economy that rewards work fairly and continually provides opportunity to adequately feed, shelter and provide health care for all Americans. The discussion we get undermines the discussion that needs to occur in every community in this nation.

  6. Dougal 2012.12.11

    Sorry. Poor grammer and spelling ... arguments over socialism ARE dumb ...

  7. Bob Mercer 2012.12.11

    The point was that if we are going to have government programs we need to generate the money to pay for them. We aren't fully paying for them at the federal level. We argue about whether we're paying enough for them at the state level and the local level. We built pension and retirement systems based on long-term investment strategies whose earning assumptions no longer are valid and therefore aren't generating sufficient revenue to fully pay for them long term. The debate is how to recalibrate, whether by collecting more revenue or by reducing benefits or by both. It is difficult to endorse spending more on benefits when we are putting a portion of the current benefit costs on credit, whether it's Medicare, Medicaid or Social Security.

  8. Richard Schriever 2012.12.11

    It always fascinates me when someonestarts talking about "investment strategies" as if they were somehow a kind of obscure arcane financial mechanism that magically "creates wealth" out of pure thiught - or imagination - a trick of the mind. Realty is, the PROFITS that make investing work are created by actual people actually working and actiually producing something - and NOT by the "strategists" behind the curtain. A discussion over the so-called "benefits" that might be spent on those ACTUAL workers who produce the very wealth that the strategists lay claim to as if they themselves produced it is really a discussioin over how much of the wealth should go to those who actually produced it - vs. to the strategic "investors". REFRAME the conversation - you'll get to the underlying social dynamcs.

  9. Monty 2012.12.11

    Estimates for 2009 suggested insured families paid $1100. more for health insurance because providers tack costs for uninsured patients in to the formula for determining costs for coverage and reimbursements. What will cost less in the long term, paying for the uninsured in my premiums or paying more taxes for expanded Medicaid coverage?

  10. Douglas Wiken 2012.12.11

    Mercer, your point was obscured by your inappropriate use of the term "socialism". Perhaps if you want to provide a service, point out the actual distinctions among capitalism, socialism, fascism, democracy, etc. Using the terms incorrectly contributes to ignorance rather than knowledge or an informed citizenry.

    We are not borrowing to make social security payments. The program is funded for several years. I think the previous rate of employment tax should be reinstated, but also the tax should apply to all income without limit.

  11. Bill Dithmer 2012.12.11

    BM this is what you are saying "We built pension and retirement systems based on long-term investment strategies whose earning assumptions no longer are valid and therefore aren't generating sufficient revenue to fully pay for them long term."

    And yet that is exactly what you want people to do when funding by voucher for their medical services, or doing away with SS and forcing people to invest for their future in the very same market that has failed the ones that were supposed to know what they were doing with pension money. How is that going to work any better for the common person then it did for the professionals?

    In another place here on the streets of Madville you will notice that DD is willing to go against the will of the people and give money to his rich friends to come to what is supposed to be the "best business climate in the nation." At the same time he is willing to tell those that cant afford insurance to just bend over and take it.

    I haven't heard any real solutions to these problems, only a bunch of bitching and moaning from the right. When are we going to get something other then bad gas trying to escape.

    The Blindman

  12. Donald Pay 2012.12.11

    Where does Mercer come up with this crap? Now he's claiming Medicare and Social Security are being paid on a credit card. That simply is factually not true. About all I can say is Mercer used to be a good journalist.

  13. Bob Mercer 2012.12.11

    Let's start with Don Pay: Go to the trustees report on Medicare and Social Security and read it for yourself. They are under-funded in part because of the payroll tax cuts in place the past two years. Congress covers those deficits by sending more money from the general fund. The general fund is running a trillion-plus deficit.

    As for Bill Dithmer: I don't advocate eliminating Social Security or advocate in favor of vouchers. I don't know where you got that.

    As for Doug Wiken: Read the trustees report on Social Security.

    As for Richard: Assumption of investment return is built into most if not all pension systems. SDRS for example has assumed, depending on the year, 7.25 to 8 percent annual rate of return in the past decade.

    Folks, I don't know what to say other than suggest that you do some simple research. Unless there was some massive tax increase snuck through, the Medicaid expansion at the federal level is based on borrowed money, because we already were running a deficit before the Affordable Care Act. Unless costs are reduced, revenue is increased, or some combination, we'll continue to run trillion-dollar deficits. If I'm living on partial credit, and I add more ongoing expenses, it's fair to say those additional expenses will be on credit, too, unless I find some other way to fully pay for those additional expenses through new revenue, reductions in other spending, or some combination of both.

    Or maybe I just don't understand bookkeeping. That's possible, too.

    As for Bill Fleming: Public schools rely on money raised through taxes, and they offer a free service to all children. But public schools, at least in South Dakota, don't operate with deficits. Public healthcare however contributes to the federal deficit because the costs increase, the coverage expands and the users increase while the means of paying for it through federal taxes doesn't keep pace.

    As my friend and former reporter Ross Heupel often used to say during legislative session (in his best Eureka accent): "Yeah, but how are you going to pay for that?"

  14. Bill Fleming 2012.12.11

    Thanks for the mention, Mr. Mercer. Mostly I was exploring the definition of "socialism" and poking a little fun at the whole absurd discussion of it by drawing parallels from one set of social services to another. Nothing personal, just pointing up the irony. At best, doesn't your rejoinder simply imply that for now we are better at financially managing our educational brand of "socialism" than we are our health care brand? And isn't that perhaps just a function of our having more experience administering the former than the latter?

  15. Dougal 2012.12.11

    And then there's the military budget to fund a defense strategy that is far, far larger than all of nation's threats combined. How are you going to pay for that? Why are you paying for a system that is still fighting the Cold War, not to mention the War on Terror? Why are troops still stationed in nations that we stopped warring with 65 years ago? Why are major oil corporations still getting tax credits?

    What are the real needs of the United States in 2013? What's more important, schools to build children or nuclear warheads to eliminate life on earth? And how are ya gonna pay for that?

  16. Owen Reitzel 2012.12.11

    But Mr. Mercer what is the answer to the healthcare problem?
    I've seen the Republicans-Thune and Noem among others- scream about how bad Obamacare is but offer no suggestions in return. I know Noem has talked about buying insurance across state lines and of course tort reform. neither of these will solve the problem. At least the Democrats are trying to fix the problem.

  17. Bob Mercer 2012.12.11

    Well, Owen, whatever we do, we should pay for it. That's the problem I'm discussing. Elected politicians listen to taxpayers and therefore don't want to raise taxes across the board, but they also listen to people such as you who want to fix something without paying for it. As for Dougal's point, the same is true: If we go to war, we should pay for war. And as for Bill Fleming, there is a big basic difference between public schools and healthcare: Teachers don't go to any means possible to save a life or cure a problem or diagnose a condition. Public schools offer a semi-standard curriculum, take it or leave it. Send 10 patients with similar conditions and varying coverage plans (or no coverage at all) to five different clinics and see what happens regarding the costs.

    Most of the comments here today are missing the point. None of these "services" -- war, schools, healthcare, highways, tax breaks, et cetera -- come without actual costs that must be paid (or offset) by someone.

  18. larry kurtz 2012.12.11

    The chemical toilet stores the wealth without taxation and the Mercers are paid to avoid reporting on it.

  19. larry kurtz 2012.12.11

    What part of 51st in ethics don't you people understand?

  20. Bill Fleming 2012.12.11

    Bob, we collect taxes to pay for it. In both instances. Where's the mystery?

  21. Owen Reitzel 2012.12.11

    We do have to pay for healthcare Mr. Mercer, I agree. But we are at the point where soemthing has to be done. Doing nothing is not an option. We also have to figure out why costs are so high and why more and more people are being turned down for healthcare or the fact we have the best healthcare system in the world and fewer people have access to it. As far as South Dakota goes we are one of the least taxed states in the country and it shows Educators are the lowest paid in the nation and are still under attack by our Governor.

  22. Dougal 2012.12.11

    Don't write a check you have no plans to cover. Right?

    This state's and this nation's elected officials largely have lost the ability to speak with each other. They speak at each other. There is little attempt at developing a quiet, sensible public dialogues that aren't a dog-and-pony show to explain budget priorities and tax policies. Regular folks who have real lives and responsibilities tune out or get tuned out. That doesn't provide an excuse for being tuned out, but that's the reality that allows the race to the bottom to occur unabated.

    I'd like to see an administration in Washington and in Pierre to list the objectives they wish to achieve, and then explain the "values" behind the goals and how they will make things happen -- including an honest, third-party verifiable accounting on money, time and human resources that are needed. I'd like to see a public that won't sucker in for non-answers or values before goals sales pitches. I'd like to see an alert press corp that isn't captive to the local and state deep-pocketed power cliques.

    An informed public. An informing press that does more than fluff or minimal reporting (is Investigative Reporters & Editors still around?). A choice of candidates who offer ideas, plans and ideology or fail the basic honesty test. These things are what I want for Christmas. This year.

  23. larry kurtz 2012.12.11

    Note that Mercer is off the clock.

  24. larry kurtz 2012.12.11

    SDACLU took Montgomery on today because the Argus Leader has been bought off, too.

    Die in your own filth, South Dakota.

  25. grudznick 2012.12.11

    I bet young Mr. Mercer has a life, Larry.
    We should get one, eh? Naw, I've already had one and am too old for another, but you sir could stand a little living.

  26. grudznick 2012.12.11

    Mexican Statehood for some of the tribes!!!

  27. Stan Gibilisco 2012.12.11

    If it increases our tax burden, it's good. If it decreases our tax burden, it's bad.

    Come on, fellow South Dakotans, let's cut out the selfishness and suck it up.

  28. Bree S. 2012.12.11

    Don't worry so, Larry. We are not moving backwards, we just have to ride out this rough patch to make to the other side.

  29. Bob Mercer 2012.12.11

    Never off the clock, except when at a baseball game, driving down the highway, walking my aging pup, playing catch with our son, visiting our daughter, playing 6 a.m. basketball, enjoying an Angry Orchard, eating a bratwurst... or really enjoying my favorite beverage, a cold glass of whole milk. Some things just can't be messed with.

  30. Bob Mercer 2012.12.11

    Did I mention Buck Owens and the Buckaroos have some really great Christmas albums? Check them out.

  31. Donald Pay 2012.12.11

    There is a real misunderstanding about how Social Security works. People need to read the report of the trustees with a little more background. Contrary to Mercer, the 2012 report debunks the misunderstanding that Social Security has entered a cash deficit situation. Social Security is not paying out more in benefits than it is collecting in income. If there were less income than outgo this year, the Trustees would be reporting that benefits would not be able to be paid in full during the remainder of 2012. That is not the case.

    Mercer forgets that Social Security has three revenue sources, not one: payroll contributions from employers and employees, income earned from the interest on or redemption of Social Security’s U.S. Treasury bond holdings, and income taxes on Social Security benefits paid by those with higher incomes

    The Report does project that benefits and administrative costs in 2012 will exceed the amount of one source of income--the payroll tax contributions collected. However, there are two other sources of income for SS which Mercer is not even considering. The current situation is not uncommon, having happened 25 times since 1957. If the Republicans would simply get out of the way of economic recovery, any continuing "deficit" would disappear.

  32. Jerry 2012.12.11

    Ida who? Idaho under Republican Butch Otter, just signed on with Obamacare. When Butch sees the light, in a state that is much redder than South Dakota, ole Denny may man up and get with the picture. Some reporter may have to ask our governor why he is being reckless with our taxpayer dollars.

  33. grudznick 2012.12.11

    You surely hate Republicans Mr. Pay.

  34. Stan Gibilisco 2012.12.11

    On a less sarcastic node, Obamacare is a boondoggle, a bandaid on a bullet wound. I favor Kucinichcare. Socialized medicine. Seriously. It would get rid of all the flim-flam and horsefeathers.

    And yeah, I guess it would make our taxes go up a fair bit ... and our medical insurance premiums go away altogether.

    Talk about a "net plus"!

  35. larry kurtz 2012.12.11

    Idaho may be the next swing state after a wildfire season for the books. Good eye, dudes.

  36. Bree S. 2012.12.11

    Yes, let us subject all of the United States to Reservation Health Care. That will fix things. Because what has never worked in the past will all of a sudden start working if we just give it one more chance.

  37. larry kurtz 2012.12.11

    Marine Corps health care for all!

  38. Jana 2012.12.11

    Bree, take a look at what universal health care works like in other industrialized nations and their outcomes and then get back to us.

    Although it does puzzle me that you don't believe in American exceptionalism and that we couldn't do universal health care better than any other country.

  39. Bree S. 2012.12.11

    Yes, how is that universal health care working out for Greece and Spain?

  40. Bree S. 2012.12.11

    Lol. Cute Jana with "I don't believe in American exceptionalism." I believe we have the best government structure in the world which has been proven to work consistently in the real world. Which tells me we can fix this mess of a health care system without resorting to mediocrity for all.

  41. Bree S. 2012.12.11

    Larry, you judge the Christian God for the crimes of man, as if that God was a different God than the Great Spirit, the one God followed by all the peoples of this land when the tribes were one. There is only one God for all the peoples, and none of them have all of the truth.

  42. larry kurtz 2012.12.11

    the christian god is just another murderer.

  43. Bill Dithmer 2012.12.11

    "Teachers don't go to any means possible to save a life or cure a problem or diagnose a condition."

    I was gone for a couple of hours. I had to set in front of the TV for a while NCIS. Imagine my surprise when I got back and saw the above statement put in a post. Its very seldom that you hear someone come right out and talk about the teaching profession, say something that stupid, and then sign their name to it.

    How the hell do teachers teach anyway BM? Do they just phone it in? Set in the teachers lounge and hope for the best?

    No its a lot tougher then that and you know it. We have way more good teachers then bad. Everyday they have to deal with problems that most of us would have no idea how to fix. Emotional children, emotional parents, bullies, sick kids, kids that bring their problems from home to school because, well they don't have anyplace else to go. A curriculum that tries to tell them what to teach even when they don't believe what they are being told to teach, Creation, evolution, sex education, well you get my drift. Or maybe you don't. I thought you were a smarter man then that.

    In most cases the teacher is the first to know what a problem is with a student. Mental health, physical disability like hearing, being visually impaired, stuttering, abuse, or maybe even a serious health issue. They not only save lives they build lives out of nothing into a person that can learn. They deal with problems that most of us would throw our hands up at.

    Read the above paragraph again.

    And lets look at their diagnostic abilities. Every child learns in a different way. Even the smart ones have to find the way to assimilate what they have read or been told, just think about how those that are little behind those smart ones and tell me how that teacher builds a student without having the ability to diagnose those conditions? How about "special ed"it takes a special kind to teach there.

    They say that for every hundred kids or so there is one that has autism. Lets add dyslexia to that and throw in ten or fifteen other learning disabilities and wow there you have teachers trying to both diagnose and treat and or fix something that might be beyond their education level. Remember they cant just send these kids home they have been given a responsibility to try to teach. The bad teachers might not. The good ones try everything they can to help. But the great ones find a way to help every single one of their students, and maybe some of the parents and fellow teachers in the process.

    I come from a family of teachers. My mom had her first teaching assignment in the hard years. She taught for room and board at a small country school north of Corn Creek and got handed an IOU for two years. She never collected any of those but she still taught.

    One of my sisters, Claudia Little was teacher of the year about ten years ago teaching in Spearfish. You don't get that by being a bad teacher. How much time did she put in? Only forty years.

    I couldn't teach myself, I'm just to damn dumb. That's ok I recognized that at a very early age. Now I have twin grandsons with learning disabilities and I sure as hell hope they get some of the help that they will need in a SD school. I'm beginning to have doubts about that because of the way people like you talk about our educators. How would you like it if someone said about you.Well old Bob was there but he really didn't do a damn thing worth mentioning.

    You made me mad Bob. Your condescending attitude about teachers was not only mean but just plain stupid. Well "stupid is as stupid does" or in your case says. Nuff Said

    I am more in aw of my high school English teacher Miss Cook right now then at any other time in my life.

    The Blindman

  44. Bree S. 2012.12.11

    God is God, Larry. Murder is done in the name of God all over the world. I would not judge you for the crimes of your children.

  45. Jana 2012.12.11

    Bree...you say "Which tells me we can fix this mess of a health care system without resorting to mediocrity for all."

    Are you talking about that super secret GOP health care plan? Do please tell.

    I also find it interesting that you think that it is the government that will fix it. We agree on something!

  46. Bill Dithmer 2012.12.11

    "Which tells me we can fix this mess of a health care system without resorting to mediocrity for all."

    We are talking about great health care for everyone Bree, not mediocre health care. Why should the average citizen have to settle for anything less.

    Now I'm going to give you a chance to fix what we have. Show me your ideas, show me some solutions, SHOW ME THE DAMN MONEY.

    The Blindman

  47. Bree S. 2012.12.11

    It's a problem in your own mind Jana that when I say "we" you think "government."

  48. Jana 2012.12.11

    I guess that whole "We the People" thing is about select individuals and not Americans coming together to form a government.

    Let's go back to your statement in whole and see if there is something that I missed.

    "I believe we have the best government structure in the world which has been proven to work consistently in the real world. Which tells me we can fix this mess of a health care system without resorting to mediocrity for all."

  49. Bree S. 2012.12.11

    Yes Jana. We have the best government structure in the world. A representative democracy. A Republic. And we can fix this mess of a health care system without resorting to mediocrity for all. Let's start with the thugs in the FDA and the AMA.

  50. Bree S. 2012.12.11

    Are you looking for contradictions in my statements? Lol.

  51. Jana 2012.12.11

    Oh gosh no Bree. You can do that all on your own;-')

  52. Bree S. 2012.12.11

    Well then let's put this supposed contradiction to rest. The government could be considered "we" by a very simplistic definition. However the government is "we" like a mad leopard is a cat - it's only one small segment of the whole. Remember the logic circles from school? Circle A is a small circle contained in large circle B. You get my drift. If I say "We are going to the garden to see the new lion" I don't mean "The goverment is going to the garden to see the new lion" of course.

  53. Bill Fleming 2012.12.12

    Jana, doh! What the heck were we thinking? Bree didn't mean we the people could fix health care. She meant she, her imaginary friend, and the new lion could fix it. No arguing with that logic, right? Wow. Mind like a steel trap on that woman.

  54. caheidelberger Post author | 2012.12.12

    Thank you, Bill D, for the fine defense of the important work we teachers do. As Bill F wisely points out, we do that work in a truly socialized system: the people own the means of of production (the schools, the books, the buses) and pay all of the workers (including me—thank you!). And with that universal socialized system, we provide quality service to every citizen more cheaply than the private sector could.

    The same would be true for health care. if we are interested in paying the bill for what we want, as Bob says is his main point, then we should switch to the Kucinichcare that Stan and I crave. As other countries and our own Medicare program demonstrate, a single-payer universal health care system, like our single-payer education system, would serve more people more efficiently, producing better coverage while using a lower percentage of our GDP than our current public-private mishmash system.

  55. Jerry 2012.12.12

    Et tu Nevada? Can it be that yet another Republican governor endorses Obamacare and will be getting the Medicaid for its citizens? Oh yeah baby, et tu Nevada. Sandoval is on board! Denny and the rest of the gang that can't shoot straight are still on the bottom with the carp.

  56. Bob Mercer 2012.12.13

    There was nothing condescending about teachers. The point was that healthcare can be and often is an open-ended pursuit of a cure while our public schools generally are operated in very limited ways including their funding.

  57. Bill Fleming 2012.12.13

    Bob, if you keep rummaging around long enough, you might come up with a valid reason why Americans shouldn't be concerned about one another's health care and be willing to contribute to the common health wellness, but you haven't hit on one yet, my friend.

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