To The Daily Sun,
The media assumption is that states refusing to expand Medicaid are doing so for purely political reasons. Progressives indulge in name calling against all who oppose Medicaid expansion, calling them fiscally foolhardy and heartless. They argue for Medicaid expansion claiming both it means economic benefits and disproportionate federal funding for state residents without raising taxes ... which sounds great ... but are the claims true?
Researching the matter shows the progressive explanations do not hold water. The evidence indicates expansion states are eager to spend not only their own residents' money but money from other states' taxpayers as well. States that expanded Medicaid tend to have per capita state spending about 17 percent higher than non-expansion states. Common sense should tell us; everyone can't get more money back from the District of Columbia than we send there.
What we have is another situation like the state retirement system ... and we are still trying to dig out from under that mess. It has made New Hampshire's retirement system a comparison in discussions about Detroit ... all in the name of expecting something for nothing. It seems the Legislature and the governor learned nothing from that gaff. Spending money based on optimistic prognostications and then recovering later hamstrings the economy, limits the states options and raises taxes.
The Kaiser Family Foundation released a report in September comparing Medicaid expansion states with those that did not expand. The report was largely unreported locally ... but it t should have created a stir. The report illustrates why many states turned down free federal Medicaid funds. Reduced federal funding over time and expanded enrollment tell us that the results were foreseeable.
The non-expansion states have a higher degree of economic freedom than expansion states. States declining to expand Medicaid tend to be fiscally conservative, with lower taxes and lower spending. In 2004, expansion states had median per capita state and local tax collections of 19 percent more than non-expansion states. By 2012, this gap had widened with expansion states collecting 28 percent more taxes per capita than non-expansion states. Since 2008, expansion states have increased taxes, while non-expansion states have reduced taxes slightly.
The Kaiser report also looked at "taxing capacity," which basically measures whether states are taxing their citizens as much as is possible. It's a function of both income and tax rates. In 2004 expansion states and non-expansion states were taxing at nearly equal levels when comparing their so-called taxing capacity. By 2012, expansion states boosted collections as a percent of taxing capacity by 17 percent compared to non-expansion states.
States that expanded Medicaid tend to be slightly richer, on average, than non-expansion states. But the gap is narrowing, due to state fiscal policies which run counter to economic growth. In 2001 expansion states had real median incomes that were nearly 13 percent higher than non-expansion states. By 2013 this gap narrowed to just over 9 percent. Historically, expansion states had slightly lower poverty rates, but this gap also narrowed to 1 percent by 2012.
Non-expansion states, although slightly poorer, have lower unemployment than expansion states. That should not come as a surprise. It's the result of greater economic freedom. Expansion states tend to have more workers in the health care sector; about 30 percent more. This was true long before the ACA. Annual health care employment growth in both expansion and non-expansion states was about the same from 2008 to 2013. Historically, from 2000 to 2013, health sector employment growth was actually higher in non-expansion states.
Expansion states were historically richer, but that is changing due to their lack of fiscal responsibility. They have less economic freedom, tax their residents more and spend more of their taxpayers' money. The moral of the story is when we vote ourselves more goodies from the public coffer ... taxes go up, freedom goes down and people and companies move away.
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