Franz Statement on Medicaid Expansion

Franz Statement on Medicaid Expansion

By JGillman, Section News
Posted on Wed Jun 12, 2013 at 02:46:43 PM EST
Tags: Michigan, Medicaid Expansion, HB4714, Ray Franz, Conservative (all tags)

Representative Ray Franz (Genuine R-101) issued a statement on Medicaid expansion:

I apologize in advance for the length of this piece, but this is a big and complex issue.  I find it somewhat amusing that some of the people who were worried that I would vote in lockstep with the Governor, now want me to rubberstamp his Medicaid Expansion plan.  

I cannot and here's why:

First, this subsidized health coverage (benefit) is going to include a very large portion of our population - some say as many as 600,000.  I believe it may be more.  The benefit will go to those over 133% of the Federal Poverty Line.  But that is based on adjusted gross income which takes 5% off the bottom and adjusts.  So the 133% could be 140% of actual earnings - or more.  When you consider that ObamaCare is forcing many in the service and retail industry to cut employee hours to under 29 - this has the potential of including far more than 600,000 people.

Next, I don't think for one moment that once this large population is on a "benefit" that there will ever be the political will or ability to take them off.  Heck, we cannot even muster the will to fix a broken "no-fault" system after the parade of wheelchairs.

This bill gives the first six months free - then starts to charge individuals.  That's going to be a surprise that won't go over very well. 

To think that we can impose a 48 month limit, or reduce benefits at a later time because a waiver is not granted is fool-hardy. I can envision a waiver to start - than the waiver rescinded - and us stuck with pulling the benefit - it's just not going to happen.

What happens to our health care system with the influx of 600,000+ new covered individuals?  It can only be overwhelmed.  One of the worries we currently have is uncompensated care at hospitals and cost shifts. However, this will shift costs to doctors who are already seeing reimbursement for Medicare and Medicaid at 47% of billables.  What happens when we put this huge new demand on a depleting resource?  The medical community will be stretched and stressed beyond its limits.  You will see fewer doctors willing to work for ever less and the quality of services to individuals will decline.  The hospital cost shift will be spread thinner and wider - but not lessened.  Quite the contrary - it will worsen.

Let's also look at the unintentional consequences to peoples' lives as a result of this new benefit.  We see it in unemployment, current Medicaid and food stamps.  When people get to the point of losing this benefit due to their earnings; they will back away so as not to hurt their eligibility.  This new "benefit" also will put a ceiling on peoples' upward mobility and prosperity.

When someone's earnings rise to 131% or 132% of FPL - they will ask themselves - "is it worth crossing that line and losing the subsidy?"  Is the overtime worth losing my affordable insurance? Inevitably that answer would be no - this destroying the will and ability to improve one's lice.  On top of that, this would also negatively impact businesses large and small.  It stifles productivity and limits the availability of employees and thus limits their ability to adjust schedules and hours.

Next, I would like to address the costs to the State.  While the bill states that it will stop benefits if the Fed's don't pay 100%, as stated before, I don't believe for a moment that the benefit could be stopped and I don't believe for a moment that the Feds will pay 100% forever.

There simply isn't the money for it.  If, as the Feds previously stated, they will fund three years and then reduce to 90% (or less) - the cost to the State, according to the Keiser Foundation and Heritage Foundation reports, will skyrocket.  In six or seven years, they report our share will rise to $300 - $400 Million.  Given the history of health care estimates, (LBJ said Medicaid would never exceed $5 Billion, the Federal Office of Management and Budget says ObamaCare costs have already doubled) - I believe it will cost our State more than half a Billion dollars a year.  Where is that revenue going to come from -   schools, roads or new taxes? While it would be an easy vote and be a very politically advantageous position, I will not leave that bill to my successors in this seat or to future generations.

Some say that we should respond with an alternative - a "better", "lighter", "more effective and efficient" way.  I respectfully disagree.  Sometimes we must say "no".  Advancing a bad idea only "better" or "less" is still advancing a bad idea - and bad public policy.  There are alternatives in a true free market that I have espoused for nearly six years, but it is obvious that the time is not right for that.

In closing, let me summarize.  This legislation will hurt and entrap people over the long haul; hurt our doctors and health system; cost millions and billions we don't have; and leave future generations with bills and responsibilities that will be difficult if not impossible to handle.

HB 4714 offers short term gains for, what I believe, are long term pains of the highest order.  Fool's Gold - if you will.

Thank you for remaining strong and looking at the big picture representative Franz.

RightMichigan.com || Franz Statement on Medicaid Expansion