Belmont Club

Smile and Waive

In politics it is not “the love of money” that is the root of all evil.  Rather it is the  lack of money that is the cause of all frustration.  The world would be so much easier if reality didn’t keep getting in the way. The LA Times notes that 21 states are looking to to scale back the mandates of Obamacare because they haven’t got the dough to carry it out.  By handing out hundreds of waivers to private companies, including unions and health care organizations, it appears that the administration agrees. The New York Times writes:

Last month, federal officials granted dozens of one-year waivers that were aimed at sparing certain employers, including McDonald’s, insurers and unions who offer plans that sharply limit the coverage they provide. … Concerned about the potential disruption that would be created by enforcing the new rules, the administration has granted dozens of additional waivers and also made clear that it would modify other rules affecting these policies. Last week, the Department of Health and Human Services issued more guidance, saying it would use a different method of calculating spending for these plans so they would be able to meet new regulations dictating how insurers should use the premium dollars they collect.

The actual number is over a hundred, not dozens. HotAir notes that some of those granted waivers were nonprofit agencies who were studying healthcare reform.  In considering the ends, the means are never irrelevant. Omar Bradley once observed that “amateurs talk strategy but professionals talk logistics.” In politics the equivalent saying is never to let your mouth write a check that your ass can’t cash. The problem facing the Obamacare is simple. There’s not enough money around to implement it as designed. The lack of money and the fact that the Federal Government has charged the Several States with implementing Obamacare means that it will be carried out spottily even if there were no political opposition. As NPR notes, Obamacare was also premised on the idea that somebody else would do it.  “For all the rhetoric about this being a federal takeover of the health care system. States actually have an enormous role to play in implementing the law.”

Everything from creating and operating these new marketplaces called insurance exchanges, where people will buy insurance, to enrolling low income people in Medicaid, to policing insurance premium rates, how fast they go up. Now, if the states choose not to do any of those things, the federal government will do them instead. But the anticipation going in with this law is that states would step up and work in partnership with the federal government.

All this costs money. Unfortunately some states are as bankrupt as the Federal Government, and based on their experience with Medicaid, not every state believes that Federal funds will make up the difference. “Medicaid, which is this health program for the poor, the federal government pays just over half of Medicaid costs in every state, and in the poorer states it actually pays vast majority of costs, as much as 80 percent. But states say the money comes with so many strings attached that they can’t afford their share, even the states that only pay 20 percent of every dollar.”  In view of the empty pockets, some states are just going to need a waiver like the unions. NPR’s Simon Scott asked Julie Rovner, “so what happens then, Julie, if, say, half the states implement the law aggressively and half choose not to?” Rovner answered, “I think that was always going to be the case.” She explained that states would respond according to the abundance of their means and the enlightenment of their political culture. However, the Federal Government would be there at any rate to step in.

Yes, there are now several more states that have Republican governors and may come at this law with a little bit of a more jaundiced eye. But even before that we had a relatively even split. And I think states were always going to look at this differently, depending on their populations, on their political cultures, on what they already had going on in their states. So I think states are going to learn from some states’ successes and others’ failures. Again, states that don’t do anything, there is a federal backup. The federal government will come in if states don’t do anything. But I think as with everything else with this law, it’s a matter of watching and waiting.

Rovner never addresses the issue of where the Federal government is going to get the money to “come in if the states don’t do anything”. The Federal Government itself exists on debt and will in a few short years be paying creditors as much in interest payments as the entire defense budget.  The love of money may not be sin in Washington, but the lack of money is. Well it can always give itself a waiver.

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