Commentary

Medicaid Now a 'Reform-Proof' Entitlement

Imposing 'healthy behavior' conditions on Social Security next?

Dr. Megan Edison has raised an interesting point about a “healthy behavior” provision in the Obamacare Medicaid expansion bill that was passed by the Michigan House and considered by the Senate.

Under the bill, enrollees would pay more unless they “demonstrate improved health outcomes or maintain healthy behaviors as identified in a risk assessment by their primary care practitioner.” Dr. Edison characterizes as “creepy” the requirement that doctors must track and report to the state whether their patients have met that standard.

The provision also shows how Republicans mistakenly framed the expansion in the same conceptual terms as post-1996 welfare reform. This is erroneous because Obamacare is not intended to be a welfare program in the same way as Temporary Assistance to Needy Families, to use the current bureaucratic term for what regular people call being “on welfare.” It's an entitlement, just like Medicare and Social Security.

In contrast, since 1996, cash welfare benefits no longer are an entitlement. Instead, they are conditional on recipients jumping through various hoops dictated by the state, including work and job-training requirements, with a four-year cap on how long someone can collect.

The public implicitly understands the conceptual difference between "welfare" and "entitlement." The 1996 welfare reform was all about separating these, and most people have no problem with requiring welfare beneficiaries to jump through those hoops.

In the public mind, Medicaid falls somewhere between. As a practical matter it’s more like an entitlement, because in the end, Americans will not accept a system that requires them to step over the ailing bodies of individuals who could be cured if only they could afford treatment. Still, the public has generally been willing to impose some conditions on Medicaid beneficiaries.

Here’s how this is relevant to Obamacare-driven expansion of the program by the Michigan Legislature: Because Medicaid is now a critical component of a new entitlement, the conceptual framework for it has changed, especially for the above-poverty population covered by the expansion. Medicaid has been transformed into the lower rungs of the Obamacare entitlement ladder.

To grasp the significance, imagine the uproar if Republicans in the Michigan Legislature tried to impose healthy behavior conditions on middle class Social Security and Medicare recipients.

If Obamacare survives, then all the above has huge (and corrupting) implications for Americans’ relationship with their own government.

In the short term, it means efforts by Michigan legislators to extract federal permission for substantive Medicaid "reforms" as a condition for accepting Obamacare’s expansion of the program are based on an obsolete conceptual framework. As such, they are likely to go nowhere in Washington.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.

News Story

Government Report Shows Film Jobs Stagnant Despite Incentives

State has pledged approximately $400 million from taxpayers for little return

In 2009, a year after signing the nation's most lucrative film incentive program, then Gov. Jennifer Granholm touted the jobs it would create.

"We are working hard to build a diversified economy and create good-paying jobs in Michigan," Gov. Granholm said. "As a result of our aggressive film incentives we are not only bringing new investment to Michigan, we are laying the foundation for an industry that will support long-term job growth for our citizens."

However, a Bureau of Labor Statistics report shows that has not happened in one key aspect of the film industry — post production work. In the three years since Gov. Granholm signed the bill that allowed the state to offer up to 42 percent reimbursement on money spent by movie producers in Michigan, seven post production jobs have been added.

There were 290 jobs in "post production and other related industries" in 2004. However, that number dropped to 153 jobs in 2008 and then increased to 160 jobs in 2011, the most recent year data is available.

Michelle Begnoche, a spokeswoman for the Michigan Film Office, said in an email that the economic crisis hit the entire country and affected jobs across a broad range of sectors.

Begnoche countered by saying that post production jobs increased from 144 in 2009 to 148 in 2010 and 160 in 2011.

"That upward trend reinforces our decision to put a priority on attracting digital media and post production projects that will support and grow these types of jobs here in Michigan," Begnoche said.

Numbers from the state on overall film jobs also show stagnation, with the overall number of jobs floating between 5,500 and 7,000 in the years before and after the subsidy program began. Michigan taxpayers are on the hook for about $400 million in direct incentives.

Some of that money has gone to support projects that didn't survive in the state. The Weinstein Co., for example, was paid $1.8 million in film subsidies when it paid $4.5 million to Speedshape to do post production work on Spy Kids 4 in 2011. After Speedshape, which had its Michigan headquarters in Bingham Farms, was paid, Speedshape broke its lease from its leasing agent and left without paying $20,296 in property taxes. 

The Republican controlled state House and Senate recently teamed up with the Democratic caucus to approve $50 million for film subsidies in the upcoming budget.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.