News Story

'Voting Yes on Medicaid Expansion is Voting for Obamacare'

State Senate takes another turn on Medicaid expansion issue

A vote on legislation to expand Medicaid could take place today in the state Senate.

The Senate returns to session at noon today after its summer break and will be forced to address in some fashion the issue of Medicaid expansion in Michigan. At issue is whether Michigan will join states that are cooperating with the implementation of Obamacare or be among several states that are resisting the expansion of the social welfare health care program.

"Voting yes on Medicaid expansion is voting for Obamacare," said Jack McHugh, senior legislative analyst with Mackinac Center for Public Policy. "It's really as simple as that."

The expansion would place at least 300,000 able-bodied Michigan residents without children on Medicaid. Studies have shown that health outcomes resulting from such coverage are no better than having no third-party coverage at all.

Expanding Medicaid is an important step needed to put Obamacare in place. In the summer of 2012, when the U.S. Supreme Court ruled that Obamacare was constitutional, it also ruled that states have the right to refuse to expand Medicaid. Since then, Medicaid expansion has become a frontline issue for the states in the nationwide battle over Obamacare.

Gov. Rick Snyder and state Democrats want the expansion. In June, House Speaker Jase Bolger brought a Medicaid expansion bill up for a vote. Twenty-eight Republicans joined the Democrats and voted for the expansion, including many in leadership positions. The Senate refused to quickly act on the bill despite intense pressure from Gov. Snyder, instead moving the bill to a work group to study the issue over the summer.

If the Senate doesn't take a vote on the measure (House Bill 4714) today, it would simply mean that Gov. Snyder and the powerful groups that are lobbying for expansion have, thus far, failed to convince enough Republican Senators to support the bill. In reality, Oct. 1 is the Fiscal Year deadline and the issue likely will remain alive until either a bill passes or time runs out.

One way the bill could pass would be if Senate Majority Leader Randy Richardville, R- Monroe, is willing to do it with less than half of his GOP caucus voting "yes." In other words, he'd be turning to the Democrats to provide most of the votes. This has been a possibility all along, but so far Majority Leader Richardville has refused to resort to that method.

In addition to determining where Michigan will stand regarding Obamacare implementation, there also is the issue of the eventual cost to the state. The Obama administration is offering billions of up-front dollars to states that expand Medicaid. But, long term, many think the state would get stuck with even greater costs as it increasingly bears more responsibility for the program.

Sen. Patrick Colbeck, R-Canton, has been one of the state senators most ardently opposed to Medicaid expansion. He has offered an alternative plan.

"I'm looking forward to protecting future taxpayers by stopping this talk of expansion and focusing on alternatives that would truly help the poor in regard to health care," Sen. Colbeck said.

If the Senate passes the measure, the bill would go back to the House for concurrence.

There appears to be a general assumption that Speaker Bolger would turn again to Democrats and some Republicans on a concurrence vote for a Senate-passed version of Medicaid expansion. It is unclear, however, if he'd get the same number of votes.

Gov. Snyder's office did not respond to a request for comment.  

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.

Commentary

National Commentary Wrong About Detroit's Failure

Mismanagement, not lack of money, is to blame

Economist Joseph Stiglitz, writing in the New York Times Opinionator blog, argues that Detroit has fallen due to economic losses and that bondholders should accept most of the losses in the city's bankruptcy. He's wrong on both counts.

Detroit has suffered through decades of bad public policy and filed for bankruptcy after serious and acute mismanagement. The city is unable to provide the quality basic services that every other municipality in Michigan has been able to offer. The city has been unable to manage its books, balance its budget, and adequately manage its contracts either with unions or its private vendors.

Its delay in fixing these problems meant borrowing to pay for current expenses without an adequate plan to pay down that debt. This includes the city's general obligation bonds, its borrowing to make pension contributions, and the city's underfunding of its pension plans.

The amortization payments on unfunded pension liabilities requires the same cash that can be used for operating expenses or bond payments. The city has to pay down this debt like the rest. That's why Detroit Emergency Manager Kevyn Orr's original proposal puts unfunded liabilities through the same process as the rest of the city's unsecured debt.

The proposal may be tweaked as a bankruptcy judge hears arguments and mediation proceeds, but holding harmless the holders of a substantial portion of the city's debt is irresponsible when debt payments are expected to exceed 60 percent of the city's operating revenues within five years. Even with the substantial restructuring going on in the city, it will be unable to make the payments on city debt.

This problem does not require more revenue. The city already receives more state money than every other municipality and the city has special revenue sources — like its casino taxes — that no other government receives in Michigan.

The substantial economic problems in Detroit certainly are a problem, but it's not the primary one. Plenty of other cities are in a tough spot but manage to pay their expenses. Nor is it the region's fault that Detroit's leadership has been incapable and corrupt.

National commenters like Stiglitz need to take a closer look at the city's financial problems before telling a broader story.

There are many problems facing Detroit, and city policy has been a hindrance to growth, but the one most responsible for the city's bankruptcy filing is mismanagement. 

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.