Why States are Reluctant on National Health Care Reform

By Dennis G. Smith

The U.S. Supreme Court’s recent decision on the Patient Protection and Affordable Care Act (PPACA) guarantees the debate over health care will continue. Supporters of the PPACA want to convince the public that everything is settled and any opposition is just politics. But opponents are not out to score political points. We believe now, as we did two years ago, that the economic assumptions used in the debate are flawed and the policies are wrong for the nation.

Since the court’s decision, the law’s supporters insist that Obama policies are successful because the cost of health care is declining. But that is not the case. Americans know that cost and spending are not the same thing. If the cost of a car is too high, a family won’t buy one, which means their spending is lower. Health care spending has slowed, but for the wrong reason – the lingering recession. Demand is lower because fewer people now have health insurance than when the president’s term of office began. In 2008, 42.7 million individuals were uninsured, according to the Centers for Medicare and Medicaid Services (CMS). The CMS estimates there will be 48.6 million people without insurance in 2013. It is hard to see how this could be considered an accomplishment.

Even the government’s own actuaries say that the slowdown in health spending now and into the future is unrelated to the PPACA. The PPACA hides and shifts costs; it does not lower them. Most Americans already believe we are spending too much, not too little, on health care and that is what this debate should be focusing on once again. True health care reform must tackle the root causes of our health care costs and put individuals at the center of decision-making.

Those who support expanding Medicaid insist that a state cannot pass up “free” federal money or that if we don’t expand, the money will go to another state. This is the kind of thinking that got us into the deficit and debt troubles we are in. First, there is no such thing as “free” federal money. The federal government has no money of its own and it gets the money it spends from the same people the state government does. Regardless of who the tax collector is, the impact on the taxpayer is the same. Second, each state gets its share of federal Medicaid funding regardless of what happens in another state. Finally, hospitals, doctors and other health care professionals would receive higher payments under the new tax credits that will be used to purchase private insurance rather than under Medicaid.

The Court’s decision reveals that the PPACA is an enormous and regressive tax. The result may well be that lower income individuals pay the tax but won’t qualify for either the law’s new tax credits or for Medicaid. Some groups will press states to fix this inequity, but that burden rests with the authors of the law, who deliberately chose a Medicaid expansion because it would be cheaper for the federal government.

The PPACA took a layer-cake approach to health care and stratified Americans according to income levels. But Americans should not be required to live their lives according to poorly designed federal government programs and rules. The best way to expand health insurance coverage is to get the economy moving again and Americans back to work.

The PPACA was flawed from the start. The American people rightfully expect a new beginning to the health care debate.


This commentary by Dennis G. Smith, Wisconsin’s secretary of health services, was first published by Wispolitics.com and is reprinted by the Georgia Public Policy Foundation. The Foundation is an independent think tank that proposes practical, market-oriented approaches to public policy to improve the lives of Georgians. Nothing written here is to be construed as necessarily reflecting the views of the Foundation or as an attempt to aid or hinder the passage of any bill before the U.S. Congress or the Georgia Legislature.

© Georgia Public Policy Foundation (July 20, 2012). Permission to reprint in whole or in part is hereby granted, provided the author and his affiliations are cited.


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