Author’s Note: This is the seventh in a series of articles about Nebraska’s Medicaid program, the Unicameral’s apparent intent to expand it, and the many reasons why expansion is an uncommonly bad idea. Although they don’t have to be read in order, here are links to the previously-published articles in the series – see the bottom for a complete, updated list:
- NE Medicaid Expansion: The Race is On
- Let’s See What Condition Our Condition is In
- People Don’t Walk Away From a Fool and His Money
- Sending Granny (and Gramps) to the Home
- Congratulations! She’s Having His Baby . . . And You’re Paying for It!
- Families Need Medicaid Like Fish Need Bicycles
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- Wanna know why our annual federal budget deficit is in excess of $1 trillion and federal debt is measured in the teens of trillions?
- Wanna know why at least 40 percent of the money that’s spent for “government” here in Nebraska is, in actuality, paid for with federal tax dollars?1 The linked information at nebraskaspending.gov indicates the proportion of federal to state dollars for the fiscal year ending in June, 2012, was ...continue
- Wanna know why, even with all of those federal dollars, our state senators still have trouble balancing the state budget?
All those questions can be answered in two words: Bob Krist. Yeah, it’s all his fault.
Obviously, I’m kidding. But only just. Consider how Senator Krist, one of those fiscally-conservative Republicans we keep electing to the state legislature, tried to justify his support for LB577, the bill he co-sponsored to expand Nebraska’s Medicaid program. While reasonable people question whether we can afford to expand Medicaid, Krist says the question is exactly the opposite:
“[W]hether the state can afford to leave all those federal tax dollars on the table. ‘The answer is no. I think we have to participate, to play the game from the very beginning and adjust as we go with the best information possible,’ he said.”
Krist’s very own entitlement mentality is showing. One of the foundational elements of that state of mind is the earnest belief in the existence of a “free” lunch.
You see, the federal government has promised to pay 100 percent of the initial cost incurred in expanding Medicaid within any state opting for the voluntary expansion, with that commitment dropping down to 90 percent after three years and then continuing at that 90 percent level forevermore. Senator Krist and a number of his colleagues in the Unicameral are laboring under the mistaken impression that this means the Medicaid expansion is “free” to Nebraskans. “Found” money, if you will, that Krist, at least, thinks we cannot afford to leave on the table. One wonders if the senator still believes in Santa Claus and the Tooth Fairy as well.
Henry Hazlitt once said, “Everything we get, outside of the free gifts of nature, must in some way be paid for.” In common parlance, that means “there ain’t no such thing as a free lunch,” a statement inspired by the practice in 19th century saloons of permitting patrons to eat their fill for “free” once they purchased at least one drink, knowing that customers would seldom, if ever, stop at just one. Saloon owners are rumored to have liberally salted the “free” food as well, just to ensure patrons became and remained thirsty.
At its heart, the observation that lunch is never free is based on a fundamental principle of economics. In order to get one thing we like, we have to give up another thing we like. A choice must be made. One individual or group CAN get something at no cost to themselves, but only so long as somebody else pays for it.
A question for Senator Krist and his buddies at the Unicameral: Where does the federal government get its money?
Answer: Mostly from taxes paid by individuals. You know, people who live and work in the U.S.A., the country of which NEBRASKA is a part.
That means that, if our elected representatives vote to expand Nebraska’s Medicaid program, the federal government promises to take money from NEBRASKANS in the form of taxes AND THEN SEND IT BACK TO US TO PAY FOR THE MEDICAID EXPANSION!!!! What a simply fabulous deal!
I’ve got news for you guys down there at the Unicam — THIS MONEY IS NOT FREE. THE HEALTH CARE IT WILL PAY FOR WILL NOT BE FREE.
In a typical year, Nebraska receives more in federal tax dollars than Nebraskans pay in federal taxes, but to date it’s usually been a near thing. Not so if Senator Krist and his cronies push LB577 through. They apparently think we’re not sponging off of our fellow American citizens enough. Why else would they find those federal tax dollars laying there on the table so very tempting?
Look at our federal deficits and our total debt, for cripes sake! Should it be our goal, as a state, to do everything humanly possible to suck up even more federal dollars than we already do? Are we “entitled” to do that? To take money that’s collected from people living in each of the other 49 states to pay for things we want to have and to do here in Nebraska? If so, why was everyone so incensed at U.S. Senator Ben Nelson when he and Harry Reid cooked up the “Cornhusker Kickback”?
It’s ironic that the progressives among us, including Senator Krist and the 11 co-sponsors of LB577, would elevate the perceived needs/interests of the individual State of Nebraska above the fiscal and financial solvency of the collective — our federal union. But I shouldn’t be surprised. To them, there is apparently no connection between what they vote to spend here in Nebraska and the annual deficits and accumulated debt we, as a nation, incur.
Nebraska already gets at least 40 percent of the money it spends within the state each year from the federal government, and that doesn’t include any federal funds used to support the University of Nebraska system. Still, our state senators have trouble balancing the state budget, as they are required to do by law.
There seems to be nothing our state senators think we, as Nebraskans and as a nation, cannot afford. It’s that mentality, multiplied by 50 for each one of the 50 states, that has gotten us in the dire straits we, as a nation, currently occupy. LB577 is a step that, if taken, will only dig us deeper into deficits and debt. The key to getting out of any hole? STOP DIGGING.
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This article series is about Nebraska’s Medicaid program, legislation introduced in the Unicameral aimed at expanding it, and the many reasons why expansion is an uncommonly bad idea.
This first grouping of articles don’t necessarily have to be read in order as they are research, principle, and policy focused:
- NE Medicaid Expansion: The Race is On
- Let’s See What Condition Our Condition is In
- People Don’t Walk Away From a Fool and His Money
- Sending Granny (and Gramps) to the Home
- Congratulations! She’s Having His Baby . . . And You’re Paying for It!
- Families Need Medicaid Like Fish Need Bicycles
- This article
- Projections re Cost of Medicaid Expansion: Too Good to Be True
- LB577: Nebraska’s Unaffordable Care Act
- Pelosian Economics: Medicaid Expansion as Fiscal Stimulus
This next grouping of articles report events affecting the progress of legislation in the Unicameral, listed in the order in which they were published:
- Unicameral’s Health Committee to Hear Medicaid Expansion Bill (LB577) Feb. 28th
- It’s Funny? Even If Medicaid Expansion Saved Money, Citizens Wouldn’t See a Penny
- Nebraska Medicaid Expansion: LB577 in Limbo
- Senator Bob Krist Withdraws As Co-Introducer of Medicaid Expansion Bill (LB577)
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Images in the post were found at the following links…
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Notes & References
| 1. | ↑ | The linked information at nebraskaspending.gov indicates the proportion of federal to state dollars for the fiscal year ending in June, 2012, was 35/65. However, this specifically excludes federal spending in connection with the University of Nebraska and the state college system, just to name two. Including these federal dollars would, in all probability, push the ratio closer to 50/50 or more. I chose to compromise, saying “at least 40 percent,” to acknowledge the exclusion of certain funds from the calculation and to recognize that the percent of federal dollars tends to vary, regularly being in the 40 percent range since we here at GiN became aware of this website two or three fiscal years ago. |
You are right the money is not “free” we have already sent it Washington. It is Nebraskan’s money they are offering back to us. We have to choices we can spend it here or we can send it back to Washington. I think we already send too much to Washington. So if they want to send it back that is fine. For every dollar we leave on the table in Washington Nebraskans have to pay for in some way. It will cost the average Nebraskan about $150 per year to leave the money in Washington. We have already paid it in if they want to give it back we should take it. Washington will just send it elsewhere so why screw our own people. Healthcare is an industry so the money spent will improve Nebraska’s economy and provide a needed economic boost.
Tom:
Thanks for posting your comment. The point you raise is not unique, but it is fallacious in more than one way.
First of all, this is NOT money Nebraskans have already sent Washington’s way. Medicaid expansion is just that — E-X-P-A-N-S-I-O-N. The program currently covers certain children and their parent(s), the disabled, and the elderly, all of whom make less than a certain income level. Expanded Medicaid is an entirely new entitlement program that covers anyone between the ages of 18 and 65 who makes less than the specified income. If we, as a state, choose not to cover those additional people, the money stays here. No federal taxes will be spent for matching funds in Nebraska and no state tax money will be collected and spent to pay for the rest.
And it’s a canard to say that Washington will send Nebraska’s money to other states if Nebraska chooses not to expand Medicaid. If Nebraska does not spend Medicaid expansion monies, those funds are NOT transferred to other states. Under the legislation, the mandate in other states continues to be 138 percent of the federal poverty level, regardless of what Nebraska does. The FMAP (federal medical assistance percentage) in other states does NOT adjust according to how many states do or do not participate in the Medicaid expansion.
As a further point about the money, if we expand Medicaid, given the annual deficits and overall federal debt we’re racking up, the money to pay for the expansion will not be our own. It’s money that our children and grandchildren will have to pay. If you’re a fan of vintage cartoons, you might recall Wimpy from the old Popeye show. Wimpy’s stock line was, “I’ll gladly pay you Tuesday for a hamburger today.” Because Wimpy made this request in every episode of the show. sometimes repeating it to every other character he encountered, the implicit punchline was that, for Wimpy, Tuesday never came. If we expand Nebraska’s Medicaid Program, we’re essentially all Wimpys now, except we’re saying, “We’ll gladly leave our children and grandchildren to pay for the healthcare we want to give away free to others today.”
If you think expanding an entitlement program will create an economic boom in Nebraska, you haven’t been paying attention. Read a subsequent article in the series re Pelosian Economics for my full response.
Linda