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  • Another Federal Bailout?

    First Bear Stearns, then Fannie and Freddie … and now the Commonwealth of Massachusetts?

    Last week Massachusetts received another short-term extension of its Medicaid waiver—which in part funds the state’s health care reform — until next Monday (July 28th) because the terms and conditions of its renewal are still pending. State and federal officials have mostly been silent on the details of their talks but there is no apparent sign that negotiations will come to an end by the next deadline.

    In a recent memo I authored with my colleague Ed Haislmaier, we explained that the last renewal of this long-standing waiver in 2005 was the catalyst for Massachusetts adopting a package of major health reform measures in 2006. One key element was an agreement between state and federal officials that Massachusetts would begin redirecting federal Medicaid funds away from “safety net” institutions and to individuals instead.

    The basic idea was that instead of giving heath care providers various “supplemental” Medicaid payments to subsidize them for treating the uninsured, the state would instead use those same dollars to — drum roll, please — subsidize buying health insurance for low-income uninsured adults.

    Since this was a way to get insurance coverage to more of the uninsured without having to increase government spending in the process, the proposal also attracted — another drum roll, please — broad, bipartisan support.

    As we explained, this shift in health care financing can work so long as state and federal officials stick to the agreements they made in 2005.

    However, at least one Massachusetts politician thinks that the state ought to forget its end of the bargain and just keep subsidizing hospitals directly. In fact some institutions are getting paid not once, but twice. In addition to getting paid for covering the uninsured through their own managed care plans they also continue to gets special supplemental payments for — well, actually it’s not clear what they are getting those extra payments for.

    What is clear is that “Get a federal bailout,” is not the correct answer to the question, “How does a state government fix a budget problem it created by double paying some of its health care providers?”

    Posted in Economics [slideshow_deploy]

    3 Responses to Another Federal Bailout?

    1. Jeff, West Bloomfiel says:

      I was just witnessing congressional spending at its finest when it bailed out Fannie Mae and Freddie Mac as well as all those folks who were dumb enough to get in over their heads on mortgages when I realized what was happening. We are now losing our ability to hold ourselves individually accountable for our actions. Collateral damage is the ability to hold others accountable as well. Individual bankruptcy, stomach staples, misbehaved children at restaurants, public profanity, credit card debt and other excesses that are largely caused by the lack of individual self control are entry points for collective controls over everyone’s’ lives.

      Those of use who are responsible are left exposed to unnecessary controls, laws, and limits on our freedom.

      Now on to the collateral damage – we can no longer hold companies (unless you are an oil company), government, or groups accountable for their terrible lack of control either. When are we going to hold the US Congress and members of either party responsible for ANYTHING? Last I checked they made the laws that allowed the current banking and real estate crisis possible (besides the dumb individuals). They are also the same group who thinks that those of us who have behaved responsibly should be taxed on some of our hard earned 401K savings – no kidding. How about the companies who thought sourcing everything to China was a great idea for costs, now we have lost numerous jobs – where is the outcry about China’s human rights violations. Lastly, where is the press? Where is the in depth analysis of the cost of oil and the real reason for the supply side issues, or the pollution caused by third world countries. I see so much written negative about the United States it amazes me how we gloss over far more significant violators on this planet and give them a free pass. Did you know that China is shutting down factories up wind of Beijing prior to the Olympics so it does not appear too polluted?

      When are we as Americans going to say enough and hold individuals and the groups to which they belong accountable?

    2. Pingback: Hub Politics » Health Care Mismanagement in Massachusetts

    3. Pingback: Black & Right

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