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A patient displays his place numbers for treatment after entering the Remote Area Medical (RAM) clinic in Wise, Virginia July 20, 2012.  RAM clinics bring free medical, dental and vision care to uninsured and under-insured people across the country and abroad. The Wise clinic was the 647th RAM expedition since 1985 and drew 1700 patients from 14 states, organizers said.  Picture taken July 20, 2012.   REUTERS/Mark Makela   (UNITED STATES - Tags: HEALTH SOCIETY) - RTR359FO
How the uninsured got care. A patient displays his place numbers for treatment after entering the Remote Area Medical (RAM) clinic in Wise, Virginia.

Leading health economist Uwe Reinhardt is baffled as to why Republican governors would turn down potential billions by refusing Medicaid expansion. He uses a helpful analogy to show just how irrational an economic decision refusal is.
Imagine being the shareholder of a publicly traded biotech company whose management and board were considering the economic merits of a truly awesome project involving a new drug.

Unlike most pharmaceutical and biotech products, which require billions of investment up front before revenues come rolling in, this peculiar product would require the firm only to put up monthly production costs of 10 cents for every dollar of revenue that will come in the same month. This is because the drug has already been developed by someone else, and this firm bought the patent on it some years ago.

The drug has been found to be so effective that its approval by the Food and Drug Administration is virtually a sure thing. Furthermore, there will be a solid market for the product as far as the eye can see.

Imagine being the shareholder of a company that has a CEO refusing to participate in development of that drug just because he doesn't like the original developer of the drug. That's exactly the position of the citizens and the healthcare providers in states where Republican governors and legislatures are refusing Medicaid expansion. It's in fact worse, because all those residents are paying federal taxes that are providing the expansion to other states, while missing out on both the benefit of a healthier population and billions and billions in economic benefits.

It's utterly irrational. It's also despicable. Reinhardt predicts that most powerful stakeholders—doctors and hospitals and their lobbies—"will ultimately prevail and get the deal done." Possibly, but it's going to take a political revolution in some of these states.

Originally posted to Joan McCarter on Tue Aug 12, 2014 at 10:54 AM PDT.

Also republished by Daily Kos.

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Comment Preferences

  •  Tip Jar (27+ / 0-)

    "The NSA’s capability at any time could be turned around on the American people, and no American would have any privacy left, such is the capability to monitor everything. [...] There would be no place to hide."--Frank Church

    by Joan McCarter on Tue Aug 12, 2014 at 10:54:54 AM PDT

  •  If ACA had been nicknamed Reagancare instead, (11+ / 0-)

    those idiot holdout states would be falling all over themselves rushing to sign up.

    We are all made of star stuff, so please be kind to dust bunnies.

    by jwinIL14 on Tue Aug 12, 2014 at 11:03:51 AM PDT

  •  That is not a good analogy (5+ / 0-)

    Measured in real terms, the price of a drug will decline over time, especially once the patent expires.  The argument made by governors such as Rick Perry in Texas is that the state will have to pick up a larger portion of the cost of Medicaid in the future, and that the cost of medical care in general will increase over time. Therefore, the argument goes, while Medicaid expansion seems like a good deal today, it will prove to be burdensome in the future.

    In other words, Medicaid would be like a drug whose manufacturing cost will increase substantially in the future, regarding which the biotech firm will have to pay a larger portion.  Since no such drug has ever existed or ever will, the analogy is a flop.

    •  Well, you also expand the Medicaid population (2+ / 0-)

      Once you do so, it is nearly impossible to shrink that population.  You are basically creating another permanent dependent class, or so the argument goes.

      It is not an argument without merit.

      By raising the minimum income for Medicaid enrollment, you have erected a barrier for people at the upper edge to ever move into a higher income category.  A $2000 income increase could cost them tens of thousands in new healthcare premiums, co-pays and other out of pocket expenses.

      I have always been against Medicaid expansion for this very reason.  I think all Americans should be in the same program with assistance for premiums apportioned on a sliding scale.

      •  You can always change it back later (1+ / 0-)
        Recommended by:
        Samer

        just as these same states have -- this year -- reduced the maximum allowable income for Medicaid eligibility to absurdly low (unlivable) levels.

        So far, it has not proven impossible to shrink Medicaid eligibility. It's been quite feasible, and states have done it, even at the height of the Great Not-Quite-Depression. Once you've established that poor people are expendable and no political risk to you, you can do whatever you want to.

        So what they're arguing is that they have to deprive poor people of health care now, in order to be sure of being able to deprive them of health care into the indefinite future if circumstances change.

        And BTW those people you're worried about could (with the right incentives, apparently) scramble up to just over the eligibility line? They'll be eligible for mostly-subsidized ACA policies on the exchange, or would be if the same states weren't fighting tooth and nail to avoid having the exchange functional in their states. It is simply not true that earning an extra few dollars will suddenly hit them with $10,000s of out-of-pocket expenses -- even if they hit the out-of-pocket maximum every single year.

        •  Ok.. $5629 (0+ / 0-)

          In Illinois if you jump from $32k in  income to $33 k in income you are dinged for $5629 more in healthcare costs for a family of four.

          And BTW those people you're worried about could (with the right incentives, apparently) scramble up to just over the eligibility line? They'll be eligible for mostly-subsidized ACA policies on the exchange, or would be if the same states weren't fighting tooth and nail to avoid having the exchange functional in their states. It is simply not true that earning an extra few dollars will suddenly hit them with $10,000s of out-of-pocket expenses -- even if they hit the out-of-pocket maximum every single year.
          Ok.. after looking this up, a family of four moving from Medicaid to ACA coverage jumps to a premium of $1129 per year with out of pocket expenses going up to a max of $4500.

          Not tens of thousands, but way more than a family of four can afford.

          That is a potential jump fo $5629 per year just for making $1000 more income.

          To me, this creates a permanent dependency class.

  •  Texas now leads in percentage of uninsured. (8+ / 0-)

    And it's thanks to the "leadership" of Gov. Goodhair, followed by a supportive GOP-dominated State Lege, and all his crony appointees at every state level in health/human services positions.

    I'm part of the "bedwetting bunch of website Democrat base people (DKos)." - Rush Limbaugh, 10/16/2012 Torture is Wrong! We live near W so you don't have to. Send love.

    by tom 47 on Tue Aug 12, 2014 at 11:17:52 AM PDT

  •  the voters are so dumb now. (10+ / 0-)

    even if i was a republican i would be pissed that my governor is turning away money that other states are getting just so he can run for president.

    In Indiana 219 deaths per year are on Pence's hands.  He has already 1 year on his hands.  Will he go for double the deaths on his "christian" hands?

  •  We Cannot Survive Pundit Willful Idiocy Like This (4+ / 0-)
    Recommended by:
    MyMy, Kingsmeg, OldDragon, raspberryberet

    much longer.

    Leading health economist Uwe Reinhardt is baffled as to why Republican governors would turn down potential billions by refusing Medicaid expansion.
    Because they don't believe they should be offering any service at all.

    Jesus Hussein Christ, the conservatives have been explicit about their intention to cease government promotion of the general welfare since the Beatles were still touring. Where is there an adult in this country in position to do public communication that is unaware that the conservatives have been gaining power for many years?

    The proper analogy is like a CEO who intends to get out of a service line entirely. Perhaps the rest of the board dislikes the owner of the company offering the new product, and the CEO can use that ill will to gain support for pulling the company out of that market.

    But the CEO really doesn't care about the head of the supplier. He's not going on strike, he's pulling out of the entire market, for good.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy.... --ML King "Beyond Vietnam"

    by Gooserock on Tue Aug 12, 2014 at 11:28:43 AM PDT

  •  But, but, but,... (0+ / 0-)

    ...refusal will save federal dollars, right?

    I'm not always political, but when I am I vote Democratic. Stay Democratic, my friends. -The Most Interesting Man in the World

    by boran2 on Tue Aug 12, 2014 at 11:32:45 AM PDT

  •  Easy Answer - Prejudice is Irrational (8+ / 0-)

    The American paradigm. Belief trumps fact almost every time. People would prefer to cling to their disproven prejudice that causes real harm to themselves than admit they were wrong and reap the benefits of the truth.

    Patriotism is the last refuge to which a scoundrel clings. Steal a little and they throw you in jail. Steal a lot and they make you king.... Dylan

    by bywaterbob on Tue Aug 12, 2014 at 11:33:59 AM PDT

  •  This is a poor analogy (4+ / 0-)
    Recommended by:
    OldDragon, hbk, indres, raspberryberet

    From the get-go, this analogy falls into the false premise that government is a business.  Businesses exist to maximize profits.  Governments exist to serve their constituents.  Thus CEOs and Governors have very different objectives in serving their constituents.

    What Republican governors have done is far worse than A CEO foregoing a product because he/she doesn't like the inventor.  They have failed to utilize the resources available to them to maximize the benefit of their citizens.  In short, they have broken the social compact between government and its people.  The result is people are dying.   And it is for sheer political purposes (although as a commenter noted above, Republican governors have obfuscated the issue by exaggerating remote future costs rather than admit their brazen political calculations).

    The good news is the longer this goes on and as people in the Red States see the benefits that Obamacare are providing to people in the Blue States, the pressure for change will be enormous.

  •  Of course, the ACA is also the cruelest kind of (0+ / 0-)

    kludge, and there are real reasons not to be so enthusiastic about forcing a fraction of the "uninsured," a/k/a without real access to medical resources from preventive to treatment, into the clutches of the "UNsurance industry."

    For any one who wants to read, here's just one current entry in the literature:

    "Obamacare: Complexity and Crapification mean Recission Abuses Are Alive and Well," http://www.nakedcapitalism.com/...

    There's so much more, of course. But we can take pride in "succeeding" by getting so many new people on the UNsurance treadmill...

    "Is that all there is?" Peggy Lee.

    by jm214 on Tue Aug 12, 2014 at 11:45:10 AM PDT

  •  This is the logic (3+ / 0-)
    Recommended by:
    greengemini, QuelleC, Audri

    If you take money from somebody you really, really hate, then you have to stop kind of sort of hating them, some.

    And that will never do.  The hate is far too precious.

    Republicans: Taking the country back ... to the 19th century

    by yet another liberal on Tue Aug 12, 2014 at 11:45:23 AM PDT

  •  Here in Virginia (4+ / 0-)
    Recommended by:
    greengemini, OldDragon, hbk, indres

    No Medicaid expansion means an extra cost of $1,177 for every man, woman and child over the next ten years. That is a "tax", and should be presented as such, and in all the states where the blockheads hold sway.

    •  really? How so? (0+ / 0-)

      Does that assume that people go ahead and get all the medical care anyway, and it gets paid for somehow through the state budget? Link to the calculations?

      I would have thought that the cost would be reckoned more likely in unnecessary sickness, suffering, and premature deaths, as people forego medical treatment because they have no way to pay for it.

  •  Please Help! (1+ / 0-)
    Recommended by:
    greengemini

    Please help us and tell Rep. Bradley Byrne (of Alabama) to support expanding Medicaid Please call Phone: (251) 690-2811 Phone: (251) 972-8545 phone: (202) 225-4931 fax: (202) 225-0562 (let him have it)   

    Please help us and tell Governor (of Alabama) Bentley to expand Medicaid.  Here’s his contact number 334-242-7100 or fax 334-353-0004. (let him have it)       

  •  I'm starting to think it's not (4+ / 0-)

    about personal opposition to Obama.  It's a lot more about racism, and hostility toward their own population.

    190 milliseconds....

    by Kingsmeg on Tue Aug 12, 2014 at 12:03:02 PM PDT

  •  Here in Arizona, the GOP Primary for (2+ / 0-)
    Recommended by:
    indres, PanoramaCityChick

    Governor has become quite nasty with a lot of attack ads. One recent one I've seen against the one "moderate" in the race attacks Mesa Mayor Smith for supporting Medicaid expansion using a truly novel if ridiculous approach: it claims that all those folks getting expanded Medicaid have had to give up their private plans and forced to go on Medicaid instead! Except, that Medicaid here in Arizona is AHCCCS and that program utilizes a number of privately administered plans. And really, how many of those now eligible for Medicaid expansion here had any kind of decent insurance prior to getting on AHCCCS?!!

    Just another faggity fag socialist fuckstick homosinner!

    by Ian S on Tue Aug 12, 2014 at 12:14:41 PM PDT

  •  Or like my nutty right wing friend said... (3+ / 0-)
    Recommended by:
    hbk, PanoramaCityChick, indres

    "Obamacare has destroyed our healthcare system."

    The only problem is my friend hasn't had insurance in over 20 years.

    Go figure?

    ...the GOP seems perfectly willing to hold their breath until the whole country turns Blue.

    by tommy2tone on Tue Aug 12, 2014 at 12:16:57 PM PDT

  •  imagine (0+ / 0-)

    Imagine being the shareholder of a publicly traded biotech company whose management and board were considering hiring a new VP of research.  You have a selection of candidates all with prestigious ties and qualification.  The most qualified candidate is a black women who is nationally recognized in basic research and bring drugs to market. You however choose the white male, who although well qualified, does not have the papers of product experience.  The reasoning is that the female might complain that she is not paid equally to other VP officers or might bring about some other equal opportunity suit.

    The basic fallacy we still suffer is that the free market is rational and corporate decisions are made on a simple cost basis or other completely logical form. We see many examples where corporate logic is not rational, and presuming that is it is at best naive and worst fraudulent.

    Governors rejected the ACA for the same reason we still have a hostile work environment for female technical workers and the military is hanging on to archaic qualifications for recruits.  It is seen as a threat to status quo which enables certain persons to profit beyond what they might if certain barrier were not in place.

    She was a fool, and so am I, and so is anyone who thinks he sees what God is doing. -Kurt Vonnegut Life is serious but we don't have to be - me

    by lowt on Tue Aug 12, 2014 at 12:31:25 PM PDT

  •  The key reason given here (1+ / 0-)
    Recommended by:
    OrganicChemist

    I've wondered why on God's green earth would ANY state governor not accept millions and millions of dollars from the federal government to expand Medicaid in their state.

    There are all kinds of reasons given but the ONE reason all of these governors and state legislatures have in common is that they say they lack trust in the Federal Government that they will follow through with that so-called "free" money (100% of the cost of expansion at first then lowered to 90%).  They say that the way the ACA has been implemented and the myriad changes that have taken place since it became law has made them very suspect with what would or could happen going forward.  

    Not defending that, just presenting what is being said.

    •  The fallacy of this (4+ / 0-)

      I know you were just stating it and not defending it.   The bullshit in this argument is that the impact of not taking the "free" money is so much more expensive.

      First, it is worse for the people who would have gotten insurance but still don't have it.  That cannot be debated

      Second, it is worse for those still buying health insurance because their premiums still must be structured to pay for all the emergency care of those in the first group.  That cannot be debated

      Third, it is worse for the rural residents whose hospitals are closing due to lower federal receipts.  Certainly those residents are worse off, too.

      All of these undebatable costs to prevent a speculative budget problem in the future that no one can actually demonstrate will exist.  And the argument that the Federal government will screw it up?  It's money, like highway funds.  They sure never turn down those federal funds.

      It's political bullshit.  and the sale of that bullshit is aided and abetted by a media that is too incompetent, too lazy, and too corrupted by access to power to explain the truth.  

      It's sad and it's costing lives.

  •  If you ever get a chance to see Reinhardt (0+ / 0-)

    give a presentation - take it.  Smart and very funny.

  •  Not irrational for many people to oppose Medicaid (0+ / 0-)

    It's stupid to say that it's irrational to refuse medicare expansion.  Can't anyone act according to principle? Ostensibly Republicans are opposed on principle to this kind of socialist government intervention, so if they refuse this could conceivably help to bring down the law eventually - since it prevents it from working properly.  Whether politicians are actually guided by principle is another question, but if they don't that doesn't make them irrational.

    But the fact is that the benefits of the Medicare expansion go only to those making more than the current Medicare upper limit and less than 100% of poverty level - not a huge fraction. Obamacare itself may give subsidies to those making up to 400% of poverty level, which is usually just above median income. But who is going to pay for all the subsidies in Medicare and Obamacare? Almost half the population, those making over 400% of poverty level. And even those making less than 400% may wind up paying more even if they get some subsidies.  As far as I know, Obamacare did not legislate a free lunch.

    It would certainly be irrational for anyone who is eligible for the Medicare expansion to refuse it, unless they are opposed on principle.  But it is actually in the monetary interests of almost half the people in the country to minimize any expansion of Medicare and Obamacare - they have to pay for it but they get nothing (except some changes in the rules for insurance).

    The situation would be at least ostensibly different with single-payer or other true universal care.  In that case everyone would be getting health care from the program.  This is how Medicare works, and nobody really wants to eliminate it - Republicans just claim they will make it better by voucherizing and privatizing it.

    •  MedicAID, not MediCARE, please (3+ / 0-)
      Recommended by:
      indres, raspberryberet, QuelleC

      and the new eligibility goes up to 138% of poverty level. Given how low many of these same red states have set the eligibility up to now, that's a sizable expansion, not a token one.

      And in many states pre-expansion, childless adults were not eligible at all, regardless of income, so it's opening up new categories of people.

      Your arguments could justify why a Congressman would vote against the law. (I disagree, but it's at least a cogent argument.) But since the law passed and is in effect, the non-participating states are paying for the tax increases to pay for it -- they just aren't getting the benefits of it. They're subsidizing the poor people in the expansion states. I don't see how state politicians justify that on financial grounds, only on purely ideological ones.

    •  That's not very principled (0+ / 0-)

      There's no principle in States Rights over Human Rights.

      Republicans: Taking the country back ... to the 19th century

      by yet another liberal on Tue Aug 12, 2014 at 05:36:47 PM PDT

      [ Parent ]

  •  It is perfectly clear what is going on (1+ / 0-)
    Recommended by:
    raspberryberet

    We are not going to let this {fword}ing {nword} in the White House tell us what to do.

  •  They don't believe that Government (2+ / 0-)

    should lift a finger to help those "little people".

    Multi-national corporations with piles of Campaign Cash
    are a different story altogether.

    Those "people" are really Important.

    God forbid that anyone starts believing that the Government
    can Ever accomplish anything.

    Next thing you know, those "Little People" will be demanding
    real RESULTS from the Republican Party !!!

    On Giving Advice: Smart People Don't Need It and Stupid People Don't Listen

    by Brian76239 on Tue Aug 12, 2014 at 04:49:47 PM PDT

  •  Boy are we in a mess (0+ / 0-)

    Sorry this is a personal comment but I live in a state that didn't expand so there is Medicaid up to 100% of poverty not 138%.  I was actually shocked to learn last March that my tiny unemployment check and my son's part time job through college qualified us for the ACA with a $550 subsidy.  Well, I never actually got that unemployment since the republicans cut it off and things are bad enough I applied for SNAP since I had no income.  Suddenly I'm told I qualify for Medicaid, but my son does not make enough to stay on the ACA; he falls through the donut hole.  I was sort of upset I went ahead and upset the applecart but the very nice rep at Healthcare.Gov told me if I hadn't I'd be in trouble.  In fact, there is a very good chance I will have to pay back some or all of this subsidy since they backdated my eligibility to June. I have more phone calls to make to my current insurer about the change and Healthcare.gov They applied for Medicaid for him just to get a denial to see if there's any possible way to keep him covered. We still had to pay for this month's premium since the subsidy for August had already gone out.  I have to tell you I am scared to death over my tax situation.  We weren't even able to get in to see a doctor, nobody is taking new patients.  Maybe I can with the Medicaid network because I am at the end of my rope. This is the mess republican governors put us under.

    Quelle connerie la guerre.

    by QuelleC on Tue Aug 12, 2014 at 07:47:17 PM PDT

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