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Original article URL: http://bridgemi.com/2013/02/snyder-needs-to-tutor-legislative-republicans-on-the-realities-of-math/

Peter Luke:
Eye on the Capitol

Insights into the inside workings of Michigan's state government from a veteran newspaper correspondent.

Snyder needs to tutor legislative Republicans on the realities of math

$52 million

(Estimated net fiscal year 2023 cost of expanding Medicaid in Michigan, per the federal Affordable Care Act. The expansion would, by that date, cover more than 600,000 single adults and reduce the ranks of the uninsured in Michigan by two-thirds.)

$233 million

(Estimated net fiscal year 2023 cost of a Senate-passed bill, long sought by the Michigan Automobile Dealers Association, that phases in a sales tax exemption equal to the trade-in value of a car, boat, motorcycle or RV.)

$1 billion

(The net savings to the state budget over the next 10 years, if Medicaid expands, according to the Center of Healthcare Research and Transformation in Ann Arbor.)

$1.4 billion

(The cost, over the next 10 years, to state, local and school budgets of the vehicle trade-in exemption, according to the Senate Fiscal Agency.)

So, Michigan, guess which proposal is speeding through your Legislature?

Senate Bill 89 was introduced on Jan. 29, reported out of the Senate Finance Committee on Feb. 5 and approved by the full Senate on Feb. 6 on vote of 34-2, with one senator excused. A week later, the dealers association’s latest PAC report brought total expenditures made during the previous election cycle up to $415,000.

Meanwhile, several blocks east of the Capitol on Feb. 6, Gov. Rick Snyder appeared at Sparrow Hospital with business and health care groups to formally back Medicaid expansion. The response from Republican House Speaker Jase Bolger reflected the general mood of a skeptical caucus: Before any decisions could be made, questions would have to be answered.

A similar response in the previous session — when the car sales tax bill was approved in the House 106-2 before ultimately stalling in the lame-duck session — doomed Snyder’s proposal to set up a state-based health insurance exchange, as authorized by the ACA. As of last week, Republicans still couldn’t be bothered to appropriate $30 million in federal funding for a state-federal exchange partnership that Snyder is establishing with executive authority.

In blocking the exchange, reflexive conservative opposition to government expansion in general and the Obama administration in particular could be characterized as taxpayer protection. Unlike, say, giving car dealers the keys to the state treasury.

Opposing Medicaid expansion, however, cheats Michigan taxpayers in any number of ways that opposing Republicans have yet to concede.

If Medicaid is expanded, 100 percent of the $2 billion annual cost through 2016 is funded by Washington, which drops its share to 90 percent by 2020. It would cover expenses — mental health care for single adults and off-site health care for an aging prison population — now almost exclusively funded by the state to the tune of more than $215 million annually, or more than $2 billion over 10 years. Half of the overall annual savings of $275 million projected by the Snyder administration would be deposited to cover the state’s future share of the expansion.

Steve Fitton, a state health official, reiterated to House and Senate Appropriations committees last week that the set aside would cover the state’s obligation through 2034.

So, there would be no immediate state costs for the immediate economic benefits of providing rationalized health-care access to an estimated 242,000 uninsured adults. Right now, those uninsured residents are still getting crisis health care – the cost of which is transferred to those paying premiums for employer-provided health insurance.

Nevertheless, a greater burden of economic proof currently applies to Medicaid expansion than tax reduction. Other Republican governors such as John Kasich of Ohio and Rick Scott of Florida made emotional moral cases for expansion in their states last week. Snyder’s argument, though, is based on dollars and cents.

In coming weeks, Republican lawmakers must make a choice:

– Trust the budget professionals who work for them and a governor of their own party, as well as those who work in the hospitals in their districts and lobby on their behalf in the Capitol hallways;

– Or reject those arguments on the basis that a federal government that has doubled spending in Michigan in the past decade and bailed out its auto industry can’t keep its promises.

In the end, it will be up to the economic titans back in legislators’ home districts that will make the difference. Health systems are eating millions in uncompensated care and employers are paying an extra $1,000 per employee because the cost of that care has been shifted onto their benefit plans. Such pressure should prevail. And the Michigan Health and Hospital Association’s PAC spent more than the car dealers in the last cycle — more than $677,000. The group additionally spent more than $1.1 million on lobbying during those two years.

Given that the relevant committee chairs either back or are open to expansion, but their committee members may not be, the first floor votes to expand Medicaid could be the last ones cast on a single big budget bill sometime in June. Lawmakers in both parties, but Democrats especially, will be confronted with a difficult choice likely to be decided in Snyder’s favor.

That is, as long as Snyder makes it clear that he won’t sign a budget without it.

Peter Luke was a Lansing correspondent for Booth Newspapers for nearly 25 years, writing a weekly column for most of that time with a concentration on budget, tax and economic development policy issues. He is a graduate of Central Michigan University.

11 comments from Bridge readers.Add mine!

  1. dlb

    The GOP at both the State and national level is setting out to “win” at all costs regardless of what it does to Michigan and the nation! The “win” has nothing to do with sensible policy, the deficit, improving business climate or anything else I can imagine. It seems the only thing they want to do is beat the Dems, regardless of whether it makes sense or not and no matter what it does to the economy.

  2. Duane

    “Opposing Medicaid expansion, however, cheats Michigan taxpayers in any number of ways that opposing Republicans have yet to concede.” Mr. Luke seems to feel that as long the money is coming from the Federal government that is all that matters. He never mentions how that new money are not designed to be spend on the major cause of the current health probems (lifestyle choices), he doesn’t mention (or care) about the accountibility of the impact of the money. Mr. Luke seems to have only one care in all the articles he writes, money, more money. He never seems to wonder the cost that money takes on the people it comes from, on the economy as a whole, he simply wants more of other people’s money so the governements have more to spend.

    “Other Republican governors such as John Kasich of Ohio and Rick Scott of Florida made emotional moral cases for expansion in their states last week. Snyder’s argument, though, is based on dollars and cents.” I notice that Mr. Luke can only see things as being ‘moral’ when they agree with him, and when it applies to getting more money. Mr. Luke never seems to have any ‘moral’ concerns when it comes to spending other people’s money. Mr. Luke never seems to have any ‘moral’ concerns when it comes to holding those spending other people’s money accountable for achieving the impact that the spending was justified on. ‘Morals’ seems to just be another tool in Mr. Luke rhetoric when trying to belittle others that are not in agreement for getting and spending more of other people’s money.

    If Mr. Luke sees spending other people’s money as ‘morally’ justifiable, I wonder how he sees the economic sustainability of a government, a community, those ‘other people’. I wonder if Mr. Luke as ever consider what the cost of unlimited spending of other people’s money is. Simply look at Detroit, to see what will happen when spending is uncontrolled and the spenders aren;t held accountable. Michigan and the Federal government won;t turn into Detroit today or tomorrow, but neither did Detroit.

    1. David Johnson

      Mr. Luke’s opining of a well-supported “cost-benefit” argument seems lost on you, Duane. And, making such a case for it (as Gov. Snyder is attempting to do with a recalcitrant, hyper-partisan “anti-anything Obama” state legislature) does not preclude his support for the “moral” argument, as well. I found a more “morally objectionable” point being made in Mr. Luke’s reminder of how often “competing” fiscal legislation is seemingly so easily passed where PAC funding (i.e. auto dealers) is prevelent (where’s the PAC for those quarter million Michiganders w/o health coverage?). Thus, your tangental rant along some perceived link between “morals” and “spending of others’ money” is lost on the rest of us.

      1. Duane

        Mr. Johnson,

        What tangible metrics is Mr. Luke offering to verify any of the benefits will be achieved? What personal accountablitly is Mr. Luke offering with his claims of ‘moral’ jusitification? What specifically is suppose to change with all of what Mr. Luke wants to happen?

        It all seems to have to do with ‘good intentions’ and fiscal responsiblity is disregarded. Sustainability of the State as we know it has to be build on fiscal reality today. If you want a model of the reality look at how the municipalities and schools had their fiscal responsibility (fiunding) shifted from local to Lansing, now all we hear about is the financial problems of the those organizations as the State has had to cut back its spending. Why with an added trillion dollars a year in debt by the Federal government that shifting State fiscal decisions to Washington will not follow the same path.

        You claim I am ‘anti’ someone, you are wrong I am for change that includes actually getting fair value for the taxpayer dollars the Mr. Luke and others are so eager to spend.

        I want to see purpose written into every government program and spending, I want to see mesurable goals, I want to see performance metrics for each program, I want to see accounbtablity of those programs with specific ‘milestones’ and I want to see the successes leveraged across the government and failures shutdown or changed.

        When has Mr. Luke ever voice any interest in any of those things, when has anyone you claim I am ‘anti’ to ever done anything about what we get for all the money’s they are so quick to spend?

        As for the voting, I hold those who actually vote accountable for as best I can tell their is nothing that says they have to vote how anyone else wants. You can talk about the quarter of a million without coverage, but as best I can tell they have never been turned away when they needed medical care. I also noticed that when you mention PACs you ignore others making financial contribution in support of your and Mr. Luke point of view. It is much like the President saying how he will work to eliminate the influence of campaign money and yet he will provide quarterly personal access for those who contribute to the political orgainzation he favors.

        I understand, if you don;t agree with Mr. Luke it is a ‘moral’ issue and when you do he (and you are silent) on what those supporters actually do.

        It is like the partisan ‘right’ is the corrupting influence on today’s politics, but the partisan ‘left’ is non existant in the discussion.

        “your tangental rant along some perceived link between “morals” and “spending of others’ money” is lost on the rest of us.” I can appreciate that when spending other people’s money on your ‘good intentions’ is morally right and wanting to give those who’s money you want to spend more accountability for theat spending is lost on you. That is because you seem to have little regard for those who earned the money and what they had to sacrifice, what they achieved, to earn that money, you only want your ‘good intentions’ satisfied. As for my ‘rant’ at lease I include in it a method to get more value for your spending desires, then you offer in finding of ‘morally objectionable’. You are quick to condemn people that are willing to support their views with money when they are on the opposited side of an issue but I have some how overlook you concerns about those people who support your view with money. It is always interesting to me when ‘morally objectionable’ become selective base on the person and not on the action.

  3. Pat Kellogg

    To All of the Duanes,

    What happens to all the families that have lost their income and benefits due to no fault of their own? Do they go to the Emergency Room? You do know the results of higher cost in the Emergency Room and poorer health issues vs a family doctor? What’s cost effective and moral about that?

    1. Duane

      Pat,

      You seem to see it as money is the only answer. And you resist anyone who challenge that view.

      If all that is don’t is spend more and more money and never discuss the individual cases to help the individual’s make choices then all we will to is raise the cost and not improve the health of people.

      Why aren’t we talking about what is a foundation care, what are individual’s responsiblities of their own health, what are the expectation of our medical care system, what are the capacities/limits of our current system, there are many questions we never address because it is too easy to mask them with more money.

      Have you ever met a person that chooses not to have medical care coverage and ask them why? Have you ever ask a person making unhealthy lifestyle choices why? Have you ever look at a system that can keep a body functioning for years while the person is never going to recover? What questions do you have about health and medical care? What answers do you have other then spending more money?

      I have learned when people are less likely to think about a problem when there is unlimited money being spent on it, especially when it is other people’s money. Identify the purpose and set specific goal, cap the spending and let (force) people to be creative and get out of their way.

      One other lessen I learned, especially when it comes to a person’s health, if they don’t have to make some personal investment/sacrifice for it they will not do anything about it. Give it to them free and it will be wasted, make them responsible and they are much more likely to care and to work at it.

  4. C Foster

    Regarding Mr Levy’s statement “If Medicaid is expanded, 100 percent of the $2 billion annual cost through 2016 is funded by Washington, which drops its share to 90 percent by 2020″ Do you seriously believe that Washington will be able to follow through with the appropriated money to cover Michigan’s costs or any other state for that matter? Our Federal Government is BROKE….no balanced budget since 1998…always spending more than they have and always promising more and more. If they were in the private sector, the jokers in Washington would all be FIRED! Their “job” is to balance the federal budget every year and they can’t even compromise and do that. And the answer is NOT to take more money out of our pockets for taxes….JUST STOP SPENDING….QUIT PROMISING EVERYBODY THE MOON! Is it too much to ask to just have some common sense like we all have to in our own family finances?

  5. Pat Kellogg

    Duane, You think to much and have to0 little faith.

    1. Duane

      Pat,

      I have little faith in who and what they (politicians and those focused only on good intentions) are doing, they have no faith in people and what they can achieve.

      I have immeasurable faith in what individuals can do with the right tools and a commitment to change.

      My problem is that the two groups aren’t talking to each other (and seem to have little interest to do so), are willing to listen to what might be said (because of how it is being said).

      My faith faulters when ‘good intentions’ ignore accountability.

  6. Gracie Love

    Duane,

    You are right on track with accountability/resposibilty. The government has taken away the people’s ability of discernment. I am so fed up with spend, spend, spend, take, take, take attitude. I do not want to give to the poor unless I feel like I want to give to the poor. Not becasue I am selfish, it is because I bust my bottom for that money and by george I want the person I am giving my hard earned funds to, to be working towards thier goal, thier dream. I believe in people helping people, but people have to help themselves also!

    1. Duane

      Gracie,

      My concern that without accountablity, nothing changes except the amount of other people’s money that is being spent.

      If programs are not held accountable how is anyone to know what works and should be used by others, or what doesn’t work and needs to be changed or even where in needs to be changed, or even worse if some program was doing more harm and simply needed to be ended. If we use the current governments lack of accountablity and exclude the market place at best medical care will stagnate without anyone ebing able to recognize a growing failure in the system.

      What is so frustrating is all we hear about is spending money, mor eof other people’s money, and nothing about finding out what success looks like. Even Mr. Luke shows no interest in the effectiveness of how our money is spent as long as more and more is spent and it is spent his way for he can’t trust anyone that is spending other people’s money his way. .

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