Where the budget goes from here
Published 11:52 am Wednesday, April 4, 2018
Last week I wrote about facts that were either wrong or not well thought out in the House of Delegates budget. Few in the House of Delegates were fully informed about how the Appropriations Committee arrived at its conclusions regarding Medicaid expansion.
I gave my thoughts on the facts at hand, which I believe better reflect the issue. Hopefully the end result is that we create a budget based on available revenues. Then, and only then, should we have separate legislation on the issue of Medicaid, or a better way to serve those in need.
This is a big issue. Currently, 22 percent of the state budget is Medicaid driven. Expanding it to 500,000 more people should be carefully thought through, understanding all the possible ramifications before we go down that road rather than after. The House Appropriations Committee thinks it can turn off the spigot as easily as it is trying to turn it on. The committee will learn that it won’t be that easy when someone is in the middle of treatments, or when nursing homes have to make changes.
On the federal level, some thought it would be easy to end Obamacare. They have now learned that reversing a policy is much harder than creating one. We have learned that in program after program. That is the reason we currently have a national debt that is weighing down our economy.
DYNAMIC ECONOMICS VERSUS STATIC ECONOMICS
I have great concern with how little people understand that all economic policy is dynamic rather than static. The difference being that planners assume that if you make a change everything else remains the same. That is static.
With dynamic policy planning, economists factor into the calculation that individuals and families will make different decisions based on their needs and values. Accordingly, they try to build into their planning a factor of how one change will affect their habits or improve their fortunes.
Examples are tax cuts under presidents Kennedy and Reagan. Those cuts of tax rates produced more dollars paid in taxes, something the Congressional Budget Office never predicted. This appears to be what might happen with the recent Trump tax cuts. We will not know until later, but companies are changing their policies and I fully expect these cuts will produce more tax revenue.
What will be the dynamics of expanding Medicaid for those in need of service?
Will it change how and where the underserved go?
Will some continue to wait until after clinics close, then go to hospital emergency rooms?
When there is no fee for medical service, people will want more. In rural areas, will there be enough providers to handle a rush of demand for new service?
Will there also be a greater demand for nursing home services, the most expensive way to assist the fragile?
If Medicaid is passed as proposed, how many will game the requirement of working a few hours a week, signing up for a class or two, or pretending to do a little community service?
We should all have empathy for the needs of others, but we mustn’t give able-bodied people a reason to be wards of others. We all need to understand there is a cost to someone for every service the government provides for “free”.
Frank Ruff represents Lunenburg in the state Senate. His email address is Sen. Ruff@verizon.net.