GOP would cost-shift massive obligatory medical costs to states

Adapted from  an item in Robert Whitcomb's "Digital Diary'' in GoLocal 24

The Congressional Budget Office figures that the Republican healthcare bill would reduce the federal budget deficit by $337 billion through fiscal 2026. I doubt that, but even assuming that it’s true, it doesn’t project how much the bill could cost the states.

A problem is that every state mandates that all sick and/or injured people who show up in inefficient and expensive hospital emergency rooms (which is most of them), and indeed at many other providers, must be treated regardless of ability to pay. There will be a heightened flood of such people at ERs over the next few years if the GOP bill is enacted because many of these folks would no longer have coverage that has let them get preventive treatment as part of a regular clinical relationship with a physician, especially with a primary-care doctor.

Hospitals and other providers and state governments would have to eat much of the cost of caring for the low-income people cast off with the demise of the Affordable Care Act. Unless state governments decide that they’ll just let a lot of poor people die on the street. Now that’s libertarian!

As former Massachusetts Gov. Mitt Romney said in 2006 in explaining his health-insurance plan for the Bay State: “Some of my libertarian friends balk at what looks like an individual mandate {as in the future Affordable Care Act}. But remember, someone must pay for the healthcare that must, by law, be provided: Either the individual pays or the taxpayers pay.’’

As for the alleged evil of “individual mandates,’’ states have long had them for auto insurance, and generally those who want to own a home are compelled to buy property insurance to get mortgages.

In any event, the Republican healthcare plan, among other things, is a great big inefficient cost-shifting to the states.

There are elements of the GOP approach that, in principle, have merit. For instance, the Trump administration wants the states to charge Medicaid patients at least some premiums, require them to pay part of their emergency-room charges (Medicaid patients tend to overuse ER’s) and push recipients to get jobs. These changes might reduce some of the vast amount of waste pervasive in American healthcare. And everyone should be reminded that healthcare is never “free’’; it’s just a question of who’s paying for it. But what percentage of Medicaid folks can meet these demands is unknown.  Many of them are already under a lot of economic and other stress.