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Comment by liveoneggs | Hacker News Reader

Would you also take federal money to expand medicaid coverage to the poor citizens of your state?

If so you might not be qualified to be a republican governor.

Wouldn't it be much better to hire your friends as IT consultants, make broken systems as confusing as possible, and continuously change the rules, and then starve the half-assed system of funding in an attempt to keep people from signing up for coverage at all? What makes this plan doubly republican-friendly is that all players are your donors and most victims are minorities.

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> Would you also take federal money to expand medicaid coverage to the poor citizens of your state?

The federal money is an extortion scheme.

The way federal programs nominally work is that people with money pay taxes to fund the programs. The people with money disproportionately live in certain states, which is the justification for making it a federal program -- then you can have a uniform national program even if some states don't have the tax base to provide it themselves.

But then the representatives from the states with money make it so the federal government doesn't fund the entire program. This benefits them first because they can shift some of the tax burden from the rich taxpayers in their state to the poorer taxpayers in some other state where any of the program's beneficiaries are. It tries to force every state to fund part of the program from their own tax base even if the people in that state didn't want it, because the alternative is to pay the federal taxes anyway but not get any of the federal money.

Then it benefits rich people again because the rich states, of course, implement the programs and get the federal money, but any state that refuses the scheme that disadvantages them is still paying federal taxes and gets nothing. So now you're getting a transfer of wealth from poorer states to richer states -- a penalty the representatives from the richer states intended when they constructed the program that way.

But the poorer states may not have the money to fund the state's portion of the program, and in any event refusing it is the only way the state government has to protest the federal program being constructed in that way. It puts pressure on that state's federal representatives to reform or remove the program.

So don't blame the poorer states for not implementing the program, blame the richer states for passing it without funding it.

States pay for the health care of their poor residents either way.

Residents who do not have private or public health coverage still get health care. They go to the ER when they need help and they receive care in the most transactional and expensive way possible. The cost for this care is paid by all the other residents who do have private care (via higher prices) and in their taxes.

The goal of Medicaid is not to pay for more care, it is to better organize the care that is being provided, and in doing so, improve outcomes and lower the overall cost.

One reason Medicaid expansion has seen steady adoption, even in “red” states, is that earlier implementations have shown that this happens and the program is a net improvement.

> States pay for the health care of their poor residents either way.

Implying that a federal program is unnecessary because the states would have the incentive to do something anyway, but could then tailor the program to the geography and economy of their state instead of having something imposed on them that was drafted by Washington lobbyists.

> The goal of Medicaid is not to pay for more care, it is to better organize the care that is being provided, and in doing so, improve outcomes and lower the overall cost.

The problem is not that the patient pays otherwise, it's that the state if they want to implement Medicaid and get the federal money their tax base is paying taxes for regardless, has to put up even more money only to have the federal program dictate how they can spend their own money. That's the extortion -- they remove money from the state's tax base and only give it back if the state provides even more money and implements the program under the federal terms.

It gives the state no opportunity to make their own choices, which might have been more cost efficient. It destroys the "laboratories of democracy" the federal system was intended to have before lobbyists found a bunch of ways to cheat the constitution and take everything over centrally.

> One reason Medicaid expansion has seen steady adoption, even in “red” states, is that earlier implementations have shown that this happens and the program is a net improvement.

The main reason is because states can't afford to run their own equivalent program under their own terms when the federal government is raiding their tax base and then only returning the money with strings attached -- one of the major ones being that they have to spend even more of their tax dollars on the program whose terms are dictated by the federal program.

And this is not the only federal program that operates this way. So much of the poorer states' budgets go to spending money in order to get federal tax dollars under federal terms that they can't afford to do something different. Both accepting and refusing the money leaves them with not enough resources to do something on their own -- if they refuse it they end up with less money than they started with because tax dollars leave the state only to fund the program in other states, but if they accept it they have to pay even more and lose the ability to make their own choices.

It's unsurprising that many states would knuckle under to that level of coercive pressure -- the coercion is the intent. Otherwise the program would be a block grant, or simply not exist at the federal level so that federal taxes would be lower and state taxes higher, allowing similar programs to be operated by the states.

Notice that of all the people who downvoted that comment, not a single one attempted to defend having the program as a coercive centralized mandate from the federal level -- which was the criticism -- and instead the only argument is that a program of that nature is good. But whether the general idea is good or not is a separate question from which level of government should construct it.

Most people with normal morality think expanding health care access to the poor is a good thing to do, which is probably why they don't feel compelled to defend the "extortion".

If you have someone running around threatening people with a bow and arrow if they don't give up their money on the claim that Robin Hood will give it to the poor, the people who refuse are not inherently doing it because they hate poor people.

Especially when it turns out that a lot of people the money is coming from aren't actually rich, and a lot of the "people" the money is going to aren't poor people at all but major corporations.

States do have strong incentives to improve things for their residents, which is why, once ACA programs like state exchanges and Medicaid expansion are implemented, they are popular.

Many state elected leaders, however, have strong individual incentives to avoid any change that exposes previously hidden costs to their constituents, because then their opponents can accuse them of raising spending and/or taxes. (Even though they all know the cost has been there hidden all along.) This is the same incentive structure that inclines state politicians against spending state money on environmental protection, workplace safety, infrastructure, and many other areas where the federal government ends up taking the lead.

You seem pretty plugged in and sympathetic to the point of view of state elected officials. The idea that federal taxes are money stolen from states, for example, is a classic state politician talking point.

But I think you might be surprised how many federal actions are secretly supported by state officials who publicly campaign against them. They get to benefit from the material improvements delivered by the federal program, while blaming Washington for out of control spending, unfair coercion, etc.

> States do have strong incentives to improve things for their residents, which is why, once ACA programs like state exchanges and Medicaid expansion are implemented, they are popular.

But this is just defending the general concept of such a program, not a reason it has to be constructed at the federal rather than state level.

> Many state elected leaders, however, have strong individual incentives to avoid any change that exposes previously hidden costs to their constituents, because then their opponents can accuse them of raising spending and/or taxes.

How is it that federal elected leaders are immune from this incentive? And if they are, isn't that bad, because they would then for the same reason have no incentive to implement programs efficiently?

> The idea that federal taxes are money stolen from states, for example, is a classic state politician talking point.

It's a straightforward economic effect. Bob earns his wages which are then spent by some combination of Bob, the state government and the federal government. If the federal government takes more then the state government and Bob get less, and Bob is going to be in a bad way if there isn't enough left to make rent.

Meanwhile if the federal government uses the money for Medicaid then the state doesn't have to collect the money the federal government spends on it, but then it's the federal program setting the terms -- and if the state doesn't like those terms, Bob still has to pay all of the same federal taxes. The state can't use his money to operate their own program instead.

Federal spending is currently ~25% of GDP, which is more than it is for most states -- and a huge chunk of the money attributed to states is the state portion of the money required to implement federal programs. By the time you also pay for state programs whose funding couldn't reasonably be reallocated to something else, there is nothing really left. The states have lost the ability to try to do better because the federal government has locked up all the money.

> But I think you might be surprised how many federal actions are secretly supported by state officials who publicly campaign against them.

Well of course they do. They're opportunistic politicians. If they can't reasonably implement useful programs because the money they'd have to spend is already going to the feds then their remaining option is to claim credit for not spending it.

The point is, what would happen if the states were actually left with both the problems and the resources to solve them?

We know what would happen because that’s how things were before the federal programs were created. It’s not like all the states had everything solved and then the feds came in on top with Medicaid etc for no reason.

The federal government has been doing this since the depression/WWII, before which there wasn't enough of a tax base to support these kinds of programs at any level of government.

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