Federal Tax Systems inequitable subsidizing of health care
By Sen. Bob Deuell
Texas Insider Report: AUSTIN Texas The recent analysis of Medicaid expansion done for Methodist Health Care Ministries and Texas Impact by (former Comptrollers Office official) Billy Hamilton presents an incomplete view of
the possible financial effects on Texas of expanding the Medicaid program as prescribed by the Affordable Care Act.
While I do not dispute the numbers regarding the cost to the state and the federal government for the expansion I do question Mr. Hamiltons conclusions of the positive benefits regarding:
- Savings
- Increased Tax Revenue
- Effects on the Economy and
- Job Creation
Mr. Hamilton who has my utmost respect does not mention the negative consequences of Medicaid expansion. While some will couch the decision not to expand Medicaid as political such an expansion is not good public policy.
Many people who would be eligible for Medicaid under the expansion already have health insurance and would of course leave their employer-based insurance to enroll in Medicaid. The net effect in addition to an unnecessary increase in cost to the Medicaid program would be to shrink the existing private health
insurance pool and in turn raise premiums for those left in that system.
This will
cause some businesses or individual employees to drop their insurance and hence create a new class of uninsured. It will also start the cascade for the unstated goal of the ACA to have a single payer government health care system.
Also not mentioned is that the federal government cannot afford to pay for the expansion of Medicaid. With 16 trillion dollars in debt and over 100 trillion more in projected unmet obligations for Medicaid Medicare and Social Security how can we in good conscience put the federal government more in debt even if those in Washington are willing to do so?
One has only to be a casual student of history economics and public policy to know that at some point the federal government will indeed withdraw the generous monetary match. Yes we can put a stipulation in to retrench the expansion when that happens but can anyone imagine the reality of immediately taking Medicaid from over a million people who have come to depend on that government system rather than private enterprise? It simply would not happen.
Mr. Hamilton mentions tax revenue increases. Do we really want to expand a government program in order to collect more taxes? Regardless is it good public policy to justify such an expansion by saying the
taxes collected will pay for it? Collecting more tax revenue from the expansion of Medicaid has the effect of taxing tax money.
Money for uncompensated care comes from a combination of general taxation of income and other revenue at the federal level taxation of sales business activity and property tax at the state and local level cost shifting and charitable donations of time and money.
Health care costs billings and financings are distorted and illogical.
It is rare for charges for medical care to reflect the actual cost of that care. It is rare for an individual to pay for health care directly or in proportion to that actual cost.
Consider also
the complexity of taxation and budgets at the local state and federal level. It is unreasonable to think that any savings reimbursements or new income would be segregated or tangible enough to refund monies either back to the state government or to the taxpayers in the form of reduced property tax or other tax refund.
In addition Medicaid has serious access and cost issues. Is it reasonable to put more patients in that system before changes are made? Many people with Medicaid do not have access to health care. Many people without insurance do.
The solution for Texas and other states is to embrace a state version of the Patients Choice Act (PCA) filed in Washington by Senators Richard Burr and Tom Coburn and Representatives Paul Ryan and Devin
Nunes in 2009. The PCA is a comprehensive bill addressing choice prevention an insurance exchange that is flexible and patient friendly and malpractice resolution.
This bill recognizes the inequity of the federal tax system of subsidizing health care for higher income workers by allowing health insurance expenses to be tax deductible.
The bill allows a tax rebate of $2300 for individuals and $5700 for families to be used for health care in the private sector. The money planned for Medicaid expansion could be given to the states for a state version of the Patients Choice Act. This is in essence what we in the Texas Legislature Chairwoman Jane Nelson Lt. Gov. Dewhurst and Gov. Perry have been advocating in the form of a Block Grant.
Given the estimated 1.3 million who would be eligible for Medicaid under the expansion this would represent less government spending tax fairness and would provide health care for low-income Texans and put them in a better system.
Senator & Doctor Bob Deuell is Chairman of the Senate Economic Development Committee Vice-Chair of both the Senate Committee on Health & Human Services and the 
Senate Committee on State Affairs. He is also a member of the Senate Finance Committee and the Senate Natural Resources Committee. Deuell represent the citizens of Texas Senate District 2 which includes Delta Hopkins Hunt Rockwall Kaufman Fannin Rains and Van Zandt counties and parts of Dallas county.
