The Leaflet: Republican Governors Consider Expanding Medicaid

Published September 11, 2014

Republican Governors Consider Expanding Medicaid

States across the country continue to debate whether to expand their Medicaid programs under the Patient Protection and Affordable Care Act (PPACA). To date, 10 Republican governors have supported expansion. Republican governors in Indiana, Pennsylvania, Tennessee, and Utah are the latest to seek approval for their Medicaid expansion plans.

In April 2013, Arkansas Gov. Mike Beebe and the Republican legislature passed the state’s “private-option” plan. The plan was promoted as a market-oriented approach, but free-market supporters said the expansion would result in many of the same problems as traditional Medicaid expansion, including large spending increases. According to a new Government Accountability Office report, Arkansas’ Medicaid expansion plan will cost taxpayers an extra $778 million over the next three years.

In a Research & CommentaryThe Heartland Institute’s senior policy analyst, Matthew Glans, writes, “Expanding Medicaid can have repercussions beyond state budgets and the health care industry. Increasing government spending has a direct effect on the economy, shifting dollars that would have been spent in the private economy into state programs. It is important to remember government spending creates little or no income or economic growth; it is merely the redistribution of tax dollars taken from the pockets of taxpayers.”

States should first demand real flexibility from the federal government so they are able to innovate their Medicaid systems. Barring that, states should not expand their Medicaid systems, because without flexibility from the federal government they will have very little ability to decrease costs and offer better care to patients served by Medicaid.

Health Care
Research & Commentary: Gov. Mike Pence’s Medicaid Expansion

Matthew Glans explains how Indiana Gov. Mike Pence’s proposal to expand the state’s Medicaid program, known as the Healthy Indiana Plan (HIP), hides many flaws behind a veneer of free-market reform. The plan rolls back many cost-management components and transforms the limited HIP program into a substantial new entitlement for adults. It would greatly expand Medicaid, adding more than 284,000 able-bodied childless adults and 91,000 parents to the eligibility pool for Medicaid, an increase of nearly 700 percent. “If Indiana legislators allow this expansion of Medicaid and other government entitlement programs and increase public spending, the state risks undermining its recent economic recovery. Instead of expanding on a flawed model, legislators should turn instead to reform options like those piloted in Florida that reduce costs and offer better care to patients in the existing system.” Read more


Energy & Environment
Using Tax Code to Influence Behavior Is the Wrong Path
Policy Analyst Taylor Smith writes a letter to the Boston Globe in response to an editorial arguing the negative effects of creating a tax on carbon dioxide (CO2) emissions could be alleviated if all the revenue generated was returned to the economy using one or more creative ways, thereby reducing CO2 emissions at no cost to the economy. Smith says that is unlikely to work, since history shows any new revenue stream to the federal government would be permanent, while any tax cut or rebate implemented to create that revenue would be temporary. Moreover, the tax code should be used to charge people for the cost of government, not to manipulate corporate or individual behavior. Read more 

Research & Commentary: Ohio Common Core
Ohio legislators are debating HB 597, which if approved would repeal the state’s implementation of the Common Core State Standards. During a Ohio House Rules and Reference Committee hearing, Heartland Institute Research Fellow Joy Pullmann argued Ohio should repeal Common Core in favor of “proven” and “objectively higher” Massachusetts standards. Read more 

Budget & Tax
Research & Commentary: Lessons of Kansas’s Income Tax Reforms
Kansas has taken several steps in recent years to bring down its tax burden and make the state more competitive for new jobs and businesses. In 2012, Gov. Sam Brownback signed legislation enacting the largest tax cut in Kansas history; the reform plan reduced the state income tax rate to 4.9 percent from 6.45 percent and eliminated income taxes for about 190,000 Kansas small businesses. Of all the states lowering income tax rates, Kansas has become a flashpoint for the battle between liberals and conservatives over the effectiveness of income tax cuts. In this Research & Commentary, Matthew Glans argues that historically, income tax cuts have led to greater economic development and increased tax revenue. “Although the early results of the Kansas tax cuts were lower than expected, they were not in any way catastrophic and have begun to reverse. More time is necessary before passing judgment on their success or failure.” Read more

These People Think the Way to Keep Things Fast is to Bring in the Government?
In this article from Somewhat Reasonable, Seton Motley, president of Less Government, discusses the liberal approach to Internet regulation and how it will lead to a less affordable and slower Internet. “The Left consists of two groups of people running on two parallel yet very different paths to Oblivion. The Left’s leadership knows their Huge Government ideas are absurd and don’t work – but they’ll be in charge after the collapse they induce so they’re fine with it.” Read more


From Our Free-Market Friends
Are Unions Democratic? The Internal Politics of Labor Unions and Their Implications
“Labor unions in the United States are supposed to be democratically governed.” This new Manhattan Institute report points to reforms that could, and should, bring the practice of union democracy in line with the principles of American society and the spirit of the law. Read More




The September issue of Budget & Tax News reports on U.S. Sen. Dick Durbin‘s efforts to punish companies that engage in “inversions,” in which companies reincorporate in foreign countries with lower corporate income taxes and a territorial tax system instead of the worldwide tax system imposed by the United States. “It’s so irresponsible, Durbin’s position,” said Chris Edwards, director of tax policy at the Cato Institute. “We have a horrible corporate tax code … and he complains when corporations properly try to escape it.”

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