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Medicaid Expansion Confounds Conservatives

Expanding the state's Medicaid program under the federal health care law makes fiscal sense to some politicians for whom it doesn't make political sense.

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Slogans can get in the way of politics. A number of the combatants in the quarrel over Medicaid expansion in Texas regularly tell voters that government should be run more like a business.

State officials, starting with Gov. Rick Perry, want the state to stay away from any expansion outlined in the federal Affordable Care Act. They object to creating an entitlement program where none currently exists, because they say they fear it will grow into a money-gobbling monument to big government — socialism, even.

Besides, they say, Texas doesn’t have enough doctors and other medical professionals to provide care for the newly insured.

Those are political arguments. The business arguments — the financial arguments — go in the other direction. The state could abandon the expansion whenever it wants. In the meantime, the vast majority of the costs would be borne by the federal government. Turning away from a pot of money because it might disappear some day? Texas was built on businesses — oil, gas, real estate, agriculture — that ebb and flow, boom and bust.

And politicians understand how businesses operate.

The governor is poaching jobs from other states, evangelizing in the name of economic development on behalf of Texas; that’s sufficiently predatory enough and potentially profitable enough to qualify in some circles as businesslike. (Yes, he might also be running for national office again, but Ann Richards, who didn’t have national aspirations, made similar forays into other states.)

On the other hand, the governor has been a full-time government employee since 1991.

Lt. Gov. David Dewhurst is investigating what he says is a top aide’s multimillion-dollar embezzlement from his campaign accounts. In the political sense, it is going to be difficult for Dewhurst to argue that his prowess as a businessman and his mastery over money deserve more time on the state payroll. But the self-made zillionaire obviously knows how to run a business — that’s how he got rich.

Both Perry and Dewhurst can claim to know how the business world works, whether their recent records support it or not. But look at the capper: They and others are talking seriously about walking away from a gargantuan federal freebie.

The federal government is offering to pay all of the costs of expanding the Medicaid program to some of the state’s uninsured population for three years, then to pay 90 percent of the costs for several years after that. Texas could, according to a report commissioned by Texas Impact, an interfaith public policy group, spend $15 billion over the next 10 years and pull down $100 billion in federal funds as a result.

Here’s the business question: Why leave that kind of money on the table, especially if it’s going to be spent elsewhere if Texas opts out?

The argument for expansion is that it would take care of a lot of people for some period of time — even if it doesn’t take care of them forever. The choice is between insuring a crowd of people for a few or many years, or not insuring them at all. Between providing their health care in expensive and inefficient emergency rooms, or taking care of them by expanding Medicaid.

It’s not just a good-government take-care-of-those-less-fortunate thing, either. Medicaid has enough flaws to feed a dozen think tanks. But by expanding Medicaid, the state would also bring in billions of dollars to pay for health care for people who aren’t insured now, providing relief to local taxpayers who wouldn’t be on the hook for nearly as much uncompensated care, turbocharging the state’s medical economy, and bringing federal tax dollars paid by Texans back into the state.

If you don’t do that last bit, by the way, the money would otherwise go to places like California, Massachusetts and New York. Where’s the business sense in that? And where, because that’s a transfer of wealth in some measure from red to blue states, is the political sense?

It might be true that a Medicaid expansion will work only for a few years in Texas and other states; they can quit if that time comes. For many officeholders, it makes political sense to opt out. But if they were running state government like a business, without the political undertow, the conversation would already be over.

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