Thursday, April 21, 2011

O'Malley Sees Tough Choices, Flees In Opposite Direction

My latest at the Washington Examiner Local Opinion Zone


As part of his national tour to burn straw man TEA Partiers and Republican governors, Maryland Governor Martin O’Malley (D), touts the “tough choices” he’s made. Choices such as “cutting” $6 billion from the budget while simultaneously increasing spending by over $1 billion, and prostrating himself before public sector employee unions, the alpha wolves of Maryland’s Democratic oligarchy.

In fact, O’Malley’s “tough choices” are just more kicking the can down the road.

Another example of a tough choice O’Malley can’t run away from fast enough (hat tip Ramesh Ponnuru at The Corner) is the issue of block granting Medicaid in House Budget Committee Chairman Paul Ryan’s (R, WI) budget plan. In a letter he signed with other Democratic Governors, O’Malley states block granting Medicaid would “leave states with an untenable choice between increasing taxes, cutting other state programs, or cutting eligibility, benefits, or provider payments.”

As Ponnuru notes, heaven forbid these governors make budgeting choices!

When it comes to responsibly handling Maryland’s Medicaid program O’Malley has avoided making any tough choices. Indeed, O’Malley’s record contradicts the letter’s claim that he has “pursued strategies to reduce Medicaid costs while still preserving the integrity of the program.”

According to a report from the Sage Policy Group O’Malley has pursued two contradictory objectives simultaneously. With one hand he has sought to constrain growth in expenditures and with the other expanded eligibility. During the 2007 special session, in which O’Malley raised taxes by $1.4 billion, he also expanded Medicaid eligibility from 40 percent of the federal poverty level to 116 percent.

Sage also noted Maryland Medicaid spending will consume over 20 percent of Maryland’s $34.1 billion operating budget for the fiscal year 2012, up from 18.6 percent since O’Malley first took office.

O’Malley and his fellow Democratic governors urge for federal plan that “creates cost savings, not cost shifting.” Yet, O’Malley’s previous two budgets have cost shifted $387 million to hospitals and insurance companies resulting in higher hospital rates and increased insurance premiums.

Furthermore, their argument that they would have to cut eligibility, benefits and provider payments is a false choice that ignores other options, which are politically untenable for their political base and special interest backers.

A 2008 report by the Maryland Public Policy Institute noted that the discussion of reform to Maryland’s Medicaid program has centered solely on expansion of the costly system, which provides sub-par care. The report identified several ways in which other states are capping Medicaid spending. More importantly, the report laid out a path to move people off Medicaid and on to private insurance through winnowing the 60 plus service mandates on health plans, which make private insurance more affordable.

However, eliminating the mandates would mean bucking Maryland’s health insurance titans, like Amerigroup—which uses those mandates to price out competitors—and risking the generous political donations it lavishes upon the Maryland’s one-party Democratic rulers. After all, the more people on private insurance means less Medicaid overpayments for Amerigroup.

Of course, O’Malley could move to implement these free market reforms and shore-up Maryland’s Medicaid program, but that would mean putting down the lighter and the gas can. Yet another tough choice this governor can’t make.

1 comment:

John J. Walters said...

Some time soon I'm going to actually have to hear O'Malley speak in person. I'd be very interested to hear what he says about increasing spending is actually equivalent to making tough choices and cutting back.

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