Tyler Cowen Desperately Tries to Justify States Rejecting Medicaid Expansion – And Fails

And If Someone as Smart as Mr. Cowen Cannot Justify the Refusal – No One Can

Mr. Cowen Turns His Head From Reality

As part of the health care reform (?) act the Federal government provides states with the opportunity to expand the eligibility for Medicaid, with the Feds picking up all of the costs for a while and then picking up 90% of the costs.  The logic for enrolling in this program is so great that even some conservative Republican governors, notably ones in Arizona and Florida, are on board. 

Conservative economist Tyler Cowen though thinks that the people who prescribe political motives to Republicans turning down the expansion don’t understand the economics of the issue.

Carter C. Price and Christine Eibner have a new study in Health Affairs suggesting a definite “yes,” and I have seen this piece endorsed numerous times in the blogosphere and on Twitter.  I do understand that part of their argument is a normative one, given the desire to expand insurance coverage for the currently uninsured.  But they and their endorsers also seem to be making a state-level financial prudence argument, as if there were no possible reason for a state not to expand participation behind sheer ideological stubbornness.  On that matter I don’t think they have pondered the problem deeply enough and they fail an intellectual Turing test.

But it is Mr. Cowen who fails the Turing test.  Here is his rationale of why states might rationally turn down Medicaid expansion.

Let’s start with a simple observation, namely that a Republican may win the next Presidential election.  There is also quite a good chance that such a victory would be accompanied by a Republican Senate (and House), given the distribution of vulnerable seats.  That means a very real chance that the federal government will scale back its commitment to Medicaid expansion, for better or worse.  States don’t want to be left holding the bag, and governors know it is hard to take back benefits once granted.

Mr. Cowen doesn’t think anyone has made the cast against his arguments, but let’s see just how easy it is to destroy Mr. Cowen’s position.

1. Only conservative Republicans have turned down the expansion.  Is it possible that every Democrat is ignorant of the risk that Mr. Cowen purports to exist?  Or is the more likely explanation that this is politically driven?  Use Occam's Razor here.

2. Under Mr. Cowen’s logic, states should reject every Federal program that provides funding, for each one could leave the states holding the proverbial financial bag.  Anyone see any states rushing to end receipt of Federal money?

3. States that turn down the expansion will probably see their health care costs rise for both the government and private citizens, as inefficient emergency room care is provided those who could have but do not have Medicaid coverage.  There is no big fiscal savings from turning down the Medicaid expansion.

4. Assuming Senate rules do not change, the type of change in health reform laws that Mr. Cowen is talking about would require 60 votes in the Senate.  Even if Republicans take control of that body, as is highly possible no one thinks they would have 60 votes, or even 50 votes to vote away Federal support of Medicaid expansion.

Well that’s just a few off the top of one’s head.  And should anyone doubt that Mr. Cowen has no knowledge of how things are in the real world, there is this.

Governors are not stupid, or their chiefs of staff are not stupid, and many governors are far less ideological than they let on.  They are politicians.  And they are politicians who understand that the federal government is not to be trusted and yes if you wish you really can blame that on the Republicans, or indeed on any prospective switch of power.  That is why we are not seeing more states do the Medicaid expansion.  In the meantime, the debate needs to catch up to the reality.

Well, yes it does need to catch up with reality, but reality on the part of apologists for conservative Republican governors.  Mr. Cowen seems like a pretty decent person, and it is probably almost impossible for him to imagine that a conservative Republican governor and state legislature would doom millions of citizens to inadequate health care just for the politics of the issue.  Indeed it is hard for the rest of us to conceive of that, but in reality that is what is happening.  It's called Modern Conservatism.