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“I Want to Believe” This Isn’t Obamacare

Updated: Apr 13

X-Files fans are familiar with the poster in Fox Mulder’s office. If you weren’t an X-files watcher, you probably don’t know that Mulder, an investigator of paranormal phenomena, gradually uncovered an interplanetary alien conspiracy to take over our planet.

It’s a free country: people are entitled to believe in interplanetary alien conspiracies, or indeed to believe in whatever they want. But if Fox Mulder were in the Arkansas state senate, that would be a problem. When people who are state legislators believe in things that are not justified by reality, that is a matter of public concern.

This brings us to Senator Jason Rapert’s latest defense of the “private option.” Rapert recently explained his support for Medicaid expansion in these terms:

In short, the GOP Private Option is essentially what we all say we want – Medicaid Block Grant funding to allow states to innovate for their own populations – we are getting the option to innovate without getting the full power of the purse.

This is a terrible misdescription of the private option. If the private option were a bloc grant, that truly would be a step in the right direction. A bloc grant is a program in which state government accepts a check from the federal government in exchange for a commitment to spend the money on the problem. A bloc grant doesn’t establish an entitlement population or require obeisance to libraries of federal laws and regulations. In short, the private option is no bloc grant.

When I first heard about the private option, I thought it might behave like a bloc grant – one that could transcend the problems of Medicaid. I was far from the only person who wanted to believe. But reality intruded last month, when the federal government informed us all (in the now-notorious “Good Friday” memo) that private-option clients will still have to receive traditional Medicaid benefits through traditional Medicaid funding rules. AAI experts confirmed this, Manhattan Institute experts confirmed this, Heritage Foundation experts confirmed this. It isn’t just a bunch of ivory-tower intellectuals who say this stuff: Medicaid directors on the ground say it too.

It’s a shame that we have state legislators who so misunderstand the basic nature of the “private option” that they are now misleading their constituents. But I understand the terrible power of “I want to believe.”

The other night, I witnessed state legislators at a community forum in Benton repeatedly explain that if Medicaid expansion didn’t work out, Arkansas could just end the program. For them, it’s a simple matter; the bill they wrote says they can end expansion; therefore, they can end expansion. AAI research has demonstrated that it’s not that simple – that there is a substantial risk that, once Arkansas accepts Medicaid expansion, Arkansas has accepted Medicaid expansion forever. Unfortunately, logical arguments are not as powerful as “I want to believe.”

I’ve seen state legislators use lots of words like “free-market” and “competition” and “private sector” to explain how their version of Medicaid expansion will be different. These explanations disregard the rules laid down by the Good Friday memo – which is to say, they disregard reality. Market-based reforms can only work to the extent that providers can compete by offering varying plans delivering varying goods of varying price and varying quality. That isn’t a possibility under Medicaid rules. Medicaid benefits offered through private insurance companies could conceivably result in some price efficiencies, and the advocates of the private option deserve praise for the fiscal reforms they have attached to their idea. But the essential conservative concern about Medicaid expansion – that it’s a terrible way to extend health benefits to people – has been completely ignored by private option advocates. Legislators advocating the “private option” who claim that it will improve people’s health relative to conventional Medicaid benefits, or that it will take people off the Medicaid rolls, or that it will provide benefits that are more like private insurance than conventional Medicaid, have fundamentally misunderstood the nature of their proposed program. Unfortunately, what we have seen in the last few weeks is that (to repeat) logical arguments are not as powerful as “I want to believe.”

This morning, AAI president Dan Greenberg was a guest on the Alice Stewart Show invoking Milton Friedman – who was perhaps the 20th century’s most influential explainer of how certain government programs simply do not work. Greenberg recalled one of Milton Friedman’s most famous columns, “Barking Cats,” in which Friedman described the critical response to his own critique of the inherent flaws of the Food and Drug Administration’s procedures.

Friedman explained that he received many letters dismissive of his position that some bureaucratic goals were not achievable, no matter how much the rules were changed. Many of the letters he received said something like “I don’t agree that the problems you describe are unfixable; you just need to change the rules in certain ways and hire better administrators.” Friedman’s response to these suggestions is worth quoting in full:

I replied as follows: “What would you think of someone who said, ‘I would like to have a cat, provided it barked’? Yet your statement that you favor an FDA provided it behaves as you believe desirable is precisely equivalent. The biological laws that specify the characteristics of cats are no more rigid than the political laws that specify the behavior of governmental agencies once they are established. The way the FDA now behaves, and the adverse consequences, are not an accident, not a result of some easily corrected human mistake, but a consequence of its constitution in precisely the same way that a meow is related to the constitution of a cat. As a natural scientist, you recognize that you cannot assign characteristics at will to chemical and biological entities, cannot demand that cats bark or water burn. Why do you suppose that the situation is different in the social sciences?”

The answer is simple. It can be summed up in four words: “I want to believe.” Conservative advocates of the private option want to believe that they are not expanding Obamacare, despite the fact that they are being complimented on their Medicaid plans by the state Democratic Party and by Governor Beebe. Conservative advocates of the private option want to believe that the Obama Administration’s full-court press to get Medicaid expansion done in as many states as possible has nothing to do with Obamacare. Conservative advocates of the private option want to believe that expanding Medicaid will not entrench Obamacare.

They are wrong.

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