For the Deseret News
Published: Wednesday, Aug. 26 2015 12:05 a.m. MDT
FILE - Gov. Gary Herbert speaks during a panel discussion with patients and families who will benefit most from his proposed alternative to Medicaid expansion, Healthy Utah, in Salt Lake City, Thursday, March 6, 2014. The discussion was held at the Fourth Street Clinic.
Ravell Call, Deseret News
In an effort to build momentum for another attempt to bring Medicaid expansion to a supposedly conservative state, the governor is looking to impose the financial burden not on Utah taxpayers generally, but on the health care industry specifically.
You have to give credit where credit is due — and Gov. Gary Herbert’s team certainly is creative. In an effort to build momentum for another attempt to bring Medicaid expansion to a supposedly conservative state, the governor is looking to impose the financial burden not on Utah taxpayers generally, but on the health care industry specifically. While the idea sounds good in theory, in practice it would be much worse.
How would this be done? According to the governor, the proposal would require hospitals, doctors and drug companies to pay the state’s share of Medicaid expansion. “That way we don’t have to raise taxes,” Herbert said. But is an assessment different than a tax, when both amount to a mandatory confiscation of money? According to Utah policy, Speaker Greg Hughes said that these assessments can be called either taxes or fees, as long as the money comes in to state coffers. These semantics are an attempt to sugarcoat some sour, tough-to-swallow medicine.
Here’s why this plan is worse: the health-oriented businesses forced to pay such assessments are not going to absorb them. The costs will be passed on to the consumer — sick and suffering Utahns. And instead of paying a slightly higher amount of taxes, with the cost of Medicaid expansion socialized across the entire state, patients will bear a significantly higher proportion of the burden.
This idea becomes particularly pernicious when you consider doctors who choose not to see Medicaid patients, or the patients who don’t participate in this government program. Utahns already facing astronomically high medical costs will also be required to foot the bill for these “special health care assessments,” simply because they are sick. The latest instance of “Healthy Utah” might therefore exempt healthy Utahns — those who ostensibly could afford the assessment.
Proponents of this plan contend that it would hold the state financially harmless, but this is a misguided understanding of what the state actually is. Much like health care assessments would be passed on to the end consumers using health care services, the state’s costs are borne by those governed by it. Either way, a group of people has to pay for it. Given the governor’s burning desire to bring this expansive entitlement program to Utah, the operative question is: which group should be taxed (or “assessed”)?
Health care assessments — a sick tax, really — would be little more than concentrated socialism, dispersing the high costs of Medicaid expansion across a subset of the Utah population, rather than all of it. And like many government fees, it would effectively be a hidden tax that circumvents transparency. With an actual tax increase, there are procedural mechanisms in place to ensure oversight and public awareness of what each person is paying, and why. With assessments passed on to sick consumers, all they will see is their medical bills rise, without the ability to draw a correlation between their depleting bank account and the Medicaid expansion that helped to empty it.
Defending this proposal, the governor argued that it actually follows a user fee model. “The theory,” he said, “is the ones who benefit should be the ones who pay for it.” User fees for government services are a great idea — but one that the governor doesn’t support for UTA, where riders pay only between 5 and 15 percent of the full cost of their transport, or public education, where those who benefit pay even less. Color me skeptical, but it’s unlikely the governor really believes in this theory, otherwise we’d see it applied elsewhere.
And isn’t the whole idea of Medicaid expansion to provide free health care for those who allegedly can’t afford it? How does it make sense, then, for “the ones who benefit [to] be the ones who pay for it”? It doesn’t — and so Utahns who can afford to pay for their health care will bear an increased, disproportionate burden. Costs will rise, as will monthly insurance rates; the “assessments” will likely cause even more people to drop their health insurance plans, exacerbating the very situation Medicaid expansion is supposedly aimed to solve.
This latest proposal to expand Medicaid in Utah reeks of political desperation, rather than wise public policy. If the governor wants to expand a socialist program, then it should be done by dispersing costs equitably and broadly, rather than unfairly concentrating the financial impact within a small group already facing inflated medical bills. Sick Utahns with feeble knees and hands hanging down don’t need a new tax burden on their backs.
Connor Boyack is president of Libertas Institute.
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