For Red States, Opting Out Is Not An Option

While the Obama White House, Senate Majority Leader Harry Reid and Congressional Democrats debate among themselves whether the so-called "opt out" p

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While the Obama White House, Senate Majority Leader Harry Reid and Congressional Democrats debate among themselves whether the so-called "opt out" public health insurance option endorsed by Reid will be included in reform legislation, Minnesota Governor and GOP presidential wannabee Tim Pawlenty has already weighed in. Asked if he would "lead a charge" in his state to opt out, Pawlenty replied, "I think so because I don't like government run health care."

That's easy for him to say. As it turns out, Minnesota is the exception that proves the rule of red state socialism. An increasingly blue state with the 4th best health care system in the nation, the Land of 10,000 Lakes sends far more tax dollars to Washington than it receives in federal spending in return. But for Pawlenty's fellow Republican refuseniks, leaders of red states offering dismal health care and a beneficiaries of a one-way transfer of taxpayer funds from DC, opting out may not be an option.

In recent weeks, Texas secessionists and Georgia legislators have echoed Pawlenty's confused reading of the Tenth Amendment by endorsing a state veto over federal health reform mandates. But just in time for the debate over the merits of a state-by-state "opt out" of a national public health insurance option, the Commonwealth Fund has released its 2009 state health care scorecard. As in 2007, the data reveals the critical condition of red state health care. All of which could present Republican governors and legislatures with a dilemma: Will they refuse to offer lower cost insurance coverage for their residents by rejecting a system funded in part by blue state taxpayers?

Given the contentious ongoing debate in the Senate, crystal ball-gazing for any public option, whether national, opt-in or opt-out is difficult. But the Commonwealth Fund's analysis of health care indicators shows the stakes for its red state opponents. While nine of the top 10 performing states voted for Barack Obama in 2008, four of the bottom five (including Arkansas, Mississippi, Oklahoma and Louisiana) and 14 of the last 20 backed John McCain. (That at least is an improvement from the 2007 data, in which all 10 cellar dwellers had voted for George W. Bush three years earlier.)

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(Here is the Commonwealth Fund's 2009 state-by-state health care scorecard. Here are links to the executive summary, the full report and PDF and Powerpoint chart packs.)

While New York Senator Chuck Schumer reported earlier this month that the "opt out" notion was gaining interest from conservative Democrats like Ben Nelson (D-NE), Republicans were unmoved:

A spokesperson for Senate Minority Leader Mitch McConnell (R-Ky.) suggests to the Huffington Post that it's unlikely that any GOPers will come on board.

"While Republicans support health care reform, they don't support a new government plan," said Don Stewart, a McConnell spokesperson, when asked about the opt-out idea.

That opposition would present a double quandary for the Republican leadership in Congress and in the states. After all, their residents not only need health care reform most. As it turns out, the funding in part would come from blue state taxpayers.

As the Washington Post noted in May ("A Red State Booster Shot"):

Health-care reform may be overdue in a country with 45 million uninsured and soaring medical costs, but it will also represent a substantial wealth transfer from the North and the East to the South and the West. The Northeast and the Midwest have much higher rates of coverage than the rest of the country, led by Massachusetts, where all but 3 percent of residents are insured. The disproportionate share of uninsured is in the South and the West, the result of employment patterns, weak unions and stingy state governments. Texas leads the way, with a quarter of its population uninsured; it would be at the top even without its many illegal immigrants.

As it turns out, health care reform spending would be little different from the overall pattern of red state socialism. That is, red state residents disproportionately benefit from the steady one-way flow of tax dollars and earmarks spreading the wealth from Washington to their states.

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As the 2007 analysis (above) of 2005 federal spending per tax dollar received by state shows, the reddest states generally reaped the most green. Eight of the top 10 beneficiaries of federal largesse voted for John McCain for President. Unsurprisingly, all 10 states at the bottom of the list - those whose outflow of tax revenue is funding programs elsewhere in the country - all voted for Barack Obama in 2008. And as the Wall Street Journal documented in March and again in July, Republican states are reaping outsized benefits from the $787 billion Obama stimulus package they so fiercely opposed.

While not ideal, Paul Krugman, Howard Dean and Nate Silver among others have argued that the opt-out public option approach has the merit of creating economic, political and behavior pressure on Tim Pawlenty's fellow Republican governors to offer their residents the same access to lower cost insurance as their neighbors in Democratic-controlled states. Should the opt out scenario come to pass, Republicans leaders will have to decide:

Will they put blue state money where their red state mouths are?

Any American who cares about the quality, accessibility and cost of health care for all Americans should hope the answer is yes.

(This piece also appears at Perrspectives.)

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