Scott Walker's Stupid, Petulant Insurance Exchange Excuses

So now Scott Walker is Paul Gigot's go-to for the skinny on Republican governors and health care exchanges, it seems. And as usual, Governor Walker dishes out a large helping of bullsh*t with his excuses for why he declined to set up a

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[h/t The Marvelous Heather]

So now Scott Walker is Paul Gigot's go-to for the skinny on Republican governors and health care exchanges, it seems. And as usual, Governor Walker dishes out a large helping of bullsh*t with his excuses for why he declined to set up a state-based health insurance exchange for Wisconsinites and handed off his state options to the federal government.

The complete transcript is at the end of this post, but let me summarize the lame excuses he gave:

  • It requires standard benefit packages - Walker holds up Utah's insurance exchange as a shining example of how a state-based exchange should work. I went and had a look at Avenue H, Utah's current exchange. Here's how it works: Employers give their employees a lump sum for health insurance, and employees go out and shop on the exchange for it. There's no standardization to benefits packages whatsoever, and no minimum requirements for coverage. That leaves insurers with a big, wide open door to make sure their plans are tailored in such a way that employees receive the least coverage for the most money.

    Obamacare, on the other hand, requires that exchanges offer certain coverage packages which cover certain minimum things, like hospital stays and preventive health care. Further, the "defined contribution" approach on the part of employers is not part of the package, though small employers are permitted to shop for group insurance or individual policies on the exchanges. What cannot happen is that employees get stuck with the lion's share of the cost.

  • But the tenth amendment! Ok, I confess not to fully understand Walker's argument here. It seems that he's actually saying the federal government can run things better than states can, but surely those words would not be uttered from Scotty's mouth, right? Still, what he seems to be saying is that if federal regulations apply to insurers, the federal government can fund the regulators instead of the states.

    Alrighty then. That's good for those of us who understand that a national pool and a national administrative base is a good thing for single payer. It begins to build that infrastructure, and if they want to be big "poopyheads" about it, that's fine with me.

  • Federal subsidies can only flow through state-based exchanges? This appears to be the argument that some of the most radical Republican governors are making. They are relying on their interpretation of the actual language in the ACA and claiming that the federal subsidies can only flow through the state-based exchanges. I am not a lawyer and especially not a Republican lawyer, but I've read the law and I think they'd have a hard time arguing that federal subsidies could not flow through a federally organized exchange operating in these governors' states.

    Of all of the reasons I've heard, this one is the most petulant and stupid. If what they are saying is true, it could be repaired with a simple technical correction or by flowing the subsidies through the state-licensed insurers in those states. After all, it's technically set up as a federal tax credit which will be given to insurers in advance to subsidize individuals' health insurance.

    Stomping their little hooves and hanging their petulance on a loophole hook makes petty nasty governors look petty and nasty.

Finally, on the question of the Medicaid expansion, Walker appears cagy when he says the idea of 100 percent funding is tempting, but you know, that damnable fiscal cliff gets in the way. (It doesn't.) Reading between the lines, I see this as the real excuse for his foot-dragging on expanding Medicaid:

In light of the fiscal cliff and everything else out there, there's a very real possibility even with the next year or two that Medicaid funds to states might be reduced and without true flexibility through block grant, now we have a real tough time dealing with what we have today, let alone anyone.

Whisper with me now: Scotty Walker doesn't really want to cover those poor folks. He just wants the money for them so he can use it for other things, and keep kicking the poor in the teeth for every problem there is for as long as possible. Poor people, after all, shouldn't expect health care.

This is so stupid. The federal government is trying to REDUCE health costs by getting these people covered and in front of doctors before they are so sick the state bears a huge burden, but yeah, poor people. Can't stand the idea of poor folks getting a leg up when Scotty can't control the funds flowing through to them. Plus, fiscal cliff!

Now that I've debunked Scotty's stupid reasoning, let me share with you what my strongest reaction to this segment was. It was the closing:

GIGOT: It is going to be a big debate and we'll watch your decisions carefully.

To which I reply, WHY? Why will we watch Scotty's decisions carefully? Why on earth would we care what Scott Walker does? Because he's done so well managing Wisconsin? Shoot, every Wisconsinite on the planet should be overflowing with gratitude that Walker didn't see a way to profit personally or politically from state-based exchanges and the Medicaid expansion.

After all, he had no problem behaving like the corrupt, craven politician that he is, even when it meant conducting his political business on the state's dime.

But yeah, Fox News. You just keep watching Scott carefully while the rest of us watch Scott Walker face indictment for his own wrongdoing in Wisconsin.

Full transcript follows:

GIGOT: Welcome to The Journal Editorial Report. I'm Paul Gigot. With his second term now secure is President Obama's signature health care law a sure thing? From health insurance exchanges to a vast expansion of Medicaid, Obamacare is heavily dependent on state implementation and a growing number of the nation's thirty Republican governors are saying they won't do the federal government's bidding. Wisconsin's Scott Walker is one of them and he joins me now. Governor great to have you with us.

WALKER: Paul good to be with you.

GIGOT: So when you wrote to HHS secretary Kathleen Sebelius, you said you weren't going to set up next state exchange because you wouldn't have the flexibility to make it work. Why don't you elaborate on what you mean by lack of flexibility.

WALKER: Well for all the talk each of us as governors can comply with the law one of three ways, a state run exchange, a partnership, or deferring to the federal government, and for any of the folks who are lobbying me to have the state run exchange, they really realize that, they need to realize that in the end there is no real flexibility. In terms of final outcome there is no substantive difference between the three options. All of them lead to a federally run exchange that a one way or the other. A great example that is talking over the last few weeks of my friend Gary Herbert the governor of Utah...

GIGOT: Right.

WALKER: Utah, Paul, as you know and most of your viewers know, years ago, five or six years ago, they set up their own exchange. They did it in a free market way. They did it working with small businesses in the state. They have one of the lowest cost of any state in the country when it comes to health care. They still have quality health care, but they did it through a market driven exchange.

According to my friend Gary Herbert, that doesn't qualify under the the new Affordable Care Act, and so they're going to have to come back and put in place something that more aligns them with the what the federal government wants. To me, it's you get all the exposure without any of the flexibility. That's not a good deal. And on the behalf of the taxpayers of my state, I said no thank you. We'd rather have the federal government take on not only responsibility, but the responsibility for paying for it and not defer that to our tax payers.

GIGOT: Isn't there a risk though that if the federal government runs the entire show that you guys will be cut out totally and that basically they will, you'll have even less room for maneuvering your companies in the state, your providers in the state will really have to march entirely to Washington's dictates.

WALKER: Well there is and there's that risk but the reality is as we looked at this. In fact we started to look at it literally two years ago in December of the 2010 right after the election. I and a bunch of the other new governors of both parties went to the White House, went and met in the old executive office building with secretary Sebelius and others they talked about flexibility then.

The reality though is the flexibility was really limited mainly to things like how many staff from the state do you have? Do you have a handful like Utah or do you have hundreds like Massachusetts? In terms of the regulation of what has to be included, how it's covered in your state, those things are all seriously dictated through the federal government and and for all the talk about flexibility and it really doesn't happen. I've gotta' tell you though as a governor who believes that federalism, that believes in that the Tenth Amendment, instinctively, my gut when given the chance and anything is to have the state run it over the federal government.

But, you look at things like the food stamp program, food share, you look at things like special education, that's a mandate that for years has been mandated by the federal government the states in school districts in our country and it never comes close to covering the cost of that. I think most of us who said no and deferred to the federal government did so because we didn't want the cost incurred upon our tax payers.

GIGOT: As as the law's drafted I gather that the subsidies can only flow through state exchanges. That is the subsidies for individuals to have health care. Now if, so if the federal government delivers the exchange in your state and runs it, then at least as drafted, the subsidies will not be able to flow. Was that part of your calculation as well on this decision?

WALKER: No I think in the end there's a series of things, that being one of them. Some other things in terms of insurance regulation within a state beyond just an exchange itself, those are things that we, I think all of us governors, including some Democrats, who did the same thing we did and deferred to the federal government, we're gonna' come back to the Congress, work with members of both political parties.

I think those are reasonable adjustments, technical type adjustments, that the Congress should be able to make going forward, because as you know and again your viewers know, most of these decisions were made just a few years ago about this time of year, late in the game without any real input from governors, or for that matter, just about anybody else.

And these are the technical things that if you're gonna' have it, at least make it work I objected to it. I fought it in court I fought it politically. I lost those battles. I've conceded that. I've conceded that at least for the time being there will be exchanges in my state. They just won't be run by the state. But I think if you're gonna' make it work most people realize there has to be some technical adjustments.

GIGOT: Well, one of the things you did win on in the court case was Medicaid. So now states have the option of opting out of the Medicaid expansion. That is a big part of this bill. Have you made a decision on Medicaid yet? Are you going to opt in or out?

WALKER: I have not, but I gotta' tell you have much as I did about the original question, I have, as do governors of both parties, some real hesitations about the expansion. In our state, for example, Wisconsin already has over 90 percent of our people covered. Now we have one of the most extensive coverage systems in the country, and so that's part of the reason why we fought the bill the first place. And we already knew it pretty well, that there's a small number of people. Why blow the whole system for that?

But but having said that, our real concern is, it's a 100 percent reimbursement for this expansion for the first three years. Under the actual terms of the law itself, if you just read it, three years from now, it drops down to 90 percent. Any of us who have dealt with the federal government before on anything else and special ed was a good example I guess before, know that they come nowhere near those sorts of goals for several years after the legislation, and so I think many of us are concerned looking ahead to the future and saying are we going to add massive numbers of people on Medicaid, some in more states more than others? And ours would be a relatively minimal number compared to other states, but still, would we be adding people and not have the funding?

And that's assuming they comply with the law. In light of the fiscal cliff and everything else out there, there's a very real possibility even with the next year or two that Medicaid funds to states might be reduced and without true flexibility through block grant, now we have a real tough time dealing with what we have today, let alone anyone.

GIGOT: Now what's your estimate the number of people on Medicaid that you would have to add under the expansion? Do know that off the top of your head?

WALKER: Well it varies. That's one of the the challenges with this whole law and not just on the Medicaid expansion that but even in the terms of of the of the law itself and when we looked at the exchange. We thought the cost of just the exchange could go up go up to as much as $60 million dollars, plus the number that would be eligible, fluctuates depending on what we can do with the rest of our population. I think for a lot of governors that's also part of the concern.

If we had a concrete answer to this it might be easier to make those decisions. But we keep it sending questions to the administration, not just from Republican governors, but for the National Governors Association, and repeatedly, we get letters back that that really don't answer those questions and that's part of the problem.

GIGOT: Well Governor thanks so much being here. It is going to be a big debate and we'll watch your decisions carefully.

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