Medicaid Cuts Show America’s Obamacare Future

Time for another Never Bark at the Big Dog moment. As I explained in my book Remaking America: Welcome to the Dark Side of the Welfare State, once the welfare state grows to a certain point – about 40 percent of a country’s GDP – the welfare state will become such a burden on the private sector that government cannot, however hard it tries, fund the welfare state anymore. At this point, government stops expanding services and start cutting them instead. This sounds good, but the spending cuts are not coupled with tax cuts. Government will give you less and less for the same, or even higher, taxes. Politicians and government bureaucrats will motivate the spending cuts as efforts to save the welfare state. Therefore, they will keep the spending programs in place, keep the taxes that pay for them, and maintain all regulations that protect the government programs from private competition. Once this becomes the regular MO for our federal, state and local governments, we have crossed over and entered the dark side of the welfare state. The dark side of the welfare state is the beginning of the end of our nation as a first-rate, supremely prosperous economy. What awaits us down the road of the dark side is nothing but industrial poverty. Europe is already there, and this story from the USA Today is chilling evidence that we are frighteningly close to following them:

A growing number of states are sharply limiting hospital stays under Medicaid to as few as 10 days a year to control rising costs of the health insurance program for the poor and disabled. Advocates for the needy and hospital executives say the moves will restrict access to care, force hospitals to absorb more costs and lead to higher charges for privately insured patients. States defend the actions as a way to balance budgets hammered by the economic downturn and the end of billions of dollars in federal stimulus funds this summer that had helped prop up Medicaid, financed jointly by states and the federal government. Arizona, which last year stopped covering certain transplants for several months, plans to limit adult Medicaid recipients to 25 days of hospital coverage a year, starting as soon as the end of October. Hawaii plans to cut Medicaid coverage to 10 days a year in April, the fewest of any state.

For all those who want a single-payer, entirely government-run health care system in America, this story probably will not make a difference. But the fence sitters who still have not made up their mind want to think carefully about it. They also might want to consider the fact that…

Private health insurers generally don’t limit hospital coverage, according to America’s Health Insurance Plans, a trade group.

These Medicaid benefits cuts are just a scratching on the surface of what is going to come under Obamacare and its public option. As I explained in my book, the cuts to a government-run health care system never stops. Sweden has one of the most anorectic health care systems in the industrialized world, and the cuts just keep coming.

The evidence against  putting our health needs in the hands of government are absolutely overwhelming. America can still avoid repeating the devastating mistake of socialized health care. But time is running out. Once Obamacare is up and running, there will effectively be no way back.