EDITORIAL : THE NEW YORK TIMES, USA

The Ryan Plan for Medicaid

With Washington looking for ways to rein in costly entitlement programs and state governments struggling to balance budgets, conservatives have revived an old nostrum: turning Medicaid into a block grant program.
The desire for fiscal relief is understandable. Medicaid insures low-income people and in these tough economic times, enrollment and costs — for the federal government and state governments — have swelled.
Representative Paul Ryan, and the House Republicans, are now proposing to ease Washington’s strain by capping federal contributions. Like his proposal for Medicare, that would only shift the burden — this time onto both state governments and beneficiaries.
Still, some governors may be tempted. His plan promises them greater flexibility to manage their programs — and achieve greater efficiency and save money. That may sound good, but the truth is, no foreseeable efficiencies will compensate for the big loss of federal contribution.
Mr. Ryan also wants to repeal the health care reform law and its requirement that states expand their Medicaid rolls starting in 2014. Once again Washington would pay the vast bulk of the added cost, so states would be turning down a very good deal to save a lesser amount of money.
Here’s how Medicaid currently works: Washington sets minimum requirements for who can enroll and what services must be covered, and pays half of the bill in the richest states and three-quarters of the bill in the poorest state. If people are poor enough to qualify and a medical service recommended by their doctors is covered, the state and federal governments will pick up the tab, with minimal co-payments by the beneficiaries. That is a big plus for enrollees’ health, and a healthy population is good for everyone. But the costs are undeniably high.
Enter the House Republicans’ budget proposal. Instead of a commitment to insure as many people as meet the criteria, it would substitute a set amount per state. Starting in 2013, the grant would probably equal what the state would have received anyway through federal matching funds, although that is not spelled out. After that, the block grant would rise each year only at the national rate of inflation, with adjustments for population growth.
There are several problems with that, starting with that inflation-pegged rate of growth, which could not possibly keep pace with the rising cost of medical care. The Congressional Budget Office estimates that federal payments would be 35 percent lower in 2022 than currently projected and 49 percent lower in 2030.
To make up the difference, states would probably have to cut payments to doctors, hospitals or nursing homes; curtail eligibility; reduce benefits; or increase their own payments for Medicaid. The problems do not end there. If a bad economy led to a sharp jump in unemployment, a state’s grant would remain the same. Nor would the block grant grow fast enough to accommodate expensive advances in medicine, rising demand for long-term care, or unexpected health care needs in the wake of epidemics or natural disasters. This would put an ever-tightening squeeze on states, forcing them to drop enrollees, cut services or pump up their own contributions.
This is not the way to go. The real problem is not Medicaid. Contrary to most perceptions, it is a relatively efficient program — with low administrative costs, a high reliance on managed care and much lower payments to providers than other public and private insurance.
The real problem is soaring medical costs. The Ryan plan does little to address that. The health care law, which Republicans have vowed to repeal, seeks to reform the entire system to deliver quality care at lower cost.
To encourage that process, President Obama recently proposed a simplified matching rate for Medicaid, which would reward states for efficiencies and automatically increase federal payments if a recession drives up enrollments and state costs. The president’s approach is better for low-income Americans and for state budgets as well.

Mr. Geithner’s Loophole

 

Until recently, the big threats to the Dodd-Frank financial reform law came from Republican lawmakers, who have vowed to derail it, and from banks and their lobbyists, who are determined to retain the status quo that enriched them so well in the years before, and since, the financial crisis. Now, the Obama Treasury Department has joined their ranks.
In an announcement on Friday afternoon — the time slot favored by officials eager to avoid scrutiny — the Treasury Department said it intends to exempt certain foreign exchange derivatives from key new regulations under the Dodd-Frank law. These derivatives represent a $4 trillion-a-day market, one that is very lucrative for the big banks that trade them.
A loophole in the law — which the bankers and their friends, including the administration, fought for — allows the Treasury secretary to exempt the instruments. The arguments in favor of exemption, beyond a desire to please the banks, were always unconvincing. They still are. The Treasury Department has asserted that the exempted market is not as risky as other derivatives markets, and therefore does not need full regulation.
That claim has been disputed by research, but even if it were true, it would be a weak argument. For instruments to be relatively safer than the derivatives that blew up in the crisis, necessitating huge bailouts, hardly makes them safe. Worse, dealers could probably find ways to manipulate the exempted transactions so as to hedge and speculate in ways that the law is intended to regulate.
The Treasury Department insists its exemption is narrow and regulators will have the power to detect unlawful manipulation. In their spare time, perhaps? The financial crisis made clear what happens when everyone doesn’t have to play by the same rules. And it made clear that the taxpayers are the ones who pay the price.
The department has also said that because the market works well today, new rules could actually increase instability. That is perhaps the worst argument of all. It validates the antiregulatory ethos that led to the crisis and still threatens to block reform.
The Treasury’s plan will be open for comment for 30 days. Count us opposed.

 

Some Sunshine for the Campaign Jungle

 

When the Supreme Court legalized a new era of unrestrained corporate campaign spending, the court made a point of upholding disclosure of donors as an alternative safeguard for voters and the democratic process.
President Obama should take the court up on its transparency blessing forthwith and sign a proposed executive order that would require government contractors to disclose their donations to groups that support or oppose federal candidates. If they win, those would-be legislators or policy deciders will be able to reward these contractors with millions or even billions in government largess. The taxpayers have a right and need to know what favors are being curried.
The court’s Citizens United decision inspired a $138 million binge of hidden donors in last year’s midterm elections. It was a mere down payment by political machines that will flood the 2012 campaign with anonymous cash from corporations, unions and nonprofit groups.
The U.S. Chamber of Commerce, an accomplished conduit for secret donors, is crying foul about the proposed executive order. But clearly the measure is needed to combat pay-to-play campaign abuses.
Democrats came close to passing a new disclosure law last year, but were stopped when Senate Republicans — who will benefit the most from stealth corporate donations — stood fast. The prospects with this Congress are, of course, far worse, and the checkbooks are already out.
Mr. Obama vowed to rein in campaign abuses. Now is not the time for him to flinch before noisy threats from the chamber and other deep-pocketed players.

 

Voice of the Derby Steps Down

 

In the theater world it’s called flop sweats. In thoroughbred racing, where Tom Durkin has been the signature voice of the Triple Crown for years, it was his fear of breaking down in the homestretch.
After valiantly struggling with nightmares of blowing the big call at the finish line, Mr. Durkin shocked the nation’s bettors and touts by bowing out as announcer of next Saturday’s Kentucky Derby.
“It’s a tough professional decision, but a great personal one,” a relieved Mr. Durkin told Joe Drape, the Times racetrack writer, in quitting the premier job as television’s Triple Crown announcer. He poignantly told of years of anxiety eating at him even as his voice soared wire to wire with the thundering fields at the Derby, Preakness and Belmont Stakes. All manner of therapy failed to stop his stage fright.
Derby day is when much of the nation enjoys the pretense of being deeply interested and knowledgeable about thoroughbred racing. Go into your local bar, and sample the authoritative chatter before post time. (“Ultraequus is going off at 5-to-2 and looks ready.”)
The day is rich with claims of sure things that fade in the homestretch. That’s the real sport of it. For the last 13 years, nothing quite beat the fun of having a drink in hand and craning toward the screen as Tom Durkin settled things with his rich baritone and quick, evocative narration: “They’re coming down to the finish! Can Smarty Jones hold on?! Here comes Birdstone!”
The new voice Saturday will be the veteran Larry Collmus. But Tom Durkin has already made Derby day special by retreating from it in plainly human terms. “Life is too short and precious,” was his parting call.