Thursday, February 5, 2009

“Medicaid for Millionaires” in the Democrat “Stimulus”

Among many other spending items in the House-passed Democrat “stimulus” bill (H.R. 1) are provisions that could result in unemployed millionaires receiving federal subsidies to purchase continuation coverage from their former employers—or free health insurance coverage through Medicaid:

  • H.R. 1 creates a new entitlement to Medicaid coverage—fully paid for by the federal government without any state share—to individuals (and their families) currently receiving unemployment compensation, or those individuals who exhausted their unemployment benefits after July 1, 2008.
  • However, H.R. 1 explicitly states that “no income or resources test shall be applied” to Medicaid beneficiaries who qualify based on their receipt of unemployment benefits—meaning that individuals with millions of dollars in assets or other income could receive free health insurance courtesy of federal taxpayers.
  • Similarly, the House “stimulus” bill creates a new 65% federal subsidy for individuals utilizing COBRA continuation health insurance coverage from their former employer—but contains no cap on eligibility for individuals with millions of dollars of income.
  • When H.R. 1 was considered by the House Energy and Commerce Committee, Rep. Cliff Stearns (R-FL) offered an amendment to limit the federal COBRA subsidy to individuals with incomes under $1 million.  While Chairman Waxman accepted this amendment during the markup—and Speaker Pelosi trumpeted its acceptance as a sign of House Democrats’ bipartisan outreach on the “stimulus”—it was one of three Republican amendments that were accepted during in Committee, but dumped from the legislation that came to the House floor for a vote without debate or explanation.
  • Similarly, Rep. Nathan Deal (R-GA) offered an amendment to limit the scope of the new Medicaid entitlement to those individuals making under $1 million—but Chairman Waxman rejected these overtures, stating that limiting the program to people with under $1 million in income would present an “unnecessary barrier” to enrollment and that “it is highly unlikely that you’re going to find millionaires who would like to go on Medicaid.”  He did not explain why wealthy individuals would not want to enroll in Medicaid—or why, if Chairman Waxman believes Medicaid is so unattractive for wealthy people, it is an acceptable form of health insurance for poorer Americans.

Some Members may believe that, particularly given our $52.7 trillion in current entitlement obligations, taxpayers should not be asked to pay for a new entitlement to health benefits for individuals with ample means to pay for their own insurance plans.  Moreover, some Members may question Democrats’ reluctance to modify these provisions in H.R. 1, and why Democrats are so insistent on expanding government-run health insurance to new populations that they would make available free benefits to some of the same fired executives they so recently blamed for causing our current economic crisis.