Friday, July 12, 2013

Why do conservative small business owners support Medicaid expansion/reform?

I just watched a short video featuring Rob Fowler, President & CEO of the Small Business Association of Michigan asking us to urge our State Senators to pass Medicaid reform now.


Fowler described House Bill 4714, the "Social Welfare Act", as “conservative, sensible Medicaid reform”. None of these words were chosen without a great deal of hand wringing and head shaking.

It was Confucius who said, “The beginning of wisdom is to call things by their proper names.”

Expansion or Reform?

Why do we call it “Medicaid expansion” while they call it “Medicaid reform”?

They do this because it is almost impossible for politicians who daily recite their dogmatic pledge to reduce the scope of government programs like Medicaid to admit that they personally benefit from expanding Medicaid.

Reforming Medicaid almost sounds like reducing it.


Why do they think it is “sensible” to expand Medicaid? They expect it to reduce the state budget by $200 million annually and to reduce their personal and business tax liability.


And yes, this is a “conservative” bill, but I will set that aside for the moment.


Fowler said that the expansion reform would “increase personal responsibility”. Visuals in the video suggested that this would be accomplished by “co-pays and incentives”.

The “co-pays” mentioned are for enrollees who earn between 100% and 133% of federal poverty and range from 2% to 5% of annual earnings. The “incentives” are behavior modifications that are called for to be eligible for enrollment, to remain enrolled or to qualify for reduced co-pays.

In other words, the same government that should intrude less on the personal matters of middle and upper income small business owners is called upon to intrude more upon the personal matters of their underpaid employees.

Another way of looking at this is to say that underpaid employees are being called upon to be personally responsible by paying more for the healthcare they receive and modifying their behavior, but the their employers are not being called upon to be personally responsible to pay more for the labor they receive from their employees or modify their employment practices so that employees are better able to be healthier or afford healthcare.

Cost Shifting

Fowler goes on, “while holding down healthcare costs for Michigan taxpayers and businesses. The visual informs us that Medicaid expansion reform will “reduce cost shifting”.

The cost of providing healthcare is incurred as labor, materials and technology employed in the delivery of the service. Surely the cost of delivering healthcare will not go down?

The question is always, “Who will pay the price?”

Rephrased, “How much will it cost Michigan taxpayers?”

And more importantly, “How much will it cost small business owners?”

Michigan taxpayers are not paying for these services now and will not pay for these services if Medicaid is expanded reformed. Michigan’s small business owners are not paying for these services now and will not pay for these services if Medicaid is expanded reformed.

It is ironic, but not surprising, that Medicaid expansion reform will NOT reduce the cost of delivering healthcare services or the price paid by Michigan taxpayers and small business owners, instead it will “shift” the cost.

Avoiding Federal Tax Penalties

So how will Michigan’s small business owners benefit from Medicaid expansion reform? The answer was in one of the visuals, “Avoids federal tax penalties.”

The Affordable Care Act penalizes employers for failing to provide healthcare coverage to low income families (those earning less that 133% of federal poverty level) who do NOT have access to Medicaid. Providing these families with access to Medicaid helps small business owners “avoid federal tax penalties”.

It is just like Emperor Palpatine said in Return of the Jedi, “Fool … only now, at the end, do you understand.”


Earlier I stated that Medicaid expansion (by any name and in any form) is conservative; now I will defend that statement.

Not all small business owners are conservative, but those who are have an agenda that goes beyond merely avoiding their social responsibility to pay taxes while also avoiding their moral responsibility to pay a fair price for the labor they receive from those they employ.

To be conservative is to defend a class system where some are owners and others are their servants. The Latin root for both words is serv us ). From their perspective, we are nothing more than serfs, another word related to serv us ). They, as conservative small business owners, imagine that they have a morally justifiable right to own the means of production and exchange and to benefit from the labor of their servants without distributing to them a fair share of the revenue derived from the labor.

Ironically, having deprived their servants of fair pay, they also feel no particular duty to pay for the physical infrastructure or social services that make it possible for them to be small business owners, such as the roads they use for business or the education system that provides them with skilled workers.

Like all other social welfare programs, Medicaid exists for the benefit of the ownership class. Without these social welfare programs, the owners would have to pay fair prices for labor or the laborers would revolt.


The progressive position is healthcare for all; everyone in and no one out!

Social progressives recognize healthcare as a fundamental human right and recognize it as a collective duty to ensure that everyone who experiences illness or injury receives the healthcare they need.

We don’t care that some people suffer illness or injury as a natural consequence of their own behavior. We recognize that some people will contribute more to pay for healthcare of others and some will pay less. We don’t care that a few will pay little of nothing or that a small percentage of people will incur most of the expense.

Conservatives regard Medicaid expansion as a progressive position and those who are calling for Medicaid expansion as uncompromising. I am a progressive and I regard Medicaid expansion as a conservative position and my support for it is a compromise.

Human Dignity

Medicaid is a program that robs human beings of their dignity and makes them beggars. Medicaid expansion simply expands the number of people who must be beggars from the very poorest who are often unemployed and sometimes unemployable to include those who are very much employed and very employable but whose hard work is so poorly compensated that they can be described as living in poverty or on the edge of poverty.

Insurance or Welfare?

I wish I was able to stop here, but Fowler final statement needs just a bit more analysis. He informs us that Medicaid expansion reform will “provide health insurance to thousands of low income Michigan workers”. The visual indicates, “Health coverage for 450,000 uninsured workers”.

Insurance is “coverage by contract in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract” in exchange for the payment of regular premiums.

Medicaid is not insurance, it is welfare; it is “financial or other assistance to an individual or family from a city, state or national government”.

The Affordable Care Act does two things that are frequently mislabeled. The first thing it does is subsidize the payment of insurance premiums to private, for-profit, insurance companies. The second thing it does is expand financial assistance for low income individuals and families in need of medical care. The first pays the subsidy to the insurance company boosting their sales and profits and the second pays the subsidy to the healthcare providers boosting their profits.

But Medicaid does not pay the subsidy directly to the healthcare provider; payment is made through a payment processor who is an insurance company. Medicaid has been successfully privatized; it is a public service, at public expense, for private profit.

Soothing Words

Calling Medicaid insurance instead of welfare makes it more socially acceptable. This is important both from the perspective of progressives who are concerned about the dignity of those who enroll in Medicaid and from the perspective of the crony-capitalists who profit from it.

It’s Time to Finish the Job!

Fowler called upon us to urge our State Senators to pass Medicaid reform now, telling us, “It's time to finish the job.”

I’m sure he did not mean it, but it is time to finish the job, it is time to recognize that healthcare is a human right that must be paid for from the general fund by those who are in the best position to do so.  And programs like Medicaid and Obamacare are little more than subsidies for insurance companies, healthcare providers and business owners that occasionally benefits the low income workers at the expense of their dignity.

Yes, it is time to finish the job, it is time to provide healthcare to everyone at no private expense to anyone; it is time to dismantle the for-profit insurance companies and pay for healthcare directly from general taxes. Nobody should earn a profit from the illness or injury of another human being, everybody should help pay for the tragedy of human illness or injury.

Yes, expand Medicaid now! But, don’t imagine that the job is finished.