Obamacare Threatens Free Clinics

in-line-for-obamacareObamacare’s most significant effect is an expansion in the number of people dependent on Medicaid, the joint state-federal welfare program for low-income people. Kaiser Health News points out that this expansion is threatening the existence of free clinics. Some clinics are signing up for Medicaid, while others are closing:

“We used to say ... ‘wouldn’t it be great if we no longer had uninsured and we could close our doors and go out of business,’” said Michelle Goldman, CEO at the Eastern Panhandle Care Clinic in Ranson, W.Va., which is one of the free clinics now also taking Medicaid. “But the truth is we like the work we do and enjoy helping this population and believe we still have a lot to offer them.”

While a few free health clinics have shut their doors in Arkansas and Washington, most expansion-state non-profit free clinics are reassessing their business strategies. Medicaid offers the potential to give their patients better access to specialists, diagnostic testing and hospital care, and that’s created a sense of unease for operators of the clinics that for decades have played a key role in the nation’s health-care safety net.

“These changes have caused some real disruption in the free clinic sector trying to anticipate what it means for patients who continue to need our services, and how we can sustain ourselves,” said Marty Hiller, senior consultant with Echo, a consulting firm that works with free clinics. “It’s been a tremendous upheaval.”

The nation’s loosely organized network of free clinics have come a long way since the 1970s when most were made up of volunteer doctors and nurses working a day or two a week in church basements. Today, about 1,200 free clinics serve about 6 million patients, according to the National Association of Free and Charitable Clinics. Their increasingly modern facilities look much like private medical offices that serve patients with insurance. They often use electronic medical records, pay administrative staffs and nurse practitioners, and run their own pharmacies.

Unlike the nation’s community health centers, which receive billions in federal funding and are a key part of the health law’s push to expand access to health care, free clinics have traditionally relied on private donations, and state and local assistance. Community health centers, which also treat poor patients, charge patients above the poverty level on a sliding fee scale and are paid a higher Medicaid fee than private physicians.

The assertion that Medicaid dependency increases patients’ access appears unfounded: Medicaid patients have terrible access to physicians. It does not appear that access to care has changed for these patients—at least in the short term. However, the change in cash flow means that the clinics are now more accountable to the federal government than private donors and local government. That will likely increase the bureaucratic burden and decrease quality of care in the long term.

Reflections on the YAL National Convention 2014


Photo credit to Gage Skidmore

Let the American youth never forget that they possess a noble inheritance, bought by the toils, and sufferings, and blood of their ancestors; and capable, if wisely improved, and faithfully guarded, of transmitting to their latest posterity all the substantial blessings of life, the peaceful enjoyment of liberty, property, religion, and independence.” —Justice Joseph Story

Last week, I had the pleasure of attending the Young Americans for Liberty (YAL) National Convention as an official representative of the Independent Institute, which served as a Silver Level Sponsor. Attendees came from all 50 states and from over 200 universities. This gathering brought together over 300 cream-of-the-crop student leaders and activists to George Mason University School of Law’s campus for four days of training and lectures.

As noted by YAL staffer Bonnie Kristian, “They are really into liberty. Some of them might even do something about it.” In all my interactions with these students throughout the entire conference, I can confirm this description is absolutely true. As I explained what the Independent Institute can offer them in academic resources and professional opportunities, droves of students eagerly signed up for our mailing list (although our offer of a free book raffle may also have played a role...), purchased books, and grabbed free swag.

The energy and enthusiasm was contagious, and the effects definitely rubbed off on the older speakers and guests. Prominent figures including constitutional attorney Bruce Fein, best-selling author Thomas Woods, libertarian evangelist Jeffrey Tucker, and former Congressman Ron Paul gave well-received speeches and intermingled freely with their many admirers. This was all but the tip of the iceberg. There was something for everyone at this convention. A small sampling of the topics covered over the course of four days included the latest controversies surrounding the NSA and Edward Snowden (whom the students overwhelmingly supported), defending free speech on campus, and exposing the evils of occupational licensing.

As varied as these issues are, the main theme was Liberty. The prospects of liberty triumphing and becoming mainstream are especially promising when the attitudes of Millennials are taken into account. Kristian and many other astute observers point out that:

Freedom is popular. A recent Reason-Rupe poll confirmed what we’ve seen at YAL for a while: Millennials are the most libertarian generation yet. Yes, libertarian, not liberal.

As the poll showed, two-thirds of young Americans (ages 18 to 29) think the government is wasteful and inefficient. Nearly as many (63%) understand that government regulations favor special interests, not the general public. Strong majorities favor cutting government spending, regulations, taxes, and overall size.

Millennials are also uniquely pro-liberty on social issues like marriage and the drug war, with a majority agreeing that the government shouldn’t dictate what we eat, smoke, or drink. They are also very suspicious of both major parties, with more than half identifying as political independents.

#YALcon14 trended on Twitter (see here for the top 20 tweets) as students, speakers, and sponsors alike highlighted the most exciting parts.

By the weekend’s end, when it was time to fly back to California, I felt honored to play my small part in supporting the next generation of youth activists. Speaker after speaker reminded these students that it is up them to fix what is wrong with this country today and with the right amount of principle and dedication, they have every means to pull it back from the abyss. Despite the immense challenges faced by Millennials, ranging from an increasingly regulatory environment to the out-of-control surveillance state forced upon them by a broken two-party system, a sense of optimism prevailed among the student attendees that were at the Convention.

Since YAL launched its inaugural Convention six years ago, the numbers each year have only grown bigger and bigger. Freedom is popular, and that is reflected among the increasingly diverse attendees who came to this Convention as well as other libertarian events I’ve attended. The future of liberty looks bright indeed as long as this crowd flourishes.


Disclosure: I was a YAL intern from Fall 2012 through Spring 2013 and worked closely with Bonnie Kristian on communications.

Medicaid’s Financing Merry-Go-Round

Medicaid, which provides health-related welfare benefits to low-income individuals, is jointly financed by the federal and state governments. Before Obamacare, the split was 50/50 for rich states, but low-income states got more dollars. This mechanism is called the Federal Medicaid Assistance Percentage (FMAP). So, if California spent $50 on Medicaid, the federal taxpayer would chip in $50. However, for West Virginia, the split is $28.65/$71.35. That is, for every hundred dollars spent on Medicaid, only $28.65 is spent by the state, and $71.35 comes from federal taxpayers. These dollars are not appropriated by Congress: They just roll out on auto-pilot, as calculated by the FMAP.

Just think of the perverse incentives this gives state politicians and bureaucrats. Every policy that lifts people out of poverty, and away from dependence on Medicaid, causes the state to lose federal funds. That is why so many right-thinking people want to change the federal financing of Medicaid into a block-grant program. Could the incentive be even worse? Of course! There is an “enhanced” FMAP for children. This eFMAP is up to 30 percentage points greater than the regular FMAP. California has to spend only $35 to draw $65 of federal funds, for a total of $100. For West Virginia, the figures are $20.05 and $79.95. Is it any wonder that advocates of Medicaid expansion tend to focus on health care “for the children”?

Hospitals, which lobby consistently for expanded Medicaid dependency, are part of the problem. They long ago figured out that if they lobbied states to tax them, more than enough money would flow back to the hospital. It works like this: The state taxes the hospital, the money recycles back to the hospital in Medicaid payments, and it picks up federal dollars on the way back. Hospitals are the only businesses that lobby for tax increases on themselves!


Orwellian Language: Peace Abroad; War at Home

WarIsPeaceGovernments often misuse language to build emotional and patriotic support for their policies. This Orwellian use of language is clearly evident in the way that US government policy uses the words “war” and “peace.”

Everyone is well aware of the US military invasions in Iraq and Afghanistan. Initiated during the Bush administration and continued through the administration of Nobel Peace Prize winner Obama, the US enlisted the assistance of other countries (but both invasions were mainly undertaken by the US military) to bomb those countries, occupy them with ground troops, and overthrow their governments. There was no declaration of war in either case. Those invasions of Iraq and Afghanistan, and the subsequent occupation by American troops, were called peacekeeping operations.

When we bomb other countries, invade them with our troops, and topple their governments, that is what we call peace.

Meanwhile, we refer to many of our domestic policies as wars. We have a war on drugs, a war on poverty, a war on terror, and lesser wars like the war on obesity, the war on smoking, and the war on coal. The list could go on.

In the post-Cold War era, everyone knows the US is the World’s policeman, or the World’s bully, depending on one’s point of view. But when we impose our preferences on people in other countries through the use of military force, we call that peace. In war, one side fights another, and linguistically, our peacekeeping missions are telling people that we are helping them out by destabilizing their governments and killing their countrymen.

At home, the language of war invokes images of a patriotic effort to fight an enemy, whether the enemy is poverty or obesity or coal, and invokes images of treason for those who dare to speak out against the nation’s efforts to fight its enemies. Offering support to the opposition in one of our wars is unpatriotic and treasonous.

By misusing language in this way, words lose precision in their meanings. When bombing people is peace and providing food to poor people is war, those words that are misused for their emotional connotations no longer refer to clear concepts. In both cases, the Orwellian language does serve a clear purpose. It builds support for the state, and facilitates its foreign and domestic policies.

“Creepy Uncle Sam” Obamacare Care-nival

To follow up on the superb “Creepy Uncle Sam” videos satirizing Obamacare (see here and here), the new “Something Creepy This Way Comes: Creepy Uncle Sam Obamacare Care-nival” has now gone viral on the Internet:

For the pivotal alternative to Obamacare, please see the Independent Institute’s widely acclaimed book: Priceless: Curing the Healthcare Crisis, by John C. Goodman

Classifying America: Government’s Power to Define Is the Power to Discriminate


In one of the most famous phrases uttered by a Supreme Court justice, Potter Stewart defended his ruling in an obscenity case (1964) by refusing to offer a clear definition. Instead, he stated:

I shall not today attempt further to define the kinds of material I understand to be [hard-core pornography]; and perhaps I could never succeed in intelligibly doing so. But I know it when I see it, and the motion picture involved in this case is not that.” (emphasis added)

Judges can make such decisions on a case by case basis. Legal concepts don’t lend themselves to strict classifications that can be ruled upon robotically by men and women in black robes.

The administrative apparatus of the U.S. government (federal, state and local) is another matter. Collectively, the bureaucracies of this sprawling Leviathan extract and expend over $6 trillion annually. (For a folksy way of explaining that sum to friends and family, see my essay “The Power of Numbers: Simplify! Simplify!”)


Gov. Brown Invokes Religion to Open the Border, but Path to Faith-based Schools Remains Closed

Classroom_150Earlier this week Gov. Jerry Brown was in Mexico City “urging politicians ... to ‘heed the religious call ... to welcome the stranger’ in addressing the [immigration] crisis,” according to the Sacramento Bee. Gov. Brown continued by saying:

These are children, and many of them have relatives that are in California and other parts of the United States who are working, contributing to the well-being of people in the United States...So given the principle of family values and family reconciliation, I want to give utmost consideration to what is in the best interest of those children, not what is in the best interest of politicians who might want to exploit this particular topic.

Gov. Brown should practice what he preaches about immigration and apply those lessons to the closed-border education policy that prevails in California.

Not a single private school parental choice program has ever been passed out of the California legislature precisely because the interests of politicians and their allies (most notably the state’s largest teachers union, the California Teachers Association) have been trumping those of children for decades.

If Gov. Brown is truly serious about heeding the religious call he should be advocating for one of the most innovative and equitable parental choice options around: educational savings accounts, or ESAs.


Another Federal Mandate—Or, How I Misspent My Summer Vacation

clock question mark_0In 1986, a 19-year-old Lehigh University student, Jeanne Clery, was raped and murdered in her campus residence hall. The reaction against colleges failing to publicize such campus crimes prompted the passage in 1990 of the Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act. The Clery Act requires all colleges and universities that—like my employer, Wake Forest University—participate in federal financial aid programs to keep and disclose information about crime on and near their campuses. The Department of Education can impose fines up to $35,000 per violation, on institutions for each infraction and can suspend institutions from participating in federal student financial aid programs. The intent of the law seems very laudable, but like so many other laws its implementation has taken on a life of its own—hungrily gobbling up resources in the process.

The law requires that all Campus Security Authorities be trained to know which crimes and safety issues must be reported—for example, should crimes on thoroughfares through campus be reported or just crimes on campus-owned property; should simple assaults be reported in addition to aggravated assaults? Again this seems reasonable, but it turns out that the definition of Campus Security Authority is very broad. It covers not only campus police, but also resident hall advisors, coaches, and even faculty members who advise clubs. I fall into this last category, so the official in charge of records management at my university emailed me (along with scores of others) notifying me of my responsibility to be trained as a CSA. Unfortunately, the training session mentioned in the email began at 8AM. Worse still, it was to take four hours. Fortunately, I couldn’t attend because of my teaching schedule and luckily there was online training available. Yesterday, I finally found the time to take the online training. All told, it took me about an hour and a half to watch the training videos and then take a 10-question multiple-choice test. I got all ten questions correct (pat on the back)! But I probably would have gotten about 8 correct even without the training—and 8 is enough to pass.


Gross Domestic Product: Is Health Spending Figured Out?

StethMoney_150Relying on a government agency to tell us the value of goods and services produced in our nation may not be the best way to estimate Gross Domestic Product. Nevertheless, it is widely accepted.

Health spending was a non-issue in the Department of Commerce’s release of the advanced estimate of second-quarter GDP, which came in at four percent (annualized). Much of the second quarter’s improvement was business spending and consumer spending on durable goods. Health spending increased by a muted 0.08 percent. The final estimate for first-quarter GDP was improved to minus 2.1 percent, up from minus 2.9 percent.

What is a relief is that the final estimate for health spending in the first quarter, minus 0.16 percent, was unchanged from the previous estimate. Previous estimates of first-quarter GDP were whipsawed by huge changes in the health estimate, and many were concerned that the Department of Commerce had no idea how to measure health spending under Obamacare. Yet more changes in the estimate were feared.

Advanced estimates of GDP are always subject to significant revision, but the previous uncertainty about health spending was unprecedented. If the Department of Commerce has figured out how to measure health spending in the new regime, at least that’s one Obamacare uncertainty that we can stop worrying about.

Technology Can Make the Regulatory State Obsolete

11040316_MThe late American inventor and futurist Buckminster Fuller said: “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” Ridesharing services are trying to do this, but governments stand in the way.

In a two-minute Perspective aired today on National Public Radio station KQED in San Francisco, former taxi driver Kieran Farr explains why overregulation is making it impossible for San Francisco taxis to compete successfully with ridesharing services such as Lyft, Sidecar, Tickengo, and Uber.

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Farr recommends that government agencies begin cutting taxi regulations and fees to allow cabs to compete; otherwise, taxis will continue to loose customers to app-driven alternatives.

Competition driven by new technology is making existing taxi regulations obsolete. But rather than abandon these regulations, governments are moving in the opposite direction to layer more regulations on ridesharing services (see here and here for examples). The clunkier and more expensive governments can make ridesharing, the more that governments protect the interests of taxi companies and their drivers.

The public should fight back to stop governments from killing ridesharing, because if they do, governments will be emboldened to target other technologies tomorrow that also threaten the regulatory state (Airbnb.com comes to mind). This fight is bigger than one over ridesharing services.

People should be allowed to define their own futures. Technology is empowering people to be in the driver’s seat, if only governments stop being backseat drivers commandeering the future with needless regulations.