Welfare or higher education question
One of Louisiana’s largest newspapers recently opined that the Edwards Administrations decision to expand Medicaid under Obamacare to 326,000 Louisiana residents, mostly adults working in low-wage jobs, “appears to be a success — and that the good that has so far been achieved far outweighs the costs.” The key words here are “ adults working” and “so far,” and I think giving a helping hand to those working hard to make ends meet is a good thing if you can afford it. However, after only four months into the expansion there are dark clouds on the horizon.
First, Obamacare is imploding before our very eyes and the promises that we could keep our doctors and that our premiums would decrease $2,500 have long vanished. Several major health insurance companies have recently stopped offering Obamacare because of massive losses. What other promises will the federal government renege on?
Second, Medicaid is a broken system and is bankrupting many state budgets — including Louisiana’s. A recent article in the WSJ titled “Cities, States Retrench on Construction Spending” as a result of declining revenues and increasing costs for Medicaid and public-employee pension obligations — leaving states with little choice but to “trim investments in infrastructure and higher education, areas which generate economic growth going forward.” Cutting back on these critical investments starts an economic death spiral as industries no longer want to expand, and new industries do not want to relocate here. Louisiana now has a $13 billion backlog on needed transportation projects, and budget cuts have university and hospital presidents screaming for help.
Lastly, when you drill down into Louisiana Medicaid you see that approximately 33 percent of the state’s residents are now on Medicaid — which is on track to consume over 50 percent of the state budget in the near future. Alarming is the fact that a significant portion of this 33 percent qualify as “poor” because they have chosen not to work; going to work would result in them losing too much government welfare benefits. The Bible ( 2 Thessalonians 3:6-12) states “some among you are idle — we gave you this rule: if a man will not work, he shall not eat — we command and urge in the Lord Jesus Christ, to settle down and earn the bread they eat.”
Louisiana will soon have a choice to make; either demand Washington to fix Welfare including Medicaid, or — stop investing altogether in higher education and infrastructure.
Steve Gardes, CPA