People across the United States should consider Rhode Island as a canary in the ObamaCare coal mine, whistling the tune of the President’s larger public welfare project.
When he spoke on the first night of the Democratic National Convention, RI’s Lincoln Chafee introduced himself as “the nation’s only independent governor.” That’s “independent” as in belonging to no political party. He went on to claim the mantel of “moderate” and to upend the dictionary with a new, inverted definition of “traditional conservative,” applying that label to himself, as well.
Actual moderates and conservatives should be wary of Chafee’s brand of independence. The most stunning reason is his state’s status, in July, as one of only three to have lost employment since the end of the U.S. jobs free fall in February 2010.
A more subtle, but profound, reason is the vision of health benefit exchanges toward which he is hurrying his state. The RI Center for Freedom & Prosperity, a free-market think tank, has derisively dubbed the concept a “dependency portal,” linking all public subsidies, handouts, and services together.
Chafee was the first of only three governors to establish an exchange under the federal Patient Protection and Affordable Care Act (PPACA; aka ObamaCare) by executive order, rather than allowing legislators to work out their differences about its scope and powers. Having created it, a truly non-partisan, fiscally responsible leader might have appointed at least one person to the executive committee who would be a voice of skepticism about bureaucratic benevolence. Instead, beyond subject-matter experts and health-industry interests, Chafee’s board includes advocates for government expansion.
One of the twelve seats went to the Economic Progress Institute, formerly the Poverty Institute, which is a public-service advocacy group affiliated with the Rhode Island College School of Social Work. Another represented organization is Progreso Latino, which advocates generally progressive policies on behalf of Hispanic/Latino Rhode Islanders, one-eighth of the state’s population. And of course, the labor unions get their say, via United Food and Commercial Workers International.
To residents of other states, however, the intended future of Rhode Island’s exchange is of more concern than its immoderate inception. At a press conference that they called to celebrate the Supreme Court’s validation of PPACA, the project’s three top bureaucrats described a “unified infrastructure” for “one-stop shopping” to be implemented during the next presidential term.
Details have been conspicuously vague, but the statements of local officials as well as the policy “toolkits” of national advocates convey the essential idea. People would turn to the health benefits exchange when they are unemployed or their employers determine that it’s more cost effective to pay penalties than to provide coverage. Even workers with insurance will have incentive to seek subsidies through the exchange if their household income is below 400% of the poverty level ($92,200 for a family of four).
The exchange user will provide private, personal medical, income, and family information, and the system will go beyond health care and check all state and federal cash and subsidy programs for eligibility. Some versions of the idea wouldn’t simply alert people of their eligibility, but would actually require them to opt out of handouts that they do not want. When fully implemented, the portal would potentially adjust benefit levels up and down automatically, as people update their information on a regular basis.
Genuinely moderate voters may see this technology as a matter of efficiency. Ted Nesi, a local journalist who is reliably non-ideological, went so far as to suggest that not implementing such a process would be tantamount to “praying for public ignorance” as a cost-saving measure.
But arguments from efficiency miss the distinction between a safety net and a web of entitlements. In the first case, Americans intentionally turn to government when they need help; in the second, they find themselves receiving gifts packaged as birthrights bestowed by elected officials.
The Obama administration provided an excellent lens for this distinction, recently, when it softened federal welfare-to-work requirements. The Department of Health and Human Services announced that it would issue waivers of the 1996 reform for states wishing to experiment with new programs. In practical terms, local governments need only predict that some change or other would lead more recipients to exit welfare in order to work; if reality falls short, they’d propose adjustments.
Under political pressure, HHS Secretary Kathleen Sebelius said that only states that “commit that their proposals will move at least 20 percent more people from welfare to work compared to the state’s prior performance” could apply. Robert Rector of the Heritage Foundation has pointed out that the surest way to increase welfare exits is to increase welfare entry.
With a dependency portal, such metrics would become utterly meaningless. The number of people entering into the system would skyrocket as utilization moved toward 100 percent of the technically eligible population. Moreover, the new recipients would be precisely those who are most likely to be predisposed to finding work in the first place. People who didn’t need or ask for money would cloak those who aren’t asking for work.
A net that weaves together health insurance with the full menu of public services cannot be anchored in progressive philosophy on one end and fiscal prudence on the other. Efficiency ceases to be responsible budgeting when it means being better able to hand out public dollars.
Regardless of political labels, what Governor Lincoln Chafee is implementing in his state is a fundamental change in the relationship between the government and the people whom it ostensibly represents. Rhode Islanders will have to determine whether they wish to volunteer for the nation’s laboratory on this, as they already have for experiments in economic decline and employment loss. Americans should at least learn from our radical haste and disastrous results.