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When It's Medicaid, Protect the Work Horses, Not the Gift Horses

The rule of thumb about gift-horses and the idiocy of looking them in the mouth is overdue for reassessment. Say the federal government offers Texas billions of dollars, under ObamaCare—if the state will enroll more uninsured people in Medicaid. Sounds nice, until light breaks through the fog.

What if “free” turns out to be a whole lot less free than represented?  What if a federal government already weighed down by massive debts—the result of unrestrained spending during the past five years—decides, ooops … guess we can’t give you everything we said we would? And what if, meanwhile, a million or so uninsured Texans have signed up for the services the missing money was to cover?

The answer seems clear: Texas taxpayers will get the call to pick up the tab through higher taxes and cuts in other state programs, such as highways and public education.

So frightening is that prospect that we probably won’t actually confront it. However, not because anyone is depending on the federal government to stand by its sacred promises; rather, because most Texas lawmakers, along with Gov. Rick Perry, appear to understand how dumb and irresponsible it would be to operate on such an assumption.

From the look of things, Texas, like most Southern and Midwestern states, is set to reject the Obamacare bucks for Medicaid. Even states where governors had decided to participate in Medicaid expansion—Florida is an example—are pulling back, often because the state legislature won’t go along.

Many of the objecting states want to provide more sensible ways of making sure good health care is available to the poor. A bloc of Texas Republicans had hoped to work out a deal with the feds for a block grant, giving the state flexibility in spending Medicaid money. Their proposal had the effect, however, of locking in more public money for a program that already soaks up a fourth of the state budget.

Had Obamacare not been designed and crafted as a mammoth expansion of federal power,  Congress might have worked into its fabric some marketplace incentives offering recipients an array of choices in medical care of all kinds. It could, and should, happen soon. For now, when it comes to Obamacare, just one strategy seems feasible: protecting the work horses—taxpayers—rather than the gift horses.