April 7, 2020

Fixing Non-existent Problems

By Stephen Tuttle | May 12, 2018

Both Congress and the Michigan Legislature hope to enact laws they claim will place new work requirements on Medicaid and food stamp recipients. The rhetoric surrounding these efforts certainly implies we've got ourselves plenty of deadbeats out there receiving benefits to which they might not be entitled.

Michigan Attorney General Bill Schuette is currently the spokesperson touting the Michigan legislation, in a commercial, incidentally, that serves nicely as a campaign spot for the gubernatorial candidate though it technically isn't one. 

The Kaiser Family Foundation analyzes data from the U. S. Census Bureau and the Department of Labor to determine who's receiving what and into what demographic groups they fit. 

It turns out there aren't nearly as many moochers as we're being led to believe. Fully 80 percent of working-age non-disabled Medicaid recipients nationally work full or part time. More than half of them work for small businesses or companies that don't provide employee health insurance options.

Here in Michigan, the numbers are similar. 

More than 62 percent of Michigan's Medicaid recipient households have at least one person employed full-time and another 15 percent have one employed part-time. 

So what problem are we trying to solve, and just who will it impact?

Michigan has nearly 2.4 million Medicaid recipients. Of those, 400,000 are disabled, and another 1.3 million are non-working-age children. Of the remaining 700,000, 77 percent already work full or part time. 

That means our legislature's valiant efforts to make sure taxpayers are protected from the scourge of deadbeats taking advantage of Medicaid will, at most, impact about 7 percent of those recipients. Nationally the figure jumps to 9 percent.  

The figures aren't a lot different for those eligible for some version of the Supplemental Nutrition Assistance program (SNAP), commonly called food stamps. More than 70 percent of recipient households with at least one child have at least one adult who works full or part time. And only 6 percent of SNAP recipients receive any other kind of government assistance. 

It's an election year, and perhaps Medicaid and food stamp recipients are going to be the new villains, the ubiquitous “them” both sides like to exploit. The new Republicans, many trying to out-Trump the president, are always looking for a new group to demonize and blame. Democrats like to find new victims they can pretend to help. It's an unholy symbiotic relationship. 

Going after a tiny fraction of the Medicaid recipients who themselves make up a small subset of the general population isn't likely to help solve any problem. If one even exists.

Meanwhile, we have a bona fide financial miracle in Grand Traverse County. One assumes reporters from Forbes and Business Week will soon be streaming in to write their stories on The Great Turnaround. 

It seems like just a couple years ago, because it was just a couple years ago, we were being told of a financial catastrophe at the county. It was a two-headed monster of operational deficits and pension-funding shortfalls.

We were told, ad nauseum, the county's next budget was $4.1 million in the red, and drastic steps needed to be taken. Employees had to significantly increase their contributions to their health insurance plans, or there would have be layoffs. There was no money for raises. Entire departments were eliminated or consolidated. We were even told at one point the county could be in danger of needing an emergency manager to take over, like in Detroit and Benton Harbor. (The state denied any such thing was possible.) 

The pension fund was in even worse shape, falling $40 or $50 or $60 million behind, depending on who was talking and what day it was. We were told previous county leaders hadn't made payments and, oh my, something big had to happen to prevent something terrible from happening. 

Fast-forward to today, and the county has a significant positive balance in its general fund, operations are within budget, and various other funds also have surpluses. The changes made can only account for a tiny fraction of that turnaround. 

Either there was an accounting boo-boo of some significance or leadership didn't know what it was doing. A more cynical view is it was all just a ruse to bludgeon employees into taking less than they deserved while forcing them to pay more than they could afford. Whatever, it was a crisis that wasn't.  

The pension payments are being made, and it is now up to 58 percent funded. That's not glorious, but it is only two percent shy of what the Municipal Employees' Retirement System (MERS) considers minimally acceptable, a goal that should be reached shortly.

The pension fund needs further stabilization, but the financial dark clouds looming not that long ago have cleared up nicely. Or maybe it was the information we were given that was cloudy. 







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