Medicaid waiver an opportunity to help income inequality

This week’s Courier Herald column:

If you want the right answers, it’s best to make sure you have asked the right questions.

Presidential primaries have a tendency to set the tone on policy debates, as much as we have debates on actual policy anymore.  It is through this lens we have accepted as a current policy debate the subject of ending “income inequality” with leading candidates lining up with initiatives that would transfer trillions in wealth via higher taxes and new entitlement programs.

Rather than criticizing the proposed solutions, let’s start with a basic premise.  If the goal is to lift up those who have the least, then we can have the basis for a proper public policy debate.  For the sake of this column we’ll sidestep much of the rhetoric that appears more interested in punishing those with wealth or trying to determine when someone has “enough”.

For possibilities that fit within the realm of actual political solutions, let’s also eliminate the purists’ extreme positions that the government should provide nothing or everything.  Tens of billions of state and local tax dollars annually to public education and billions more for Medicaid say that the electorate has established a vested interest in government addressing these problems, before even addressing more comprehensive federally funded welfare programs.  The state constitution’s limits on property and income taxes also signal that there are limits to what the government can pay for.

Asking how and when the government should be involved is a respectable place to start.  For the question of how to address income inequality, some metrics of success should – and could – be agreed upon. 

Rather than starting with brand new programs, we can and should look at the programs we currently have and assess what is working and what is not.  We can’t deny that we’ve spent trillions on programs designed to alleviate poverty while the biggest champions of those programs declare the problems are getting worse.

Let’s start with a presumption and work outward.  Means testing – the process of setting income limits of those who can receive benefits – is trapping too many Georgians in poverty because the cost in earning incremental income above program limits is significantly less than their cost of replacing the benefits they simultaneously lose.

Dr. Alexander Ruder of the Federal Reserve Bank of Atlanta testified on this “benefits cliff” during recent state budget hearings.  Speaking on workforce development, he noted that we are having difficulty moving entry level employees up a career ladder because many can’t afford to take a pay raise.

He has agreement from “both sides” that this is an actual problem. Both the right leaning Georgia Center for Opportunity and the left leaning Georgia Budget and Policy Institute have written extensively on benefits cliffs. 

Georgia became a national leader on criminal justice reform because the right and the left were willing to put down their partisan talking points and address some fundamental and basic problems that were incarcerating non-violent citizens and permanently inhibiting their contributions to society well after their public debt had been paid. 

The same potential for bipartisan cooperation exists at the state level by addressing the known problem of benefits cliffs, starting with Georgia’s Medicaid program.  Georgia is currently in the process of designing a waiver in conjunction with expanding the Medicaid program. 

Bipartisanship will mean that some Republicans will need to accept that with 36 states plus DC having expanded Medicaid, it’s an entitlement program that won’t be cancelled.  Meanwhile, Democrats would serve the state well to drop the insistence that Medicaid expansion be exactly on the terms it was signed into law a decade ago.

There is a solution here that can please the majorities of both parties.  To get there, we need fewer shouting matches over bumper sticker slogans.  Instead, we need more discussion about how to make the dollars we are currently spending work to lift Georgians to higher income levels.


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