Star Parker

A classic explanation for why free markets produce prosperity and socialism does not is that individuals benefit in government run markets by taking from someone else. In free markets, individuals benefit as result of serving others, making everyone better off.

Medicaid violates basic management principles.

One, there is no clear institutional responsibility. It has grown through funding from both state and the federal government. Anyone who has ever run an organization knows that absence of clear responsibility produces bad results.

Medicaid spending has grown from .5 percent of GDP in 1970 to 2.7 percent of GDP in 2010 and according to Medicaid’s chief actuary, “From program inception, the cost of Medicaid has generally increased at a significantly faster pace than the U.S. economy.”

And there is no individual responsibility. Medicaid is a pure welfare program. Participants have 100 percent of their costs covered by the government. And once you have qualified, there is no time limit. There are no incentives to behave and spend efficiently.

The only direction of Medicaid is to spend more and more money less and less well.

Delivering health care to low income Americans is a real challenge. But to keep America great, we need to behave intelligently as well as compassionately. If we are going to subsidize health care for the poor, it should be through some kind of voucher to buy insurance. Not through welfare.

Meanwhile, the evil geniuses in Washington have devised a way to get even Republican governors to buy into a welfare program they know can only hurt our nation.

Star Parker

Star Parker is founder and president of CURE, the Center for Urban Renewal and Education, a 501c3 think tank which explores and promotes market based public policy to fight poverty, as well as author of the newly revised Uncle Sam's Plantation: How Big Government Enslaves America's Poor and What We Can do About It.