Political Popularity And The Problem With Reforming Entitlements

While most of Illinois has been distracted by the inauguration of President Obama, soon we will be fixated on another political drama – the impeachment trial of Governor Rod Blagojevich. It is worth noting that our scandal-tainted Governor was once very popular here in the State and lest we Republicans forget, he beat us in 2002 and again in 2006. One of his most popular programs and a winning campaign theme for him back when he was running for office was that he would provide medical coverage to all children in Illinois. The Governor kept his promise, expanding on the traditional Medicaid program by creating something called “All Kids.” I happen to be intimately familiar with this program since I just enrolled my family after losing my job. But I’m not some struggling working class Dad, whose wife works and yet still worries about making the next mortgage payment and/or how the family will afford medical coverage for the kids. Instead, I’m solidly middle-class, my wife is a stay-at-home mom, and we have a fair amount of assets – not enough to make us rich, but certainly enough to survive for a few months until I find a new job. But my assets, including my cash savings, have nothing to do with eligibility for “All Kids.” All I need to do is prove to the State I have no income and my kids are covered and even better, my wife and I are covered. And the co-payments are extremely low -- $2 per office visit. If I had to buy insurance through COBRA, I’d be out almost $1,000 a month to cover my family. Now I can certainly use that $1,000 and given my uncertain future, I’m not going to turn down the Governor’s generous program on principle, but there is something very wrong with our whole health insurance system and especially entitlements like Medicare and Medicaid when these programs aren’t means-testing based on assets and instead, politicians like Blagojevich are figuring out how to expand existing coverage for more and more voters (in fiscal year 2007, Medicaid accounted for just over one-fifth of the entire State of Illinois budget).