Should teachers support repeal of health care reform?

 Nebraska’s (Republican) Governor Dave Heineman is on the mark when he points out that costs of health care “crowd out” other important social needs. That’s the reason why it is so important to decrease the rate of medical inflation.

Here is his quote

"Increased funding for Medicaid is likely to result in less funding for education," Heineman says in the letter sent Wednesday to associations representing teachers, school boards and school administrators. "Don't sit on the sidelines," it says later. "I strongly urge you to support the repeal of the recently enacted federal health care law."

Is Heineman right that school committees in Nebraska should fear the health care reform act?

The Kaiser Family Foundation  has calculated how much each state will spend to comply with health care reform (largely Medicaid expansion), and how much new federal money will come into the state.  In the case of Nebraska, KFF projects that the state would spend $106 million from 2014-2019, the federal government will spend over $2.3 billion, or over 95% of the total new spending.  This $2.3 billion will lead to new jobs – and with a 6.84% income tax, the increased income tax alone would equal the cost of the state Medicaid outlays as long as 2/3 of the spending is on salaries. That’s not counting a “multiplier” effect where one person’s new income leads to increased incomes for everyone from whom she purchases goods or services, and it’s not considering state sales tax of 5.5%.

Across the country, most analysts believe health care reform will increase the cost of overall health care by a very modest amount.   The reform bill also includes some serious cost control, including cuts in payments to Medicare Advantage health plans, cuts to providers, funding for comparative effectiveness research, and a Medicare innovation center.  The answer to health care crowding out other important social services isn’t repealing health care reform, but building on it.   Teachers should not be on the picket lines pushing for repeal.