Rob,

I fear that you, and a prior Center for Budget and Policy Priorities report your Justice Center colleagues have cited, may well have accidently committed a statistical error. Here?s what you said:

Most of the [Medicaid] growth was not a function of lawmaker largesse to people in need, but of the explosive growth in health care costs generally. As a matter of fact, Medicaid has actually done a better job of containing costs than private health care plans.

The specific claim in your report, attributed to the CBPP, is as follows:

From 2001 to 2002, the average per capita Medicaid cost for children and nonelderly adults rose at far lower rates (6.7% and 7.5%, respectively) than did per capita premiums for employer sponsored insurance and federal employee insurance (12.7% and 13.3%, respectively).

But this formulation entirely misses the point by using per-capita Medicaid costs. Defenders of the Medicaid program?s efficiency have committed the same error in longer-term analysis during the 1990s. A major point I?ve been making is that Medicaid enrollment has grown due to eligibility expansions. During the 2001-02 period, enrollment was growing also because of the recession. This will serve statistically to moderate the per-capita trend ? you are adding to the denominator ? even as it exacerbates the upward trend in total spending, and thus cost to taxpayers. Enrollment in private plans follows a different pattern, thus generating incomparable results.

In fact, from 1994 to 2000, Medicaid spending nationally rose by 31 percent while overall health care spending minus Medicaid rose by 18.5 percent and the overall economy (GDP) grew by 20.5 percent. Medicaid is not a paragon of virtue, at least as health-care inflation is concerned. I will admit that health care spending has been surging across the board, public and private, but again we?d likely disagree as to cause.

On the gap between the rich and poor, obviously we can?t effectively wage that rhetorical battle today. Indeed, it might well be an excellent topic for a future ?Raising the Issue.? But I would object to portraying modern-day Russia as ?anarchic.? Much of its economic woes stem from its continuing statist mindset, heavy-handed regulations, and lingering bureaucracies, though business activity there is also depressed due to the absence of an effective rule of law to enforce contracts and protect private property.