WAL-MART IS THE HAM IN THE SOCIALIZED MEDICINE SANDWICH

With the war on Wal-Mart now heating up in nearly three dozen state legislatures, I put a call in to someone who was in on the ground floor in pushing to force the retailer to spend more on health care for its employees. What Maryland's Delegate James Hubbard, a Democrat from Prince George's County, had to say was revealing of both why he backed his state's "Wal-Mart bill" and what this fight is really about: expanding Medicaid and other taxpayer-funded health-care entitlements.

Let's first understand that the drive to enact anti-Wal-Mart legislation has very little to do with the retail giant except in two respects: dipping into its very deep pockets, and using the controversy surrounding the company to mask the larger agenda of expanding already-bankrupt entitlement programs. Of course, in this war legislators have a ready made ally in the AFL-CIO, which has its own reasons for going after the nonunionized company.

With that, let's turn to Mr. Hubbard. He began our conversation by pointing out that the Wal-Mart bill--which forces companies with more than 10,000 employees to spend at least 8% of their payroll on health care or pay the state the difference--was always intended to be just the first step. Four years ago, he made his intentions clear by introducing legislation to increase cigarette taxes and to use the tax code to compel employers to provide health insurance. Under his legislation the revenue from these taxes would be dumped into a new state fund that would then be used to expand Medicaid eligibility to families with incomes up to 300% of the poverty line (up from 200% now). But even in a legislature with large Democratic majorities, his bill stalled.

So Mr. Hubbard and others settled on a new approach--pushing through smaller, bite-sized pieces. The first piece was the Wal-Mart bill. It passed last year and was enacted last month, when the Legislature overrode Gov. Robert Ehrlich's veto. Two weeks ago Mr. Hubbard was at it again, this time introducing a new bill to mandate that companies with at least 1,000 employees spend 4.5% of their payroll on health care or pay the state the difference. Once this piece is in place, Mr. Hubbard told me, the next step will be to create a similar mandate--perhaps 2% or 3%--for companies with fewer than 1,000 employees. Each year, Mr. Hubbard hopes to expand the mandate to include ever smaller companies with the ultimate goal of "health coverage for all Marylanders."

Mr. Hubbard noted how effective splitting the difference can be in moving legislation toward a larger goal. "If you give up 80% of what you want to get 20%," he said, "after five years you will have nothing left to give up." Mr. Hubbard also noted a quirk in the system that made raising taxes and expanding the Medicaid rolls attractive. With the federal government paying half or more of every dollar spent on Medicaid, states were essentially leaving federal dollars on the table by not expanding the program.

It is within this context that we should view the National Governors Association's meeting in Washington this week. Like all interest groups, the states' chief executives are determined not to leave town empty-handed; and every year a top agenda item for them is getting more federal dollars to cover the ever-expanding cost of Medicaid. And who could blame them? After all, the federal government created Medicaid as a tiny program in the 1960s. Today it eats up, on average, about a quarter of each state's budget and grows every year at a rate that outstrips inflation and threatens to gobble up dollars needed for education and other priorities.

Yet Mr. Hubbard isn't the only state lawmaker who has figured out that he can leverage the federal Treasury to his advantage by expanding Medicaid eligibility. New York is well ahead on this learning curve. According to a recent study published by State Policy Reports, the Empire State receives more federal dollars per capita than any other state and more than twice the national average.

What's now dawning on Wal-Mart CEO Lee Scott is that his company is a middleman in this exchange. So on Sunday he spoke directly to the governors and said there was "too much politics" in state bills taking aim at his company. Of course, that's exactly why more states will target Wal-Mart and other employers in order to raise revenue to expand Medicaid, unless someone in Washington puts a stop to it.

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Foreigners get free surgery on Medicare in Australia too

Sick foreigners are using the Medicare cards of Australian citizens to get free medical treatment in our hospitals. The Medicare fraud, which is costing taxpayers millions of dollars a year, is possible because our outdated Medicare [ID] cards carry no proof of identity. A Daily Telegraph investigation has found a Victorian man was convicted and fined for allowing his father, a foreigner, to use his Medicare card to claim benefits for laser eye treatments and medical consultations worth more than $3300. He told investigators he had committed the fraud because he could not afford to pay for his father's treatment when he came to visit Australia.

A Sydney woman discovered last year that someone received a free kidney operation using her Medicare card after it was stolen. She only discovered the fraud when she visited her specialist for a routine appointment and he asked her how she was feeling after the surgery.

In 2003-04 Medicare Australia investigated 137 reports of members of the public defrauding Medicare. A recent Auditor General's report found 500,000 Medicare cards were still registered to patients who had died. Some citizens have two Medicare cards - one which lists them as a male, the other as a female.

It is not just foreigners who are using stolen Medicare cards to defraud taxpayers. In Western Australia a man has been jailed for 12 months on 80 counts of fraud when he was found to have used another person's Medicare card to get taxpayers to pay for medical services and narcotics. A deregistered Queensland doctor used 21 stolen identities involving Medicare cards to get hold of 19,650 morphine tablets. The fraud cost the Pharmaceutical Benefits Scheme $50,000 and the tablets had a street value of $2 million. Police in Western Australia have uncovered an organised crime syndicate that was using multiple identities and Medicare cards to get taxpayers to pay for medical services. The fraud is estimated to have been worth more than $19,000. These are just some of the fraud cases that have been uncovered by Medicare Australia but the full scale of the problem could be much larger.

Medicare says less than 1 per cent of the $9 billion worth of claims a year it pays out are fraudulent but that still means fraud could be costing taxpayers up to $90 million a year. Human Services Minister Joe Hockey will soon take to Cabinet plans for a new Medicare smartcard that would carry a person's photograph and other identification and help combat Medicare fraud. The enhanced identity safeguards would make it difficult for an imposter or a non-taxpaying foreigner to use another person's Medicare card to claim rebates or get free public hospital treatment.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

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