GRANT PROPOSAL RECORD Foundation for Government Accountability ADDRESS: 15275 Collier Blvd., Suite 201-279 Naples, FL 34119 CONTACT: Mr. Tarren Bragdon AMOUNT REQUESTED: $750,000 STAFF RECOMMENDATION: $350,000 PROJECT TITLE: To support public education about Medicaid and a project on reducing the welfare state and restoring the working class BOARD MEMBERS AFFILIATED WITH REQUEST: STAFF: Mike Hartmann MEETING DATE: 2/24/2015 PROPOSAL ID#: 20141091 BACKGROUND: The Foundation for Government Accountability (FGA) in Naples, Fla., requests a grant award totaling $750,000 -- $250,000 in renewed support of its public education about Medicaid and $500,000 in first-time support of its special project on reducing the welfare state and restoring the working class. Founded in 2011, FGA develops and promotes public policies that achieve limited, constitutional government and a robust economy that will be an engine for job creation across the states. It has a wellearned, good reputation in health-care policy research and prescription. FGA’s president and chief executive officer is Tarren Bragdon, former CEO of The Maine Heritage Policy Center and the youngest person ever elected to the Maine state legislature. A nationally recognized expert on health reform, with a specialty in Medicaid reform, Bragdon has served as a health-policy analyst with the Empire Center for New York State Policy of the Bradley-supported Manhattan Institute for Policy Research. Its board of directors includes Robert A. Levy, who chairs the Cato Institute’s board, and Bridgett Wagner of the Bradley-supported Heritage Foundation. FGA’s mission is national, but its strategy -- in line with much of Bradley’s -- is state-based. It helps conservative state think tanks and other state-centric allies, and it works well with the several other organizations in Bradley’s state-based policy-influencing portfolio. Public education about Medicaid and Obamacare During the past couple of years, FGA’s principal project has been to educate the policymakers and the public in specifically targeted states about the benefits of rejecting Medicaid expansion under Obamacare. Obamacare’s original goal was to make a total of approximately 40 million Americans dependent on the government for their care, by: 1.) trapping about 16 million adults in an expanded Medicaid; and, 2.) baiting another 24 million into exchange plans by 2016. King v. Burwell When the U.S. Supreme Court upheld Obamacare in 2012, it allowed states the option On March 4, the U.S. Supreme Court will hear oral to accept or reject Medicaid expansion. Since arguments in King v. Burwell, a legal challenge brought then, 28 states have accepted expansion, with Bradley support by the Competitive Enterprise Institute to an Internal Revenue Service rule allowing tax according to The Henry J. Kaiser Family subsidies to those participating in health-care Foundation and as shown on the map at the top exchanges established by the federal government and of the next page. In those 28 states, up to 8.3 not the states. There is a subsequent recommendation million adults are projected to have enrolled in to support the Judicial Education Project’s effort to the new, bigger programs -- just 51.9% of the 16 research, write, and coordinate amicus curiae, or million target. Two of these states, Arkansas and “friend-of-the-court,” briefs in King in this section of New Hampshire, had been considering repealing these materials. expansion at the end of last year. Should the challenge succeed, there would only be subsidies for those in the 16 state-established exchanges and not those in the 34 other states that rejected Obamacare and thus with federally run exchanges. These states are shown in the map on the next page. Obamacare would largely be gutted. Congress would have to “start over” on health care again, and it likely would draw on conservative ideas that have been discussed for years -- including tax credits to buy insurance, high-risk pools, and allowing insurance to be sold across state lines. Of the remaining 22 states, eight have outright rejected expansion and, by FGA’s count, 13 were continuing to consider it. According to FGA, the states still considering expansion were Alabama, Alaska, Florida, Idaho, Missouri, Montana, Nebraska, North Carolina, Tennessee, Texas, Utah, Virginia, and Wyoming. Some of these states have applied for waivers from the U.S. Department of Health and Human Services to retool their Medicaid programs, as other states have already been able to do. State Medicaid-expansion and health-care exchange decisions Have accepted Medicaid expansion and have state-run health-care exchange (15 states and D.C.) Have accepted Medicaid expansion and have federally run health-care exchange (13 states) Has not accepted Medicaid expansion and has state-run health-care exchange (1 state; Idaho) Have not accepted Medicaid expansion and have federally run health-care exchange (21 states) Source: Henry J. Kaiser Family Foundation * While Kaiser considers Nevada, New Mexico, and Oregon to have state-run exchanges, they are substantially federally supported. The pending King v. Burwell challenge to Obamacare (about which see the previous page’s sidebar) has no bearing on whether a state decides to expand Medicaid or not. Other than in those states with pending requests for waivers to retool their own programs, many still-undecided are skittish about deciding to either expand or repeal expansion of Medicaid until after the Court rules in King, which likely will be in June. Hypothetically, should King strike down Obamacare’s federal-exchange subsidies, an estimated four million people in the states with federal exchanges would lose those subsidies. Of these states, those 13 that currently have a federally run exchange and have expanded Medicaid might have a greater propensity to create a state exchange as a way to preserve subsidies for their residents. By FGA’s count, nine of these 13 states would have this inclination towards converting to a state exchange. They are Delaware, Illinois, Iowa, Michigan, New Jersey, North Dakota, Ohio, Pennsylvania, and West Virginia. The other four that would be inclined against state-exchange conversion are Arizona, Arkansas, Indiana, and New Hampshire. Reducing the welfare state and restoring the working class FGA would ambitiously also like to research and put together a book on the fiscal, political, and moral costs of the growing welfare state and in support of private civil society’s efforts to eradicate poverty. Last year, it conducted a 58-question survey of 3,600 welfare recipients in California and Texas. From the poll, FGA says, it gained a better understanding of the moral and aspirational impacts of welfare, quantifying the ideological impact that government dependency has on an individual, and showing how the power of a job frees people from dependency and a big-government mindset. (Those categorized as either “poor on welfare” and “off welfare, but not working” say they voted “mostly Democrat;” those “not poor, never on welfare,” “poor, but never on welfare,” and “off welfare, but working now” voted “mostly Republican.”) The book would summarize the survey’s results and highlight some examples of Bradley’s local “New Citizenship” agenda of supporting small, private groups that fight poverty at the neighborhood level, including some from Milwaukee itself -- offering them all as antidotes to the welfare state’s way of addressing the same issues. It is tentatively entitled Dependocrats: How the Left Uses Dependency to Build Power and Trap People in Poverty, and What You Can Do About It. Relatedly, FGA wants to research and educate policymakers and the public about welfare fraud and the benefits of work requirements for food-stamp recipients. Last December, it held a policy summit on these ideas, with representation from 29 states. Budget information: FGA’s overall 2015 expense budget is $4,100,000. Its sources of support have included the Adolph Coors, Arthur N. Rupe, Atlas Economic Research, Beach, Dodge Jones, Ed Uihlein Family, John William Pope, Randolph, and Roe Foundations, the Searle Freedom Trust, Barre Seid (anonymously) through Donors Trust, and SPN. The budget for its public education about Medicaid in particular is $1,470,000. For its project on reducing the welfare state and restoring the working class, its budget is $2,350,000. STAFF RECOMMENDATION: Along with the Bradley-supported Galen Institute, Bragdon and FGA have contributed constructively to the health-care debate. Its topic-specific, in-depth focus on state-level reform has been of a piece with much of Bradley’s other recent strategic grantmaking -- including, among others, to the American Legislative Exchange Council, the Center for Energy Innovation and Independence’s group of state attorneys general, the Goldwater Institute’s state litigation alliance, the Interstate Policy Alliance, the Manhattan Institute for Policy Research’s Center for State and Local Leadership, the Sagamore Institute, Think Freely Media, the State Human Service Secretaries’ Innovation Group (about which see the Work First Foundation recommendation in this section of these materials), and the State Policy Network. Staff thus recommends a $350,000 grant to FGA for public education about Medicaid and its project on reducing the welfare state and restoring the working class, which has promise to helpfully contribute to the public discourse about economic growth and poverty. If awarded, this sum would be a $150,000 increase over last year’s grant. The grantee would retain the discretion to use any award funds for whichever of the delineated purposes.