Wednesday, March 12, 2014
The Northern European country of Denmark is probably best known as the home of medieval Vikings and the modern day welfare state. The Viking legend lives on but, today, the extremely generous entitlement programs are being retooled.
In case you missed it on Saturday, this New York Times article “Danes Rethink a Welfare State Ample to a Fault” describes how the expansive welfare net is breaking the bank and undermining the country’s work ethic.
In return for one of the highest personal income tax brackets in the world, 56.5%, Danes receive cradle-to-grave government benefits such as a university education, a hefty pension at an early age, and lifetime health care. In many cases, welfare cash payments and other benefits exceed the earnings of full-time workers.
Denmark is now weaning many of its citizens off comfortable government benefits and guiding them into the workforce. Early retirement plans have been reduced; unemployment benefits have been limited to 2 from 4 years; and lifetime disability cases are being reviewed. As the Danish population ages, public officials realize that these and other reforms must be enacted to avoid the financially and socially destructive routes taken by Greece, Spain, and Italy.
Karen Haekkerup, the Danish minister of social affairs and integration, says “In the past, people never asked for help unless they needed it. But now people do not have that mentality. They think of these benefits as their rights. The rights have just expanded and expanded. And it has brought us a good quality of life. But now we need to go back to the rights and the duties. We all have to contribute.”
Although every situation is unique, many other countries and some American states are experiencing similar public assistance problems. Here in Maine, our Medicaid health care welfare program, called MaineCare, has grown so large during the past decade that it now enrolls 27% of our entire state population.
MaineCare’s overly generous benefits include chiropractic, dental, and podiatry care not offered in most other states. Some severely disabled, elderly sick, and poor Mainers do not receive badly needed health care services because MaineCare dollars are spread so thin among so many citizens, including able-bodied 19 and 20-year-olds and middle-income households.
Overspending on our Medicaid program during the past dozen years has also caused ongoing state government budget shortfalls. This, in turn, has led to the underfunding of other essential services like road and bridge repair. Our elected officials kicked this fiscal can down the street by not fully paying Maine hospitals for health care services provided to Medicaid recipients. The resulting $484 million debt has caused hospitals to lay off employees and postpone the purchase of new equipment to treat patients.
Right now, state legislators in Augusta are considering whether or not to increase taxes on Maine families and the businesses that employ them to pay for their overspending. A healthier path is to rightsize our unaffordable and unsustainable Medicaid health care welfare program, and to pay Maine hospitals the $484 million they are owed.
Bruce Poliquin is the former Maine State Treasurer and a 2012 Republican primary candidate for the United States Senate. He has 35 years of experience owning and managing businesses. Bruce is a proud third-generation Franco-American Mainer and Harvard University graduate. Visit BrucePoliquin.net for his most recent commentary and analysis on media outlets throughout the State about the important issues facing Maine families and their jobs.