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As our friends at Media pointed out, Bill Kristol was still fear mongering about government health care rationing on Fox News Sunday this weekend.

WALLACE: Let's go to the substance of this before we get back to the regulation question, Bill, because there is, the fact -- as I suspect, a number of us have living wills, do not resuscitate things. And "The Wall Street Journal" editorial, as you say, said the problem wasn't the policy, it was the process, the idea of being forced to drop something out of the law and then going around Congress and doing it through a regulation.

But there was an interesting article I read yesterday that pointed out states like Arizona and Indiana are already in their state Medicaid, beginning to ration care and saying, you know, we're just not going to pay for transplants or extraordinary measures because we can't afford to do it. So, in that sense, there is already rationing going on, a lot more serious than this end-of-life counseling.

KRISTOL: And the more government takes over health care, the more government rationing there will be, and the more the government will tell you whether you have to have a living will or whether you have to discuss it with your doctor every year, or every five years. And that is this argument against Obamacare.

The point about this regulation, it was buried in the thousand of pages of regulations. Do we really want our health care system run by people at HHS, writing ten thousands of pages of regulations based on this incredibly complex Obamacare bill, or do we want a system in which people can work this out with their own doctors? I think it's a very good issue for Republicans to have the oversight hearings on, along with many, many other regulatory issues where Republicans should look a look at what the Obama administration is doing.

As Media Matters noted in their article, there is plenty of rationing going on, but it's the insurance companies that are doing it.

Chris Wallace pointed to Arizona as an example of governments rationing their health care, but he didn't bother to mention how the state got there as this article explains.

How we got here: Arizona budget history:

2003: Housing boom officially begins, increasing revenue and decreasing the projected shortfall. State further decreases the shortfall with more cost delays and a $310 million federal bailout.

2006: State has a $1.5 billion budget surplus. Gov. Janet Napolitano, a Democrat, works with a GOP-led Legislature to expand or create a number of state programs, including $160 million for all-day kindergarten. They also pass $500 million in tax cuts.

2007: Housing boom begins to go bust. National recession officially begins.

2008: Napolitano joins the U.S. Department of Homeland Security; Secretary of State Jan Brewer becomes governor. Brewer suggests a tax increase to overcome budget shortfalls.

January 2009: Brewer sworn in, putting the executive and legislative branches of state government in GOP hands.

March 2009: Brewer speech lays out a recovery plan that includes a sales-tax increase; two Republican lawmakers walk out.

July 2009: Brewer vetoes bulk of a legislative budget plan for 2010. Plan lacked a tax increase.

November 2009: Brewer signs a budget package that cuts $144 million from K-12 schools and $155 million from the state Department of Economic Security. For the first time, the state exceeds its threshold of $500 million in IOUs backed by state-held accounts and must turn to institutional lenders.
This year

January: State for the first time goes to the public bond market to sell 14 state buildings, including the tower that houses the Governor's Office, for $735.4 million. The state retains control of the buildings and leases them back at an interest rate of 4 percent.

February: Legislature passes a bill to ask voters to pass a three-year 1-cent-per-dollar increase in the state sales tax. The state begins to close parks.

March: Lawmakers eliminate KidsCare, a $22 million program for children from lower-income families, but restores it after discovering the state would lose $7 billion in federal Medicaid dollars.

May: Voters approve the state sales-tax hike.

July: State ends funding for all-day kindergarten, saving the state $218 million.

November: Voters decide not to let the Legislature take $345 million from the First Things First early-childhood-education program and $123 million from a land-conservation fund to help balance the general fund.

December: Budget shortfall for the current fiscal year, which ends in June, is $825 million and for next fiscal year is $1.4 billion.

So Republicans refused to raise taxes in the state and then Jan Brewer started cutting social services instead. Sadly as this article in the New York Times noted, this is something we're going to see more of and until our economy improves or states choose some different priorities with how to solve their budget deficits instead of balancing them off of the backs of the poor.

Arizona Medicaid Cuts Seen as a Sign of the Times:

With enrollments exploding, revenues shrinking and the low-hanging fruit plucked long ago, virtually every state has had to make painful cuts to its Medicaid program during the economic downturn.

What distinguishes the reductions recently imposed in Arizona, where coverage was eliminated on Oct. 1 for certain transplants of the heart, liver, lung, pancreas and bone marrow, is the decision to stop paying for treatments urgently needed to ward off death.

The cuts in transplant coverage, which could deny organs to 100 adults currently on the transplant list, are testament to both the severity of fiscal pressures on the states and the particular bloodlessness of budget-cutting in Arizona.

“It’s a real sign of the times,” said Alan Weil, executive director of the National Academy for State Health Policy. “And I think this is a precursor to a much larger number of states having this discussion.”

Policy choices with such life-threatening implications are all the more striking given the partisan framing of the health debate.

Republicans have argued that the new health law will lead to rationing, warning even of “death panels.” Democrats have responded that care is already rationed, with 50 million people going largely without insurance, and that the law will bring greater equity.

The Arizona case, said Diane Rowland, director of the Kaiser Commission on Medicaid and the Uninsured, “is a classic example of making decisions based not on medical need but based on a budget.” And, she added, “it results, potentially, in denial of care to individuals in a life-or-death situation.”