“It’s All Or Nothing”: The Obama Administration Plays Hardball On Medicaid
When the Supreme Court upheld the Affordable Care Act, it also gave Republican states a gift by saying they could opt out of what may be the ACA’s most important part, the dramatic expansion of Medicaid that will give insurance to millions of people who don’t now have it. While right now each state decides on eligibility rules—meaning that if you live in a state governed by Republicans, if you make enough to have a roof over your head and give your kids one or two meals a day, you’re probably considered too rich for Medicaid and are ineligible—starting in 2014 anyone at up to 133 percent of the federal poverty level will be eligible. That means an individual earning up to $14,856 or a family of four earning up to $30,657 could get Medicaid.
Republican governors and legislatures don’t like the Medicaid expansion, which is why nine states—South Dakota, plus the Southern states running from South Carolina through Texas—have said they’ll refuse to expand Medicaid (many other states have not yet said whether they’ll do it). But some states asked the Obama administration whether they could expand Medicaid a bit—maybe not cover everyone up to 133 percent like the law says, but add a few people to the rolls. And yesterday, the administration said no. It’s all or nothing: either you expand Medicaid up to 133 percent, or you get none of the new money. Was that the right thing to do? Well first, let’s talk about that money.
These Republican states offer worries about cost as their reason for rejecting the Medicaid expansion. But in truth, it’s an incredibly sweet deal for them. Right now, the federal government generally pays half of the cost of Medicaid, with the state picking up the other half. But the federal government will pay 100 percent of the cost of new Medicaid recipients signed up because of the expansion between 2014 and 2016. After that the federal contribution will step down to 90 percent by 2020, where it will stay forever more. So the state gets to insure a whole bunch of its citizens for nothing at first, and eventually for only 10 cents on the dollar. And in return they get reduced costs for uncompensated care, and a healthier, more productive citizenry with more money to spend. Some studies have projected that states will more than make up for their 10 percent contribution with health care savings they’ll get from an insured population; that’s likely to be particularly true among those states whose Medicaid eligibility standards are currently the stingiest, who not coincidentally have the highest rates of uninsured citizens (and, also not coincidentally, are precisely those states where the Republican leadership is refusing to accept the expansion).
And yet, the most conservative among them won’t take the deal. The federal government is saying to the states, Here is a bunch of free money for you to give health insurance to your uninsured poor citizens. And these states are saying, No way! Their justification of budget worries is so unpersuasive that it’s impossible to avoid the conclusion that they would rather see people have no insurance, and thus be poorer, sicker, and die sooner, than get Medicaid via Obamacare. It’s truly a moral abomination.
By playing a little bit of hardball and not letting states get away with a partial expansion, the administration is betting that before long the states will find all this free money to insure their citizens irresistible. And they may be right. That’s what happened when Medicaid was established in 1965; few states signed up at first, but before long they all did. Right now these governments are being pressured by some powerful interests to take the expansion, particularly the hospitals who have to deal with patients with no way to pay their bills. If they expanded Medicaid a little but not fully, that pressure wouldn’t be as intense and they could claim they expanded coverage. This way they won’t be able to hide behind a partial expansion and claim they did the right thing. Let’s hope the administration is right, because millions of Americans’ futures depend on it.
By: Paul Waldman, Contributing Editor, The American Prospect, December 11, 2012
“Save The Babies Or Save The Budget”: Dear Conservatives, Your Opposition To Family Planning Comes With A Huge Price Tag
Conservatives have long painted themselves as the guardians of fiscal sanity. But they have also fashioned themselves as the guardians of the innocent babies being preyed upon at Planned Parenthood. Even though abortions make up just 3 percent of the services Planned Parenthood provides—and many clinics don’t provide them at all because of restrictions placed on the funding they receive—conservatives have long held a legislative grudge against the organization and have even broadened their contempt to other family planning clinics.
That deep-held distaste for women’s health providers led Texas lawmakers last year to slash $73 million from all of its family planning services and shift the money to other areas of the budget. This blunt instrument hit all of the state’s women’s health providers, but was meant to target Planned Parenthood and deny it taxpayer dollars—even though the clinics that received state subsidies for care never performed abortions.
This may be in line with their staunch opposition to what they see as a baby-killer, but that ideology comes with quite the price tag. News has surfaced that for the two-year period between 2014 and 2015, poor women are expected to deliver nearly 24,000 babies that they wouldn’t otherwise have had if they had access to state-subsidized birth control. Those extra births will cost taxpayers as much as $273 million, with between $103 million to $108 million of that hitting the state’s general revenue budget alone. Much of the cost comes from caring for those infants through Medicaid.
Lawmakers may not care about what this means for the lives of the low-income women who are now bearing and raising children whose births they would have otherwise prevented had they had access to contraception. But conservatives, the fiscally responsible party, are now thinking twice about the budgetary implications. The New York Times reported last week that “a bipartisan coalition is considering ways to restore some or all of those family planning dollars, as a cost-saving initiative if nothing else.” It’s not like the budget hit should come as a surprise, however. When the cuts were initially debated, an estimate was circulated that they would lead to an extra 284,000 births at a cost of $239 million. Yet the cuts passed, “a price that socially conservative legislators were willing to pay in their referendum on Planned Parenthood,” as the Times reports.
And unfortunately, the ideological battle against Planned Parenthood will not be brought to a complete cease-fire, even in the face of these stark numbers. Planned Parenthood will almost certainly be excluded from any reinstated family planning funding because of an existing ban against taxpayer money going to providers who are “affiliated” with clinics that perform abortions, even if they don’t do so themselves. While there are other women’s health providers in the state, RH Reality Check’s Andrea Grimes set out to find out whether the hundreds of listings on Texas’s website actually provide the services women need. She found that “many of them don’t provide any kind of contraceptive care, don’t take Medicaid Women’s Health Program clients, or are simply misleading duplicate listings.”
And the ones that do offer the right services likely won’t be able to meet the huge increase in demand. Grimes cites a study that found that Planned Parenthood accounted for half of the state’s women’s healthcare, serving nearly 52,000 clients. The remaining providers mostly serve ten or fewer patients. That’s just not going to cut it for all of the women who now need to find care.
Continuing to deny funding to Planned Parenthood will keep costing the state, even if other clinics see their funding reinstated. To the tune of an estimated $5.5 million to $6.6 million as a result of paying for the entire women’s health program on its own, rather than receiving the 90 percent federal matching funds, as well as paying for a higher number of births that will have to be covered by Medicaid funds.
Texas is a huge state, so its case sticks out like a sore thumb. But it’s not the only one to go after family planning services and Planned Parenthood. As the Guttmacher Institute reports, last year some states felt compelled by the federal push to ban federal funds from going to Planned Parenthood to look at whether providers in their states that use private funding for abortion should be barred from receiving state funding or, in some cases, federal Medicaid reimbursements. Currently, six states prohibit some providers from receiving family planning funds and in three the restrictions apply to those that provide abortion or are affiliated with agencies that do.
So conservative lawmakers across the country will now be faced with a choice: save the babies or save the budget. Because it’s clear that you can’t do both. Organizations that provide contraception—and, it must be said, abortions—not only do great service to the women who need to control their fertility and their lives. They do great service to taxpayers. By giving women access to contraception, publicly funded family planning organizations save us $3.74 for every dollar we spend in avoided Medicaid costs associated with unplanned births. Their services saved federal and state governments $5.1 billion in 2008.
As Texas has just found out, those aren’t imaginary numbers. They are very real. Whoever says that contraception and abortion aren’t economic issues should take a second look. They have a huge impact on women’s financial situations. But, perhaps higher on conservatives’ checklist, they have an enormous impact on the budget.
By: Bryce Covert, The Nation, December 10, 2012
“The Austerity Trap”: What Raising The Medicare Eligibility Age Really Means
After a campaign in which Republicans attempted to pillory Barack Obama for finding $716 billion in savings from Medicare (via cuts in payments to insurance companies and providers but not cuts to benefits), those same Republicans now seem to be demanding that Obama agree to cuts in Medicare benefits as the price of saving the country from the Austerity Trap, a.k.a. fiscal cliff. Oh, the irony! You’d almost think that they weren’t really the stalwart defenders of Medicare they pretended to be.
And there are some hints that the Obama administration is seriously considering agreeing to raise the Medicare eligibility age from 65 to 67 as part of this deal. It’s a dreadful idea, and as we discuss this possibility, there’s one really important thing to keep in mind: Medicare is the least expensive way to insure these people. Or anybody, for that matter. In all this talk of the bloated entitlement system, you’d be forgiven for thinking Medicare was some kind of inefficient, overpriced big government program. But the opposite is true, and that’s why raising the eligibility age is such a dreadful idea.
Raising the eligibility age saves very little money, on the order of a few billion dollars a year. That’s because the 65 and 66-year-olds will have to get insurance somewhere, and many of them are going to get it with the help of the federal government, either through Medicaid or through the insurance exchanges, where they’ll be eligible for subsidies. However, since many Republican-run states are refusing to expand Medicaid in accordance with the Affordable Care Act, lots of seniors who live in those states will just end up uninsured, which will end up leading to plenty of financial misery and more than a few premature deaths. Put this all together, and the Center on Budget and Policy Priorities estimates that while the federal government would save $5.7 billion a year from raising the eligibility age, costs would increase by more than twice in other parts of the system—for the seniors themselves, employers, other enrollees in exchanges who would pay higher premiums, and state governments.
What we’d be doing is taking people off Medicare, the most efficient and inexpensive option for them to have insurance, and putting them into the individual market, which works less well and costs more. When we start talking about this in more detail, that’s what Republicans should really be forced to address.
If you want more details on the implications of raising the eligibility age, you should be reading Jonathan Cohn and Sarah Kliff. But it’s important that we keep the big picture in view as the Austerity Trap deal takes shape. If anything, we should be putting more people on Medicare—that would save money and improve health in the system overall (you may recall that when the ACA was being debated one of the proposals was to allow people over 50 to buy in to Medicare, an idea we should bring back). There’s an argument being made that raising the eligibility age may not be a good idea, but the administration has to give Republicans something, and it’s not that big a deal. If that’s the case that wins the day, we should be clear about exactly what it means: a more expensive health care system, exactly the opposite of what everybody says they want.
By: Paul Waldman, Contributing Editor, The American Prospect, December 10, 2012
“Just Another Shell Game”: John Boehner’s Medicare Proposal Is Sleight Of Hand, Not Cost Control
Denying Medicare to seniors until they reach age 67 will shift costs to seniors, states, and employers without reducing the actual cost of healthcare by one penny. It’s a shell game, and it should not be an option in the fiscal showdown talks.
While it would reduce Medicare expenditures, those costs won’t vanish. Yes, the federal government would save $5.7 billion in 2014, but that would be offset by an additional $11.4 billion spent by states, employers, and seniors, according to the Kaiser Family Foundation. That’s a cost shift and a cost increase.
The Congressional Budget Office assumes that half of 65- and 66-year-old seniors would continue employer-sponsored coverage at a cost of about $4.5 billion in 2014. That would likely accelerate the long-term decline in corporate benefits for retirees.
States would also pay because low-income uninsured seniors would be eligible for Medicaid. Even if the federal government would pay 100 percent of the cost of the new beneficiaries, states would still be on the hook for an additional $700 million in 2014 alone.
And, of course, seniors lose in the deal. Two thirds of those ages 65 and 66 would each average $2,200 more in out-of-pocket costs ($3.7 billion total) in 2014, even when accounting for subsidies to buy a plan on a health insurance exchange.
There’s another significant but less obvious cost shift through increased premiums in Medicare and in the exchange. Seniors ages 65 and 66 are the healthiest and least expensive Medicare beneficiaries, and they help lower premiums for all enrollees. Moving them to private coverage, where they would be the least healthy and most expensive health plan members, would drive up premiums for everyone else in the exchanges.
Boehner’s proposal seems more sleight of hand than legitimate cost control. It’s about weakening Medicare, not strengthening the program for future generations.
If we really want to think big about Medicare reform, let’s consider lowering the age of eligibility. Letting people as young as 55 buy into Medicare would improve the risk pool for seniors and strengthen Medicare’s bargaining power without raising program costs.
By: Ethan Rome, Executive Director of Health Care for America Now, U. S. News and World Report, December 6, 2012
“Pretending To Negotiate”: Basic Arithmetic For Republicans Just Doesn’t Add Up
If President Obama honestly wants to negotiate an agreement with Republicans before the year-end fiscal deadline, he must be deeply frustrated. And if he doesn’t really want to negotiate with them, then he should be delighted, for the same reason: Their latest “offer” laid before him by House Speaker John Boehner demonstrates again their refusal to reveal their true intentions — and their inability to do simple arithmetic.
Consider their treatment of Medicare, the popular social insurance program for seniors that Republicans have always despised. They have just emerged from a long national campaign in which they repeatedly and falsely claimed to “protect” Medicare from the president — whom they accused of wanting to slash $716 billion from the program — but now they complain that he won’t cut it enough. The Obama cuts were mythical, but the Boehner budget proposal includes at least $600 billion in Medicare and Medicaid reductions.
Worse still, the Republicans propose to perform this crude surgery on Medicare without the slightest explanation of where they would cut. Washington rumors suggest that they would achieve some of those cuts over the next 10 years by raising the eligibility age by two years to 67 and by increasing premiums for more affluent beneficiaries.
As Robert Greenstein of the Center on Budget and Policy Priorities pointed out on Tuesday, however, those changes would not begin to achieve the savings required by the Boehner proposal.
The same problem undermines the other aspects of Boehner’s proposal, which includes $600 billion in additional unspecified cuts. Either their arithmetic doesn’t work — or, as Greenstein worries, they mean to inflict severe cuts in health and other services that would harm elderly and poor Americans, but want to conceal those consequences from the public.
Yet there is an even deeper problem with Boehner’s arithmetic. The Republicans are fighting to extend all the Bush tax cuts to the wealthiest two percent along with everyone else — but their alternative proposals are utterly inadequate to compensate for the $1.3 trillion in revenues lost by continuing those cuts for the rich. To “offer” $800 billion in new “revenues” obtained by eliminating deductions rather than raising rates simply doesn’t work, as a matter of basic math. It isn’t nearly enough money.
If Republican leaders cannot do the arithmetic, then it is impossible to negotiate with them. If they can do the arithmetic but insist on falsifying the answers, then it is both unwise and impossible to negotiate with them.
Unless and until the Republicans start talking about real numbers that can actually add up, there is nothing to be gained from pretending to negotiate. Nor should the president start negotiating with himself, as he has sometimes done in the past. Instead, he ought to make sure that the opposition understands what will happen when they fail to act responsibly. After January 1, he will bring them an offer they cannot refuse, to restore cuts for the 98 percent — and they will be held accountable for any consequences caused in the meantime by their stalling.
By: Joe Conason, The National Memo, December 5, 2012
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