Cutting Medicaid Means Cutting Care For The Poor, Sick And Elderly
The part of Paul Ryan’s budget that’s going to get the most attention is his proposal to privatize and voucherize Medicare. But the part that worries me the most is his effort to slash Medicaid, with no real theory as to how to make up the cuts.
Ryan’s op-ed introducing his budget lists Medicaid under “welfare reform,” reflecting the widespread belief that Medicaid is a program for the poor. That belief is wrong, or at least incomplete. A full two-thirds of Medicaid’s spending goes to seniors and people with disabilities — even though seniors and the disabled are only a quarter of Medicaid’s members. Sharply cutting Medicaid means sharply cutting their benefits, as that’s where the bulk of Medicaid’s money goes. This is not just about the free health care given to some hypothetical class of undeserving and unemployed Medicaid queens.
But perhaps cutting it wouldn’t be so bad if there were a lot of waste in Medicaid. But there isn’t. Medicaid is cheap. Arguably too cheap. Its reimbursements are so low many doctors won’t accept Medicaid patients. Its costs grew less quickly than those of private insurance over the past decade, and at this point, a Medicaid plan is about 20 percent cheaper than an equivalent private-insurance plan. As it happens, I don’t think Medicaid is a great program, and I’d be perfectly happy to see it moved onto the exchanges once health-care reform is up and running. But the reason that’s unlikely to happen isn’t ideology. It’s money. Giving Medicaid members private insurance would cost many billions of dollars.
That’s why it’s well understood that converting Medicaid into block grants means cutting people off from using it, or limiting what they can use it for. You can see CBO director Doug Elmendorf say exactly the same thing here. There’s just not another way to cut costs in the program. You can, of course, work to cut costs outside of the program, either by helping people avoid becoming disabled or making it cheaper to treat patients once they become disabled or sick, but those sorts of health-system reforms are beyond the ambitions of Ryan’s budget.
To get around some of this, Ryan’s op-ed talks about state flexibility, with the implication being that states have some secret Medicaid policies they’ve been dying to try but that the federal government simply hasn’t let them attempt. But the truth is there’s been a tremendous amount of experimentation in Medicaid over recent decades. Indiana converted its Medicaid program into health savings accounts. Tennessee based its program around managed care. Massachusetts folded its Medicaid money into Mitt Romney’s health-care reforms. Oregon tried to rank treatments by value. Some of these reforms have worked well and some haven’t worked at all, but none have solved the basic problem that covering the sick and disabled costs money, and you can’t get around that by trying to redesign their insurance packages. For that reason, block-granting Medicaid ultimately means cutting health-care coverage to the poor, the elderly and the disabled, even as it doesn’t actually address the factors driving costs throughout the health-care system.
By: Ezra Klein, The Washington Post, April 5, 2011
Teaparty, More Dumb Than Clever
Although I’m not part of the Tea Party movement and I don’t share its values, I usually understand what its followers are trying to do. But their latest gambit on health care has me genuinely baffled.
The idea is to oppose the Affordable Care Act not in the Congress or the courts, where they’ve been fighting so far, but in the state legislatures. As you may recall, the Act calls upon states to create the new “exchanges,” through which individuals and small businesses will be able to buy regulated insurance policies at affordable prices. The simplest way to do that is for state legislatures to pass laws creating exchanges that conform to the Act’s standards. Several states have started that process already–and a few, like California, are well along in their efforts.
But Tea Party activists have been lobbying state lawmakers to vote against such measures and, in a few states, it looks like they’re succeeding. Politico’s Sarah Kliff has the story:
In South Carolina, tea party activists have been picking off Republican co-sponsors of a health exchange bill, getting even the committee chairman who would oversee the bill to turn against it.
A Montana legislator who ran on a tea party platform has successfully blocked multiple health exchange bills, persuading his colleagues to instead move forward with legislation that would specifically bar the state from setting up a marketplace.
And in Georgia, tea party protests forced Gov. Nathan Deal to shelve exchange legislation that the Legislature had worked on for months.
It’s a great idea for blocking the law, except for one small problem: The Affordable Care Act anticipates that some states might not create adequate exchanges. And the law is quite clear about what happens in those cases. The federal government takes over, creating and then, as necessary, managing the exchanges itself. In other words, if state lawmakers in Columbia, Helena, and Atlanta don’t build the exchanges, bureaucrats in Washington are going to do it for them.
I realize that blocking the exchange votes may have certain symbolic value–and, at least in the early going, it could complicate implementation simply by generating more chaos. (Georgia lawmakers, as the article suggests, had already put in a lot of time on theirs.) I also gather that some Tea Party activists believe that blocking state exchanges will strengthen the constitutional case against the law. Still, if even part of the law withstands both congressional repeal and court challenges, as seems likely, the long-term effect of this Tea Party effort seems pretty clear: It will mean even more, not less, federal control.
The irony here is that, throughout the health care debate, liberals like me wanted federal exchanges, in part because we feared states with reluctant or hostile elected officials would do a lousy job. That’s the way exchanges were set up in the House health care reform bill and, in January of 2010, many of us hoped the House version would prevail when the two chambers negotiated the final language in conference committee. But the conference negotiation never took place, because Scott Brown’s election eliminated the Democrats’ filibuster-proof majority. The House ended up passing the more conservative Senate bill, which had state exchanges, and that became the law.
Of course, not all Republicans agree with the Tea Party’s approach. In a previous article, for Politico Pro, Kliff interviewed several state officials who said they were setting up exchanges, notwithstanding their opposition to the law, precisely because it is the surest way to keep out the feds.
Len Nichols, the health care policy expert at George Mason University, thinks that approach makes a lot more sense, given their priorities:
Ironically, the only way to make PPACA a “federal takeover” is for states to do nothing. There is much state flexibility in the law, and much more could be sensibly negotiated and amended before 2014, but the strategy of repeal, do nothing and “get the government out of health care” will have exactly the opposite effect in those states that follow this path.
Maybe the Tea Party activists know something that neither Nichols nor I do. My bet, though, is that this effort is the policy equivalent of a temper tantrum, one that opponents of federalizing health care may come to regret.
By: Jonathan Cohn, The New Republic, March 31, 2011
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