“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
“Saving Medicare From The GOP, Again”: Raising Medicare Age Won’t Save Money But Will Cost Lives
Raising taxes on the rich alone won’t close the deficit or erase the national debt, as Republicans superciliously inform us over and over again. But in their negotiations with the White House to avert the so-called fiscal cliff, Congressional Republicans seem obsessed with a change in Medicare eligibility whose budgetary impact (when compared with ending the Bush tax cuts for the wealthy) is truly negligible — but whose human toll would be immense.
That Republican imperative is to raise the Medicare eligibility age from 65 to 67.
Why do Speaker John Boehner and the Republican majority in the House so badly want to put Medicare out of reach of elders younger than 67? It will be costly to their most loyal voting constituency among older whites. And it won’t save much money, according to the nonpartisan Kaiser Family Foundation’s latest study – which shows that the estimated $148 billion in savings over ten years is largely offset by increased insurance costs, lost premiums, and higher subsidies that will be paid as a consequence. The Center on Budget and Policy Priorities offers an even more stringent analysis, which shows that raising the eligibility age in fact will result in total costs higher than the putative federal savings — which amount to around $50 billion over ten years. Contrast that with the savings achieved by ending the Bush tax cuts for the wealthy, which amounts to well over $1 trillion during the same period — and it becomes clear which party wants to reduce deficits.
Assuming that the savings are mostly mythical, the only sensible assumption is that Republican politicians and financiers simply hate Medicare, a highly successful and popular federal program that the right has been trying to destroy, with one tactic or another, ever since its establishment in 1965. They don’t really care whether their alleged solutions save money or improve efficiency. They want a privately-funded medical system that preserves profits rather than a system that improves and expands health care, as Medicare has done for almost half a century.
What the Republicans evidently desire most in their “reform” crusade is to exacerbate inequality among the elderly – because that is the only assured outcome of their plans.
The impact of raising the Medicare eligibility age by two years will fall most heavily upon older African-American and other minorities, as they are still known. The projected damage is summarized clearly in a chart posted on Monday by Sarah Kliff at the Washington Post’s Wonkblog. The number of uninsured among the elderly will be increased for all groups, but the greatest increase will be among minorities, who will also become more likely to postpone medical care because they lack coverage. The net effect of those changes, to project from what we already know about people who lack of insurance and postpone care, will be earlier deaths and much suffering.
Even more broadly, delaying eligibility is a direct assault on the standard of living of working-class Americans, especially those who have earned their way through physical labor. By age 65, people who have spent decades engaged in hard physical work – as firefighters, nurses, or other first responders, to consider the most obvious examples – are ready to stop working. Medicare is a critical element of their ability to retire, but Washington elites, especially on the right, are obtusely unsympathetic to their conditions.
It is up to the Democrats in Washington, especially President Obama, to protect Americans from such policy proposals, which are economically idiotic and socially inhumane. For there is one objective that the Republicans would certainly achieve if they induce the President to accept, or worse, propose, any such plan: They will discredit his second term before it has begun.
By: Joe Conason, The National Memo, December 11, 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
“Blue Light Special”: Walmart To Pass More Of Its Costs On To Taxpayers
The nation’s largest private employer, Walmart, has announced that beginning in 2013 it will begin drastically reducing the number of new hires who receive health insurance coverage, according to The Huffington Post.
The retail giant surprised many by supporting the drive for universal health care in 2007 and then the employer mandate in 2009.
However, its planned policy of not offering new employees health insurance if their hours dip below 30 a week indicates that they intend to take advantage of Obamacare’s new obligation to provide coverage for those who cannot afford it. And with several Republican governors promising to deny the funds for Medicaid expansion, the new policy could lead to a swift increase in the uninsured.
In several states, Walmart tops the list of employers whose employees seek government-funded health care and food assistance for their families, forcing taxpayers to subsidize its low prices and low wages.
Former Secretary of Labor Robert Reich points out that despite the incredible wealth of Walmart’s primary stockholders, the Walton family, its employees earn wages that may not even keep them out of poverty.
“The average Walmart employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits,” Reich wrote in one of his recent columns encouraging the retail giant’s employees to organize. Across the country a small percentage of Walmart’s employees walked out on Black Friday, protesting the company’s alleged retaliation against workers who speak out for better working conditions.
“Organizing makes economic sense,” Reich wrote.
In 2006, Walmart responded to criticism by greatly expanding the number of employees to whom it offered health insurance. They reduced the number receiving coverage in 2011.
“This is another example of a tremendous government subsidy to Walmart via its workers,” Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara told The Huffington Post.
This change in policy will push the number of employees without benefits closer to one half.
Critics have said that Walmart provides a huge benefit to poor consumers by multiplying the value of food stamps with its low prices. But to Doug Henwood, that argument misses the central problem with the impact that Walmart has had on our economy:
And, yeah, it’s nice that Walmart has been able to provide a working class facing at best stagnant wages with lots of cheap stuff, but Walmart has itself had no small effect on dragging average wages down. It’s not just that they’ve been an inspiring business model for the rest for corporate sector, impressed by the chain’s growth and profitability. That’s led to endless rounds of outsourcing and speedup. But also by lowering the cost of reproduction of the working class, to use the old language, they’ve made it easier for employers to keep a lid on wages.
Add into the equation that taxpayers are subsidizing the costs of these wages and you have a formula for a permanent underclass underwritten by a government that can do little else than providing basic health care and sustenance.
By: Jason Sattler, The National Memo, December 3, 2012
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