Health Care One More Time

Republicans love to accuse government of waste and fraud while pointedly ignoring waste and fraud in the private sector. (I always think of that biblical phrase about ignoring the beam in one’s own eye...if you want to talk about fraud, Senator Scott….).

That disconnect is particularly obvious when it comes to America’s incredibly wasteful insistence on private sector health care. Several years ago, I was on a university research team looking at certain aspects of Indiana’s health care environment. I no longer recall the outlines of our investigation, but I do still remember my shock at learning that–at that time–seventy percent of all American health care costs were being paid by some level of government.

It wasn’t just Medicare and Medicaid, or the CDC, or the numerous federal programs aimed at specific diseases. State and city governments support local hospitals for the indigent, and other local programs; more significantly, the millions of people in the U.S. who work for a government entity–universities, police and firefighters, schoolteachers, etc. etc.–have health insurance paid for by tax dollars.

What really blew my mind was the realization that the money government was already spending would be enough to cover almost all of the costs of a national health care system if we simply reduced the enormous amounts spent–wasted– on duplicative paperwork and insurance company marketing and overhead.

What made me think about that long-ago epiphany was an article from The Fulcrum sharing “shocking statistics” about American healthcare.

The first was the number of people on Medicaid. (Not Medicare–Medicaid.) Most of us think of publicly funded healthcare as something offered by Canada and countries in Europe, not the adamantly “private” U.S.

The shocking truth is that most of the U.S. population will soon be on some form of government-sponsored health insurance. Right now, 158 million Americans (nearly half of the nation’s 330 million population) are covered by a combination of Medicare, Medicaid and subsidized enrollment in the state and federal exchanges. Experts predict that percentage will climb.

Within that population is an even-more shocking statistic: According to the Centers for Medicare & Medicaid Services (CMS), enrollment in Medicaid surpassed 90 million in 2022.

This program, traditionally linked to a small population of Americans in poverty, will serve more than 100 million people in fiscal year 2023 (or 1 in 3 insured Americans). Since 2020, Medicaid enrollment has jumped 30% thanks to expansion programs in several more states under the Affordable Care Act and Covid-19 public health emergency funding.

The article highlighted several problematic consequences of that staggering figure, especially the difficulty experienced by enrollees in finding primary care doctors.

The second statistic concerned individuals who aren’t on either Medicare or Medicaid.

Since 2000, medical costs have risen each year by 4.85%, significantly outpacing the 2.85% annual increase in GDP.

With healthcare premiums rising at a faster rate than revenue, businesses have made up the difference by transferring the financial burden to employees in the form of high-deductible health plans.

In 2022, despite below average healthcare inflation, U.S. employees paid a shocking 10.4% more in out-of-pocket healthcare expenses than the year before.

Already, medical costs are the No. 1 cause of bankruptcies in the United States. If a recession ensues as many economists predict, millions more workers and families will suffer economic hardships.

Number three? Forty-eight percent of those eligible for Medicare choose Medicare Advantage.

“Traditional” Medicare, enacted by Congress in 1965, continues to use a fee-for-service reimbursement model—one that pays doctors and hospitals based on the quantity (rather than quality) of medical services they provide.

In 1997, Congress created an alternative program called Medicare Advantage (MA). Unlike traditional Medicare, this option is “capitated.” That means the federal government pays healthcare providers an annual, up-front fee based on the age and health status of the enrollees.

Supporters of MA say that capitation incentivizes doctors to keep patients healthy without over-treating and over-testing them.

However, there are some downsides. Although seniors enrolled in MA enjoy more predictable annual costs and added benefits such as eyeglass coverage, they have fewer choices when selecting doctors and hospitals.

I found that last observation interesting, since most people who oppose national healthcare insist that Americans value choice more highly than cost. Apparently, we don’t.

The article concludes by reminding readers that healthcare inflation has exceeded GDP growth for half a century. The U.S. spends more than twice as much as the next most expensive nation for health care, and the last time I looked, American healthcare was ranked 37th. Meanwhile, employers and families are increasingly finding the costs out of reach.

These statistics just confirm that ideology can kill. (If you doubt that, look at the disproportionate number of Republicans who died of COVID because they refused to be vaccinated.)

Clinging to the belief that we aren’t already “socialized”–and very inefficiently– costs all of us a lot of money.

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Indiana–Ignoring Law, Pursing Bad Policy

The current push by the Trump Administration to add work requirements to Medicaid is stupid and unworkable–not that Trump understands or cares. It is also likely to be costly–adding another condition to receipt of health care is yet another bureaucratic task, another box to be checked off by someone who must be paid to do the checking.

People knowledgable about the program point out that virtually all Medicaid recipients fall into one of three categories. They are elderly, disabled or children. (This is an administration that doesn’t listen to experts, of course. The President’s “gut” is the basis of policy, not evidence or fact.) The consensus of opinion from experts is that it would cost far more to administer the requirement than it would save by throwing a very few people off the program (unless, of course, the requirement is applied more broadly than justified).

And that brings me to my own State of Indiana, where ideology consistently defeats both facts and common sense. Indiana is continuing to pursue work requirements despite the overwhelming evidence that it’s a stupid policy and despite the fact that recent federal court decisions hold that it violates federal law.

On Wednesday, a judge struck down Arkansas and Kentucky’s Medicaid work requirement programs, throwing the future of the conservative health policy — and Medicaid expansion at large — into question.

U.S. District Judge James Boasberg’s ruling blocks Kentucky from implementing its program — which was the first approved by the Trump administration in January 2018 — and puts an end to Arkansas’ program, which has been running since June and has led to the loss of health care for tens of thousands of people.

In a case expected to reach the U.S. Supreme Court, Judge Boasberg ruled that “Medicaid is an entitlement” and that the defendants “did not address … how the project would implicate the ‘core’ objective of Medicaid: the provision of medical coverage to the needy.”

A number of Republicans echo the position taken by (increasingly unpopular) Kentucky Governor Matt Bevin. Bevin has vowed to end Kentucky’s entire Medicaid expansion program if he can’t implement the work requirements. That  would mean 400,000 people would lose their health insurance–but punitive ideology is clearly more important to Bevin than the health care of 400,000 citizens of his state.

Gives “my way or the highway” a whole new emphasis….

What makes this position especially egregious is that it isn’t prompted by cost concerns; it is entirely motivated by opposition to government-provided health care even when the federal government is paying for it.

Work requirements for Medicaid, the nation’s health insurance for the poor, sprang up after the passage of the Affordable Care Act, President Barack Obama’s signature legislation. The law allows and helps states offer Medicaid to more low-income people. The federal government initially pays 100 percent — and eventually 90 percent — of the costs of expanding eligibility to people earning 138 percent of the federal poverty line.

Most of the early adopters of Medicaid expansion were Democratic-led states. Some Republican-led states have slowly expanded coverage, but most of them have added a work requirement for nondisabled people — a policy that the Obama administration repeatedly rejected. Under the Trump administration, CMS has approved work requirement waivers for Arkansas, Arizona, Indiana, Kentucky, Michigan, New Hampshire, Ohio and Wisconsin.

I will never understand the Republican animus toward the poor. Whatever happened to the Christian admonition about caring for “the least of us”?

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The Closer You Look, The Meaner It Is

If your eyes glaze over at the prospect of getting down “in the weeds” of the Senate healthcare bill, Josh Marshall’s summary really tells you everything you need to know:

It has always been crystal clear for numerous reasons that the Senate health care repeal bill would be the like the House bill, both versions, just as it will be like the final bill that emerges from a conference committee. McConnell and Ryan knew that ball hiding about scores and legislative language would prevent reporters from saying this: Around 24 million Americans will lose their coverage, everyone will go back to the era of pre-existing conditions restrictions and lifetime limits. The freed up money will go to a big tax cut for the very wealthy. You didn’t need to see the legislative language to know this. It’s been a failure of journalism to pretend otherwise.

If, however, you want several specific compelling reasons to oppose this travesty, there are any number of reports and commentaries that can help. For example, we learn about several “buried” provisions from an article in the LA Times, in a column that describes the bill as a “poorly-disguised massive tax cut for the wealthy, paid for by cutting Medicaid — which serves the middle class and the poor — to the bone.” Then there’s this:

States will have more authority to reimpose lifetime and annual benefit caps and eliminate essential health benefits. This may be the most insidious provision of the repeal bill, and certainly is the most deeply hidden.

As several Governors–including Republican Governors– have noted, this grant of authority to the states will almost certainly be used, because the deep cuts in Medicaid and other federal funding will leave the states no choice.

The Affordable Care Act also had state waivers designed to allow for innovations, especially in state Medicaid programs. But under the ACA, those waivers could not  lead to fewer people being insured, or to the imposition of higher out-of-pocket expenses. The Senate bill repeals those limitations.

Under the measure, the secretary “must” approve a waiver request as long as it won’t increase the federal deficit. As a result, states would be able to eliminate the essential health benefits that all health plans must provide under the ACA — including hospitalization, prescription coverage, maternity care and substance abuse and mental health treatment. Since only essential health benefits are subject to the ban on lifetime and annual benefit limits, high-cost patients such as cancer victims and sufferers from chronic diseases could permanently lose their benefits in the course of their treatment.

And then there’s pre-existing conditions. As the Times reports,

Protection for people with preexisting conditions is destroyed. Senate Republicans claim in their talking points that the measure protects people with preexisting conditions from being denied coverage or priced out of the market. Don’t believe them…The Senate bill will open the door to states forcing people with preexisting conditions into segregated markets that will lead them to pay far, far higher costs than everyone else….This bill will bring the country back to a system in which insurance only works for the healthy, and the sick can’t afford the coverage they need.

There’s lots more. Older Americans will get hosed; under this bill as currently drafted, older Americans could be charged five times what younger, healthier Americans will pay. Meanwhile, the biggest tax cut for the rich is retroactive; a millionaire who already had booked a $1-million gain on a stock sale, for example, would collect a $38,000 benefit.(Even the Wall Street Journal was aghast at that one.)

And most despicable of all:

In fact, all the measure’s tax cuts taken together, valued at about $700 billion over 10 years, would be almost entirely paid for by the bill’s elimination of Medicaid expansion in the 30 states and the District of Columbia that accepted it.

The bill defunds Planned Parenthood. It cuts Medicaid so drastically that hundreds of thousands of elderly Americans will no longer be able to go to nursing homes, and rural hospitals that depend upon Medicaid will close. It will strip coverage from more than twenty million people, and take us back to the days when people had no choice but to use emergency rooms for primary care. The medical cost curve, which had been coming down under the ACA will once again rise more rapidly than the rate of inflation.

And why? To further enrich the already wealthy–and not so incidentally, to destroy the legacy of America’s first black President.

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Making America Sick Again

With the introduction of its proposed budget, the Trump Administration has continued its effort to cut the ground out from under all but the wealthiest Americans–and especially from under the people who voted for Trump.

Fortunately, that budget displays the stunning ineptitude that is a hallmark of this Administration (Hey–what’s a two trillion dollar math mistake among friends..?) and is unlikely to pass.

We often hear exhortations to “follow the money,” or to “put your money where your mouth is.” Those phrases reflect an undeniable truth of human behavior: whatever our rhetoric, where we commit our resources shows our real priorities.  Trump’s budget not only makes his priorities painfully clear; it reflects his callous disregard for struggling Americans, including those who voted for him.

Time Magazine has detailed the consequences of the savage Medicaid cuts proposed by the Trump budget. Nearly one in four Americans–and 42 percent of Trump voters– rely on Medicaid. The budget assumes passage of the deeply unpopular Obamacare replacement passed by the House and currently pending in the Senate; that measure–which the CBO calculates would cost 23 million Americans their health insurance– cuts Medicaid funding by $839 billion over the next decade. The budget proposal reduces Medicaid by an additional $610 billion.

Those cuts endanger medical access for 74 million Americans.

Medicaid reaches far beyond able-bodied adults out of work, despite the proposal’s rhetoric. The elderly and disabled account for around 60% of Medicaid’s expenditures, with the disabled, including the mentally ill, accounting for a full 42% of spending.

The program is the country’s largest funder of long-term care expenses, covering 40% of the costs, as well as more than 60% of all nursing home residents. For Baby Boomers nearing or past retirement age, these funds are crucial: As MONEY has previously reported, nursing homes for the elderly cost an average of $80,000 annually, and those expenditures aren’t covered under Medicare, the health program for seniors over 65. In fact, because Medicaid absorbs high healthcare costs of people with expensive conditions like dementia, it has kept private insurance around 7% lower than they would be.

Slashing funds also disproportionately affects women and children: one-half of births in the U.S. are covered by Medicaid (that varies widely by state—in Louisiana, 65% of births are covered by Medicaid, according to the Kaiser Family Foundation). The Children’s Health Insurance Program, which covered more than 8.4 million children in 2015, would also see its budget significantly reduced, according to Joan Alker, Executive Director of the Georgetown Center for Children and Families. Medicaid also provides essential health coverage for low income women, particularly women (and children) of color.

And of course, the budget continues the Republican war on women and women’s health by defunding Planned Parenthood–effectively eliminating preventive care (pap tests, breast cancer screenings) for most poor women.

Pointing to the cruelty of this proposal is unlikely to move lawmakers for whom tax cuts for rich people are the highest priority, but you would think they might realize that such a wholesale assault on access to preventive care would wildly increase overall medical costs. (The old adage “penny wise, pound foolish, comes to mind.) Trump’s budget would throw people back to the tender mercies of the emergency room, return us to the days when medical costs and nursing home fees bankrupted families, and ensconce a system in which healthcare is simply a consumer good, available to those who can afford it and too bad for the rest of you.

Destroying Obamacare and slashing Medicaid aren’t even the end of the story: the proposed budget also “severely cuts funding for science and public health agencies, including a $1 billion cut to the National Cancer Institute.”

Notably, the National Institute of Health’s budget would be slashed from $31.8 billion to $26 billion. The Center for Disease Control and Prevention would face cuts of more than $1 billion, including a $222 million decrease in funding to the chronic disease prevention programs, which help people with conditions like diabetes, heart disease, and obesity.The National Science Foundation would face a decrease of $776 million.

Welcome to dystopia.

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Those Pesky Facts

One of my earliest research projects when I entered academia focused on an element of the “Personal Responsibility and Work Opportunity Reconciliation Act of 1996,”  (PRWORA) aka welfare reform. I looked at the consequences of the measure’s invitation to (undefined) Faith-Based Organizations to help government agencies provide welfare services.

Needless to say, the “armies of compassion” envisioned by George W. Bush failed to materialize, since the invitation was based largely on fanciful–indeed, “faith-based”–beliefs about the capacities of the invitees.

I mention this in order to explain my heightened interest in a recent “spat” between Peter the Citizen and Arthur Brooks.

In “The Dignity Deficit: Reclaiming Americans’ Sense of Purpose,” Arthur Brooks, president of the American Enterprise Institute (AEI), emphasizes the importance of work requirements for welfare programs and suggests that the 1996 welfare reform law provides a model for other safety net programs:

Putting more people to work must also become an explicit aim of the social safety net. Arguably, the greatest innovation in social policy in recent history was the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The PRWORA, which became synonymous with the phrase “welfare reform,” made several major changes to federal policy. It devolved greater flexibility to the states but established new constraints, such as a limit on how long someone could receive federal welfare benefits and a work requirement for most able-bodied adults.

As Peter points out, PRWORA changed a number of programs, but what Brooks is lauding is TANF (Temporary Assistance for Needy Families). Peter, like Brooks, is a political conservative; he was a  former member of the Reagan Administration whose “portfolio” was welfare programs.
And he begs to differ.

For the past two years, I have been writing papers as a citizen to highlight TANF’s many problems. My hope is that conservatives will adopt more “rigor” in their assessment of the 1996 law and use evidence rather than ideology in developing reform proposals.

Brooks claims that TANF reduced poverty, and that its “lessons” about “the dignity of work” should be extended to other poverty programs. Peter convincingly demolishes the first assertion, and provides copious data to prove his point. Although he clearly agrees that there are “lessons” to be learned,  the content of those lessons differs significantly from what Brooks suggests.  I really encourage readers to click through and read the entire paper. The exchange illustrates the difference between ideology and intellectual integrity–between seeing what you want to see and seeing what the evidence shows.

What really caught my eye, however, were the following observations (emphasis mine):

TANF’s block grant structure creates a situation in which states don’t have the resources to run meaningful welfare-to-work programs, as the amount is not adjusted for inflation or demographic changes. This problem is exacerbated when state politicians divert scarce funds to plug budget holes….

In fiscal year (FY) 2015, just 25 percent of TANF funds were used to provide basic cash assistance and just 7 percent were for work-related activities, despite the fact that the number of poor families with children was higher in 2015 than in 1996. In many states, TANF has become a slush fund used to supplant state spending and fill budget holes…

Since TANF’s inception, states have used tens of billions of federal TANF dollars to simply replace existing state spending. For example, Jon Peacock of the Wisconsin Budget Project explains how “a significant portion of the federal funding for … assistance is being siphoned off for use elsewhere in the budget, to the detriment of the Wisconsin Works (W-2) program and child care subsidies for low-income working families.” It would be one thing if poverty had declined in Wisconsin since TANF’s enactment, but the poverty rate for children in Wisconsin grew from 14.3 percent in 1997 to 18.4 percent in 2011. If the supplanted funds were used to fund other programs for poor families, the practice would be less harmful, but that doesn’t seem to be what happens in Wisconsin. According to Peacock, “That shell game uses TANF funds to free up state funds [general purpose revenue] (GPR) to use for other purposes, such as the proposed income tax cuts.”

Trump’s budget–which combines utter fantasy with gratuitous cruelty (eliminating Meals on Wheels!?)– contains deep cuts to Medicaid and proposes to  fund what’s left through block grants, facilitating–and probably ensuring– precisely the sort of “shell game” that the states have played with TANF.

Anyone who thinks that the monies sent to the states via Medicaid block grants would all be applied to the costs of providing medical care for poor people is smoking something, and it’s hallucinogenic.

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