6:15 PM CDT, July 9, 2012
If you didn’t read yesterday’s post about Medicaid and health care reform in which I interviewed University of Chicago professor Harold Pollack, I recommend you check it out, even if you prefer reading this blog when I’m more talking about drinking in geothermal spas and such.
There are just a few more points about the Medicaid expansion in health care reform that I think bear going over, and why professor Pollack is correct that most governors threatening not to participate likely will. The most obvious historical example is the creation of Medicaid itself. If you’re not familiar with the history, here’s a good recap. Initially only six states participated, but the lure of free money from the federal government eventually got the rest of the country to begin Medicaid programs for its poorest citizens.
Because the health care reform offers a huge amount of money for states to expand Medicaid, the reddest states with the stingiest Medicaid programs will actually get the best deal. Take deep-red Texas, where governor Rick Perry says his state will decline the federal money and where you’re only eligible for Medicaid if you make 26% of the poverty line, which means there are individuals who make just $3,000 a year who don’t qualify for Medicaid. Kevin Drum and Ezra Klein explain this well, but I’ll try to do the Cliff’s Notes version.
Even after 2020 when the government is still paying for 90% of the Medicaid expansion (they pay 100% for the first three years), Texas will probably end up contributing $3 billion. This is not a dramatic amount of money to say the least; however, here’s the important thing to remember: Texas may end up saving money overall on this deal.
That’s because Texas already bears the cost of its uninsured in other ways whether such as emergency care in hospitals or other state programs for the elderly and indigent. One of the points that never seems to get through to certain people in this debate is that it makes much more sense for people to have access to care early in order to take care of problems before they become expensive emergencies.
Furthermore, the critique of Medicaid reimbursement rates may be fair, but health reform’s expansion also includes (as Pollack noted) a rise in those rates for primary care providers. It also includes a provision to create the Federal Coordinated Health Care Office, which I know, I know more bureaucracy, death panels, yada yada, but which actually will oversee efforts to bring down costs for “dual eligibles”—people who qualify for both Medicare and Medicaid. These people make up 40% of Medicaid’s spending even though they are only 15% of its recipients.
The idea being that if you have these people’s care being better coordinated you can both save money and lead to healthier outcomes.
Using Medicaid as an example over the last two days, I hope I’ve in some way illustrated the incredibly dense, complicated nature of our health care system—a system that was exploding in cost while not delivering care to everyone and bungling that care even for the people who are insured. Obamacare for whatever its faults was the most serious effort to tackle the daunting number of problems and complications within this system. It took an enormous amount of work, haggling, and yes, political courage to push it over the goal line, while it's opponents made nonsensical demogoguery the norm and poisoned a huge chunk of the country against it--even those people who will benefit enormously from the new provisions.
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