Conservatives are in a box. Having run on demonizing Democrats for reallocating 500 billion out of Medicare Advantage, they can’t attack Medicare. They just spent two years and hundreds of millions of dollars promising to keep spending more and more and more on Medicare, forever. Too, seniors vote, in the crucial states of Ohio, Florida, Wisconsin and Pennsylvania. The VA is probably out, for obvious reasons. That leaves Medicaid.
Here’s a WSJ op-ed my sister sent me, ObamaCare and the Medicaid Mess, and it’s a good example of the tactics we can expect to see in the War On Medicaid.
First, to get a broad view of the fundamental error, here’s The Incidental Economist.
The reason that the PPACA puts 20 million more people in Medicaid is that it was cheaper than putting them in the exchanges to get private insurance. Let me say that again – it was cheaper.
But let’s look at specifics. Here’s the claim:
Medicaid currently covers 53 million people at an overall cost of $373.9 billion (states are responsible for about half). But starting in 2014, ObamaCare rules will add about 20 million more, according to Richard Foster, the program’s chief actuary.
With “ states are responsible for about half ” Suderman omits the fact that the PPACA provides federal funding for Medicaid at a much higher rate than 50% through 2019. He just doesn’t mention that additional funding. It’s a huge omission.
Conservatives have wildly exaggerated the cost to states of of Medicaid expansion over and over, and the claims have been debunked over and over.
The federal government will bear virtually the entire cost of expanding Medicaid under the new health-care law, according to a comprehensive new study by the Kaiser Family Foundation that directly rebuts the loud protests of governors warning about its impact on their strapped state budgets. Governors of many of those states have predicted fiscal calamity for their budgets, and some have cited the Medicaid expansion in the suits they have filed against the new law, saying it violates their states’ rights. But the Kaiser study released Wednesday predicts that the increase in state spending will be relatively small when weighed against the broad expansion of health coverage for their residents and the huge influx of federal dollars to cover most of the cost. Even the small increase in Medicaid costs may be canceled out by the savings states will enjoy from no longer having to subsidize the uncompensated care of uninsured people who will be on Medicaid, study co-author John Holahan said.
And on to Healthy Indiana, and the obligatory plug for Mitch Daniels that is in every conservative editorial:
In 2007, for example, Gov. Mitch Daniels created the Healthy Indiana Plan, which funded 95% of the cost of consumer-directed health savings accounts for low-income residents. Healthy Indiana now covers about 43,000 low-income people not otherwise eligible for Medicaid under federal rules. The program is also popular among state employees. It’s funded by cigarette taxes and Medicaid dollars thanks to a federal waiver. Mr. Daniels has asked the Obama administration for permission to use Healthy Indiana as a way to expand the state’s Medicaid program.
Healthy Indiana is a flop. Here’s the part Suderman left out:
The state began enrolling adults in the plan in January 2008. As of June 2008, over 53,000 adults had applied.
It’s now February of 2011. How many are covered under Healthy Indiana? 43,000. 830,000 people in Indiana are uninsured. Healthy Indiana, more than three years after it was launched, covers 43,000 of that 830,000.
Let’s look at how it was funded and whether it saves money.
Here’s Suderman again:
It’s funded by cigarette taxes and Medicaid dollars thanks to a federal waiver.
Following requests for federal assistance from states seeking to expand publicly-funded health coverage for the uninsured, the Bush Administration announced its “Affordable Choices” initiative in January 2007. Affordable Choices provides no new federal funds to states. It simply permits states to divert federal funds now being used to support hospitals that care for the uninsured and use those funds instead to help uninsured people purchase “basic private coverage” — that is, coverage provided through private health plans rather than Medicaid.
How much did Mitch Daniels divert out of the fund Indiana uses to reimburse hospitals for uncompensated care to Healthy Indiana?
And in order to pay for the 44,000 Indianans in the Healthy Indiana Plan, the state took $50 million from funds that it uses to help reimburse hospitals for uncompensated care. In other words, 40 percent of the state’s uncompensated care funds were spent on only 5 percent of Indiana’s uninsured population.
Does the private program save money over Medicaid? Nope.
First, many beneficiaries have to pay a lot more out of pocket than they would if they had traditional Medicaid coverage. Nonpayment has been the No. 1 reason for terminating beneficiaries from Healthy Indiana since the program began in 2008, with up to 35 percent of beneficiaries in certain income levels failing to make their first payment.
Second, providers serving Healthy Indiana beneficiaries have indeed been paid more than they would have if the beneficiaries had been covered under Medicaid. However, Healthy Indiana covers only about 44,000 Indiana residents, while more than 830,000 Indianans are uninsured.
Meanwhile, for those actually in the program, the state paid $75 more per month in 2009 for the healthiest group of Healthy Indiana enrollees than it did for comparable adult Medicaid beneficiaries, even though Healthy Indiana beneficiaries are ineligible for many expensive services, such as maternity care, that Medicaid beneficiaries receive.
Mitch Daniels is going in the wrong direction. He’s spending more to cover less. Why does he want to expand this program, again?
Because private is better than public, and state “innovations” are better than federal rules. They just are, so shut up. Mitch Daniels will happily pay more for less because….private is better than public, and anything is better than giving the Patient Protection and Affordable Care Act a chance to work, if you’re a partisan Republican.