The Coming Cave-In on Medicaid


Mike King headshot 2This blog is hosted by the author of “A Spirit of Charity: Restoring the Bond between America and Its Public Hospitals,” available on Amazon. com and Seattle Books.

From Mike King

If you want to handicap what kind of Medicaid expansion Georgia and other Southern states that have thus far obstructed Obamacare’s efforts to reach more of the poor and uninsured will eventually embrace, Kentucky is a good place to watch.

The Bluegrass state was, until this year, the very model of how Obamacare and the Medicaid expansion contained within it has significantly reduced the number of people without insurance. Yet last November, voters elected  new Republican governor who campaigned to end the expansion and the state’s highly successful health insurance exchange. Not surprisingly, upon taking office, he began to reconsider both promises, realizing the amount of money the state would lose.  Moreover, it could have dawned on him that his promise put 400,000 or so Kentuckians back into the ranks of the uninsured, jeopardizing their health and turning their care over almost exclusively to the state’s public hospitals who will have no recourse other than to try to recoup their losses by raising local taxes or their charges to privately-insured patients.

So the new governor, Matt Bevin, has spent the first six months in office trying to fashion an alternative to the Medicaid plan now in place in Kentucky. He wants to seek a waiver from the federal government that creates a new set of rules for who qualifies for Medicaid and what is expected of them. Those new provisions are straight out of the Medicaid-is-a-Welfare-Program playbook, popular among Republican office holders in the South. It would, among other things, require new Medicaid enrollees to work, or be seeking jobs, or volunteer opportunities in order to qualify for coverage. It would also charge them premiums and deny coverage for six months, and require re-enrollment, if they fell behind on their premium payments.

Sound familiar? Republicans in the South have over the years conditioned many social welfare programs — from unemployment to food stamps to temporary assistance for needy families — on such moral hazard principles. It’s not a new thing. It goes back decades. As A Spirit of Charity details, in the post-New Deal era, Southern politicians looking to roll back some of FDR’s most successful programs, lobbied long and hard for allowing the states to set the rules for who gets government assistance and when. In those days, race played a significant role in the decision making. (A good argument could be made that it still does in some places.) But the basic premise — that able bodied Americans should work and save money and provide for themselves and not be dependent on the government — still holds for many political leaders in the South. When Medicaid was created as a health care program for the poor in 1965, the states were given considerable leeway in deciding who qualified for it and how much they would pay doctors and hospitals who provided care to them. The 2012 Supreme Court decision that made Obamacare’s Medicaid expansion an option for the states reinforced that when it comes to care for the poor the states still have a lot of say.

But the prospect of losing billions of dollars in federal funding for Medicaid expansion is simply too much to ignore, especially now as the Obama administration draws to a close and the political value of mindless bashing of anything connected to Obamacare is fading fast. Even in Georgia, where obstruction of Obamacare has been an organization principle of Republican politics, the tide is turning.

So be on the lookout for workfare/healthcare demands on new enrollees if Georgia and other southern states start creating new Medicaid expansion plans. Look, as well, for premium-sharing plans so that the poor will have to pay something to get coverage. (And yes, it’s not a stretch in this region of the country for our political leaders to demand drug testing for adult Medicaid enrollees.)

The question then becomes, will these requirements pass muster with the Obama administration, or a Democrat in the Oval Office in January of 2017?

The answer, more than likely, is hell-to-the-no.

Medicaid is not a welfare program. Placing work and earnings requirements on enrollees destroys the purpose for its existence. Decades of trying to do just that have demonstrably resulted in millions of Americans unable to afford health care access. There is no science to show that demanding such requirements will succeed in moving the poor from Medicaid to private insurance. Recent history has proven quite the opposite. As more and more employers ditch coverage, especially to part-time workers like those who make too much now for Medicaid, the need to be covered by a government plan has become more acute, not less.

This is not to say that a take-it-or-leave-it approach to Medicaid as we know it now is good public policy either. The program has its flaws and needs serious reconsideration. States that want to seek waivers trying to find better systems of health care delivery — the use of medical homes, telemedicine, nurse practitioners, physician assistants and other allied health professionals where there are shortages of primary care doctors — should (and have been) encouraged. Put those ideas and others in a waiver application and they will get a fair hearing.

No one disagrees that there is a huge need to make Medicaid a better, more effective program. Doing so will bring this country closer to the goal of joining the rest of the economically developed world when it comes to guaranteeing health care for all its citizens. But if your state’s waiver plan is premised on the notion that the poor are the problem and they should be paying more for their care, then you are about 50 years too late to the debate. You’ll need a better plan than that.