Home > Uncategorized > The Destruction of Medicaid – posted 7/9/2017 and published in the Concord Monitor on 7/16/2017

The Destruction of Medicaid – posted 7/9/2017 and published in the Concord Monitor on 7/16/2017

Since the Republican Senate health care bill was released, there has been much discussion about its worst aspects. Is it the cutting 22 million people off health insurance? Is it doing away with pre-existing condition protections? Or is it the attack on essential benefits so health plans would no longer include key content like mental health or substance abuse treatment? I think it is none of these.

The worst aspect is what the Republican bill does to the Medicaid program.

Medicaid currently provides care to 74 million people, including the most vulnerable among us. The Republican Senate bill strips the entitlement from Medicaid. That alone would be devastating to low-income people, women, children, seniors, and people with disabilities.

What does that mean to strip the entitlement? It means that there will be no guarantee of Medicaid services for the needy and vulnerable in New Hampshire and across America.

At present, Medicaid benefits cannot be taken away without due process of law. Individual Medicaid recipients have statutory and regulatory rights and a property interest under the Constitution.

As a result, Medicaid recipients also have strong notice and appeal rights. These protections have been built up over the last half century. There is an extensive body of case law delineating these rights. Medicaid recipients can appeal any unfair or improper denial of service through an administrative process, including fair hearings. If needed, Medicaid applicants and recipients, pursuant to their rights, can appeal to federal and state court as well.

The Republican health care plan in either the House or Senate version does away with these rights and demolishes a 52 year body of law. Instead of an open-ended assurance for states, Medicaid would become a discretionary program. Whether the Republican plan is based on block grants or per capita caps, both of which would cap the federal funding for Medicaid, access would depend on money not running out.

These changes would be a huge deal to all individuals on Medicaid as well as those applying for the program. You would go from being a claimant with a well-defined set of rights to being a beggar and a pawn in rich peoples’ political games. Since these changes are buried in the complexity, claimants will not know until it is too late that their rights have been eviscerated.

This is an example of the deconstruction of the administrative state Steve Bannon has talked about. It is also Paul Ryan’s Ayn Rand dream come true.

In contrast to current Medicaid which was designed to be a countercyclical program able to respond to downturns in the economy and state-level emergencies, the Republican plan would set a base year spending level. Then an index would be used to set yearly growth rates. These capped spending levels would cover a falling share of actual costs over time. If and when money ran out, and it would, the consequence would be cuts. States would have to decide whether to terminate eligibility categories (such as pregnant women, children, seniors or people with disabilities) or eliminate coverage for vital services (like prescription drugs, mental health, inpatient medical services or cancer treatment).

Block grants and per capital caps set a fixed allotment for each state. They leave states at high risk for enrollment increases and for numerous other cost drivers such as medical innovations, new health conditions, disease outbreaks, and the health impacts of any natural disaster.

Credible experts at the nonpartisan Congressional Budget Office estimate the Republican Senate bill would cut Medicaid by $772 billion and reduce enrollment by 15 million people over 10 years. You have to ask: what happens to those people?

The Republican Senate bill also would end the Medicaid expansion which has allowed 31 states and the District of Columbia to provide coverage to 11 million low income adults. Because of the Medicaid expansion, we are at an all-time low in the number of uninsured people in the United States.

The Medicaid expansion has been a tremendous bargain for the states that have adopted it. While some complain that states pay any share of the cost, the Medicaid expansion limits state matching dollars to only 10% of the total cost. The federal government picks up 90% of the cost. By any fair evaluation, that is a great deal for the states. Typically in Medicaid, the federal government match is 57%.

Overall, Medicaid is now the largest source of health insurance coverage for individuals with substance abuse disorders, including opioid addiction. Since mid-2014, 23,000 people in New Hampshire have received substance abuse services from Medicaid. Given the magnitude of the substance abuse epidemic, it makes zero sense to end such an effective source of treatment.

I do not believe the far-reaching consequences of the Republican Senate bill have been sufficiently grasped. The bill goes much farther than repealing Obamacare by cutting and restructuring the Medicaid program as a whole. It undermines what has been an essential component of the safety net.

To comprehend the harm, more needs to be said about the value of the current Medicaid program. It is not well-understood.

New Yorker writer Atul Gawande had this to say about Medicaid:

“It is immensely popular and works well. It provides coverage for sixty per cent of disabled children, and maternity coverage for half of pregnant women. Two-thirds of nursing-home residents end up relying on Medicaid coverage after their savings are spent. Among adult Medicaid recipients, sixty per cent work, and eighty per cent are part of working families.”

Medicaid is really the only insurance affordable for low-income people. It has been a successful joint federal/state partnership. Still, states have much flexibility in how they design their Medicaid program. There are both mandatory and optional services. States already decide what optional services they desire.

Medicaid services have to be sufficient in amount, duration, and scope to reasonably achieve the rehabilitation and treatment purposes of the statute. Also, services have to be state-wide so that care is geographically available.

Medicaid has been designed to serve underserved and vulnerable populations. Much thought over many years has gone into the evolution and improvement of Medicaid which has a lengthy history of popular and bipartisan support. President Ronald Reagan, a hero to conservatives, increased Medicaid coverage for lower-income and vulnerable Americans three different times. It is hardly conservative to take a meat cleaver to this intricate structure.

The Republican Senate bill uses the savings from Medicaid and from cutting marketplace subsidies to pay for $563 billion in tax cuts primarily for the wealthy, insurers, and drug companies. It is no surprise the Senate has had no public hearings and did the bill-writing entirely behind closed doors.

The history of block grants is that their structure enables deeper cuts over time. I see no reason why that would not be true with Medicaid.

We are at a truly fateful time for health care in the United States. President Trump campaigned on a specific promise not to cut Medicaid. The Republican Senate bill must be defeated.

Categories: Uncategorized
  1. Pat
    July 9, 2017 at 4:24 pm

    Well said, as always, Jon. Your last piece was sharp, too. Hope you are well.

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