Expand and reform Medicaid
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By Margaret Lewis
The 2012 election is over and the Patient Protection and Affordable Care Act remains, in the words of U.S. House Speaker John Boehner, “the law of the land.” Part of this law, as modified by the U.S. Supreme Court, provides substantial federal funding for states to expand Medicaid, the program that pays for health care for low-income people. It is up to the governor and General Assembly to decide if Virginia should do so.
There are voices urging the state to just say “no.” While this option has emotional appeal to many, there is a strong business case for creative, fiscally conservative reform and expansion of Medicaid in the Virginia tradition of good government. Medicaid reform and expansion makes sense because it can:
– Improve the quality of health care in Virginia.
– Control short- and long-term costs of the current Medicaid program, which are growing at an unsustainable pace.
Lewis is chairman of the Virginia Hospital & Healthcare Association and is writing on behalf of the board.
January 14, 2013 - 6:15 AM
I can’t believe we’re seriously looking at EXPANDING medicaid.
I saw an opinion earlier which stated HHS officials thought the cost to Virginia would actually be lower than previously thought. WHEN has a government agency been correct in projecting future expenses on much of anything?
But let’s move forward 5 years when some of the upfront federal funding for medicaid expansion vanishes. The portion the state has to come up with will be a shock to Virginia’s finances. People are already B/Ming about no money for schools and roads as it is. So with a million more on Medicaid than today just where will the funding come from?
Among the 50 states, Virginia is on more sound financial footing than most. It didn’t happen by participating in federal programs without considerable evaluation.
Participating in the expansion effort will allow Virginia to get federal help with pilot projects aimed at improving managed care and other reforms, thus creating a more efficient program. The federal share will drop after three years from 100 percent to 90 percent, but that’s still a good deal. Uninsured people are still costing state taxpayers and privately insured people money when they show up at emergency rooms for care.
2 – never mind that the federal government is broker than the state government…
…and a cost to a taxpayer is a cost to a taxpayer, irrespective of whether it is pulled from Washington, Richmond, or Salem.
When the vast majority of jobs created are low wage service jobs, the expansion of Medicaid is inevitable. Applauding WalMart is guaranteeing the expansion of Medicaid. When wages cannot sustain a labor force it means an expansion of Medicaid. The only real question here is whether we get the federal money or do it on our own backs. It is truly a no-brainer, which is why McDonnell’s reluctance is expected.
When wages cannot sustain a labor force, it means the cost of living is too high. The solution is not to keep throwing money at it (which simply accelerates the inflation cycle), the solution is to strengthen the dollar so it buys more, and things cost less. This means spending less.
Throwing more money at it makes it worse. Inflation by any other name is still inflation.
It also means spending wisely, and continuing with a broken health care system in which low-income people depend on emergency rooms for basic medical services is not wise. We are paying for that, and we’re paying more than we should because that is the most expensive outlet for medical care.
You think we should be able to sustain a nation on millions upon millions of low wage jobs? Really? You are going to blame inflation for Medicaid expansion?
8 – the problem with the current system – pre AND post ACA – is that it focuses on ways to lower the cost of administering health care and not on the cost of actually providing the care itself.
The cost of health care has outpaced inflation – dramatically – since WWII. Coincidentally, health insurance for anything more than just catastrophic events was not common before WWII.
Put differently, health care was available and affordable to just about everyone before health insurers promised that everyone would get full coverage for just about everything (that’s the way it’s devolved, anyway). Get insurers out of the equation; costs will drop – dramatically – and more people will be able to afford it out of pocket.
Sandi, if the cost of living is such that a full-time low-wage earner can earn a living for himself and his family, then yes, you can sustain a nation. That seems pretty self-evident to me.
Really.
Inflation is only part of the equation re medicare. Non-market forces driving up the costs to administer health care are also part of the equation. And there is significant overlap.
Really.
If low income people are depending on ERs for their care, it’s because they are allowed to. And there’s a good part of your medical cost problem.
We’ve got free clinics, New Horizon and Va. Premier in the area…and ERs are full. ER- they don’t make me pay and I don’t have to schedule an appointment. Nuthin’ could be finer…..
It’s true that some of the provisions in ACA people love to hate, like the mandate, are related to the deal Obama made with the insurance companies. Are you advocating for a single-payer system?
Free clinics are taxpayer subsidized. Nothing is free.
12 – Christina, the alternate to the mandate that everyone be covered by either an insurance company or the government was that everyone be covered by the government (single payer). That’s not really an alternative, so no, I am not advocating for a single payer system; I have never advocated for monopolies, whether government or private sector. Besides, either alternative comes with a massive administrative burden, ultimately borne by the taxpayers.
I’m saying let the market determine the price and coverage of health care, not insurance companies, not the government. Without insurance companies (or Uncle Sam) driving up costs by guaranteeing that everybody is covered for darned near everything (as it has devolved), prices will drop to the level of affordability. People will have insurance, if they want it, for catastrophic events, but won’t need it for basic things.
13 – good example, helps to make my point.
And your proposal for how we “Get insurers out of the equation” is?
You said “…it focuses on ways to lower the cost of administering health care and not on the cost of actually providing the care itself” then you said “Non-market forces driving up the costs to administer health care are also part of the equation”. Which is it?
When was the last time when “the cost of living is such that a full-time low-wage earner can earn a living for himself and his family” and what would that wage translate into today?
Are you saying that Medicare and Medicaid should be eliminated?
Sorry, that’s for 89Hoo.
16 – the two statements are not contradictory. You don’t fix an administrative nightmare by adding another layer of administration.
When was the last time when “the cost of living is such that a full-time low-wage earner can earn a living for himself and his family…”
When we had sound money.
“…and what would that wage translate into today?”
Couldn’t tell you (I don’t have a crystal ball), except to say “enough for a full-time low-wage earner to support himself and his family”….and isn’t that what matters most?
17 – no, I wouldn’t yank the safety net. There are those to whom it has been promised, and who depend on it, and we owe it to those folks to keep our promise. But don’t make it mandatory (either in terms of participation or contribution) for future generations.
The market already drives prices under the current system and will continue to do so under ACA. The problem is that new medicines and medical procedures are expensive and more and more people are squeezed out of that market.
21 – no, the market doesn’t entirely drive prices. Prices are inflated by non-market forces (mandatory participation in health care plans, malpractice lawsuits, inflationary monetary policy). I doubt technology plays that big a role; it usually has the effect of lowering costs, especially as it becomes more and more available and refined.
I don’t understand how you get the insurers out of the equation. More importantly, I don’t understand who would do that. The government?
23 – in all honesty, Christina, I don’t think there is a magic wand to get insurers out of it. In order to do that, we would have to unwind decades of ingrained market intervention from government and crony capitalists.
As said above, health insurance for routine and maintenance medical care (i.e., anything other than catastrophic) came about in WWII when Uncle put wage controls in place and employers started paying for health insurance as a way to get around the wage ceilings so they could pay more so they could attract workers (damned evil capitalists).
But there are options.
How to end it? A lot of employers use health benefits to attract and retain employees, but it doesn’t have to be insurance per se. What about a medical savings account of some sort? Like a cafeteria plan or an HSA (I’m sure there are other types, too).
We offer Health Savings Accounts (HSA), which is sort of like an IRA that can be used without penalty for health expenses, prescriptions, etc. It is pre-tax, and what is not used is rolled forward (like an IRA) for use at retirement. We use it for meeting our deductible (which is pretty high). This gives ME control over how my health care money is spent. Right now, there is a cap as to how much one can contribute to an HSA ($6450 for a family in 2013). How about we eliminate the cap and give people more control? I would gladly take the $150.00 a month I pay for insurance and plop into that HSA if the limit were higher. If I don’t need it all, it rolls over. If I have to borrow above it (unlikely, but possible) I can repay the load with future contributions. And I have catastrophic insurance for, well, catastrophic events. That also helps provide for the future, as any money I don’t use now is available later and after retirement. Employers can set up matching plans, etc.
As to WHO would want to do that, anyone who pays through the nose for insurance and is tired of not getting his money’s worth.
23, 24 – I have seen many doctors give a discount when I pay cash, because they don’t have to deal with the paperwork the insurance companies and/or government requires. Once people realize they can pay less for their medical care, NOT take a gamble they’re going to get sick (which is all that insurance is) and not have a slice go to an insuring agency, it will become more and more prevalent, and prices will drop as more and more doctors work to accommodate them.
Understand, this will not eliminate health insurance, or health insurance agencies, and people can still get insurance if they want (and pay for it with their HSA), but it would give those who wanted more control over their own money some options. While lowering prices for everyone.
I do not know how else to say this, but I think you are dreaming 89Hoo. None of that is going to come to pass and FYI, the high deductible plans are still very expensive and workers making 10-12 dollars an hour cannot even afford them. A $5,000.00 deductible plan will not pay for one visit, one prescription or one test (except for one wellness check up annually) until you meet that deductible and it is still very expensive. It is certainly not goading anyone to visit a doctor often (as much fun as that is). IDK where you are getting $150.00 a month for coverage unless you are under 25 and you are not getting family coverage for that.
The average hourly workers cannot afford any HSA either.
You will never get the insurance companies out of the equation and if you did something else would have to take their place (like huge local medical facility monopolies). If you have thought this through I do not see how.
#2 & #3 Right, it’s only money (let’s print some more).
#17 Please quit lumping M-care & M-caid. The only real comparison is that both have been bungled.
I paid for my M-care, and regardless of opinions on safety-net, social benevolence, etc., will not be compared to welfare recipients.
26 – no, Sandi, it likely will not happen, as enough sheeple are resigned to being wards of the state that they drag the rest of us down. Nope, won’t happen, at least not the way I laid out.
What WILL happen (may already be happening) is a black market for medical care, where people who need care but are unable to get – or afford – what they need through the State/insurance monopolies go, pay someone directly (under the table), get the treatment they need, and go on their merry way.
I’m in favor of scrapping the whole thing and moving to a single-payer system like many other industrialized nations have done. Our inability to get a handle on poverty in this country is shameful. And what’s all this talk about inflation? I don’t think we have had truly significant inflation since about 1980, despite enormous increases in the costs of some things such as education and health care. Perhaps it is because fuel costs have remained so low.