‘Elephant in the Room’
Medicaid Delivers as Obamacare Survives
With its expansion under the ACA, Medicaid now pays for half of all births in America.
Suddenly, the program for the poor that began in 1965 seems less like a scapegoat for politicians looking to score rhetorical points and to shore up state budgets, and like it may join Medicare and Social Security on the third rail in American politics—touch it and you die.
To understand attitudes about Medicaid, I consulted experts from three leading think tanks, the long established and mostly centrist Brookings Institution, the much newer and avowedly liberal Center for American Progress, and the venerable right-leaning American Enterprise Institute.
They all support Medicaid as a critical part of the nation’s safety net. The program pays for almost half the births in the country, a figure that is surprising because half of all women aren’t poor. In some states, the percentage is much higher, with 72 percent of births in New Mexico covered under Medicaid according to the Kaiser Family Foundation 2015 figures.
A higher poverty rate in some states is reflected in the higher percentage of Medicaid births, but another reason is central to the debate in Washington: Medicaid expansion. Increasing the number of people eligible for Medicaid is at the core of Obamacare. More people gained health insurance through Medicaid than through the state exchanges that were set up with considerable fanfare in 2010.
Conservatives view this layering of more groups into Medicaid as an intrusion of government into people’s lives. Medicaid now covers more than 70 million people, far more than the number of Medicare enrollees, currently 44 million (and expected to rise to 79 million by 2030).
What rankles Vice President Mike Pence and many of his conservative colleagues in government is that able-bodied adults without children have gotten coverage in the 32 states and the District of Columbia that accepted Medicaid expansion under Obamacare. Pence told the National Governors Association meeting in Rhode Island last week that these adults should be moved into jobs and not rely on government assistance, a familiar refrain that reflects the GOP’s attitude that health care is not a right but a privilege that has to be earned.
Pence was one of 10 Republican governors who accepted the Medicaid expansion that made health care coverage available to all adults at or below 138 percent of the poverty level, which is $16,643 for an individual. If the GOP’s health care bill were implemented, nearly 15 million Americans would lose their Medicaid coverage by 2020 according to the non-partisan Congressional Budget Office.
“Most people don’t know the group with the highest frequency on Medicaid is kids, but they’re relatively inexpensive,” says Ron Haskins, co-director of the Center on Children and Families at Brookings. “Way more is spent on the elderly.” A little known fact is that Medicaid pays for 64 percent of nursing home bills, including for middle-income seniors who outlived their savings.
Baby boomers look to the government to give their parents a dignified ending, and rural nursing homes would have to close without Medicaid reimbursements, as Kansas Senator Jerry Moran pointed out in withdrawing his support for the GOP bill.
According to the Center for Budget and Policy priorities, two-fifths of Medicaid enrollees are children, but they account for less than one-fifth of Medicaid spending. Paying for almost half the births in the country does not break the bank, says Haskins, noting that Medicaid covers prenatal care, which increases the likelihood of a healthy baby and mother, and saves money on social services in the long run.
He cites polling that found 40 percent of Medicare recipients have no idea their health coverage is funded by the government. During Tea Party protests in 2009, seniors held signs that said, “Keep your government hands off my Medicare.”
In contrast, the debate about Medicaid comes down to taxpayer money. “Everything is about dollars and cents, and it should be about people’s lives,” says Jamila Taylor with the Center for American Progress. “Why would we take money away from women and families who need it the most? Cutting the program and essentially gutting it over the next ten years is going to hurt a lot of people.”
Robert Doar with AEI has a different take. He calls Medicaid “this huge, gigantic elephant in the room” that takes every available dollar. “And while I like the Medicaid program—it provides care to people who really need it. It was making it hard for my state, or any state, to invest in other things that are really important.” Before joining AEI, Doar headed the Human Resources Administration in New York City, appointed by Mayor Bloomberg. Prior to that, he was New York State Commissioner in the Office of Temporary and Disability Assistance, where he gained a reputation for innovative approaches to issues related to poverty.
He says Medicaid is no longer the outcast compared to Medicare and Social Security, that it enjoys backing from powerful interest groups. “When you cut Medicaid, you’re up against the hospital industry, and while they’re not quite as powerful as the teacher’s union, they’ve got clout,” he says. “The health care industry likes Medicaid. When they provide care, they get paid. Medicaid is a reliable payer.”
Medicaid dwarfs everything else in the safety net, says Doar. In New York, Medicaid cost more than $30 billion a year compared to a little more than 1 billion for food stamps, and less than 1 billion for child care. “A reduction in the rate of growth could enable us to do other important things for poor Americans,” he says.
When it’s pointed out that the GOP bill would have used money from Medicaid savings to fund tax cuts for wealthy Americans, Doar says, “That’s not my thing. I’m not going to go there. I would like to re-direct dollars to job placement or employment services.”
The broad agreement among these experts extends to the free birth control provided under Obamacare. Under the bill that was before the Senate, Medicaid patients would no longer be reimbursed for visiting Planned Parenthood. Republicans claim women can easily access other providers, but the Washington Post in an editorial called that yet another example of “magical thinking” when “in truth, millions of women would lose access to critical health care.”
Teen pregnancy rates are down 70 percent from twenty years ago, “which is huge, and I am hopeful that progress will continue,” says Doar, noting that figures announced earlier this month showed another 9 percent drop.
According to Planned Parenthood, more than 55 million women have access to birth control without copayments, which saved them an estimated $1.4 billion in birth control pills in the first year alone. When they couldn’t get the 50 votes needed to repeal and replace, the GOP crossed the Rubicon. Obamacare’s Medicaid expansion is here to stay, at least for now.