In previous columns, I have discussed general principles of what is needed in health-care reform. The new Republican plan just revealed in the Senate still does not address these issues. It introduces new compromises with fewer tax cuts for the rich but still penalizes low-income people. We are awaiting input of the Congressional Budget Office of the assessment of the bill’s impact on how many people will lose coverage.
The biggest impact will be on Medicaid, which is still slashed under this bill, cutting nearly $800 billion in the next 10 years. It will immediately terminate funds for expanded Medicaid and cap funding for the rest of Medicaid. The impact of this will be enormous. Medicaid covers about 20 percent of Americans. It covers 40 percent of all children and 50 percent of all births. Medicaid covers the nursing home bills for 60 percent of all Americans in nursing homes. Fifteen million people will lose Medicaid coverage.
It is particularly galling to cut Medicaid selectively. U.S. Sen. Ron Johnson (R-Wisconsin) has excused the attack on Medicaid because of the fact that Medicaid spending doubled from $200 billion to $400 billion from 2008 to 2015. He is actually referring to the federal contribution, and in reality, it has only risen to $344 billion. Excusing that minor error, one needs to look at this in the context of what has happened in the rest of the health care market. One of the biggest reasons that Medicaid costs went up is because enrollment went up with Medicaid expansion by 47 percent in that time period.
Because of the increased enrollment, it is disingenuous to look at only total costs. One must look at the cost per capita — how much money was expended on caring for each person. Between 2008 and 2015, Medicaid total expenditures rose 58 percent while private insurance expenditures rose 33 percent and Medicare rose 38 percent. In that same period, the number of Medicaid enrollees rose 47 percent and private insurance enrollees rose 0.7 percent. Calculating the percent rise in expenditures per enrollee reveals the true story. From 2008 to 2015, per capita Medicaid expenditures rose 8 percent, private insurance expenditures rose 33 percent and Medicare rose 13 percent. Medicaid was therefore the coverage program with the lowest rate of rise (inflation) per capita. Private insurance rose four times faster.
Not only was the rate of inflation in Medicaid spending less than that of private insurance, the actual per capita spending in Medicaid is lower than that of private insurers, adjusting for the increased health needs of Medicaid enrollees. If the Republicans were really concerned about the rate of rising health-care costs, why are they picking on the program with the lowest cost per enrollee and the lowest rate of inflation?
You may feel that if you are not on Medicaid, you will not be affected. This is not true. The first Senate version selectively increased the costs for low-income and the elderly by decreased subsidies and charging more for older persons. The new bill puts some money back for subsidies but does not change the increased rates for older people. We do not yet know how many people will not be able to afford coverage in the individual market and therefore lose coverage, but it is likely to be substantial.
The new U.S. Sen. Ted Cruz (R-Texas) amendment allows insurers who do provide an ACA-compliant policy to also offer cheaper policies with poorer coverage. This will further fragment the marketplace leaving older people, many of whom have chronic conditions, in their own pool with greatly increased costs. Though the cheaper policies will be appealing, healthier people who elect these policies will have unpleasant surprises when they become ill or have an accident and find that they have no coverage or poor coverage. Problems caused by substandard policies were the impetus for the ACA to specify a basic set of benefits in all policies. People with no insurance or poor insurance still have accidents and illness which will be treated in the emergency room. The uncovered costs which are generated will not disappear but will be shifted to those who do have insurance or back into uncompensated care funds reimbursed by government (i.e. us).
The whole concept of insurance is to share risk. Slicing and dicing the policies violates that concept. One of the favorite things for conservatives to complain about is why they should pay for maternity coverage if they are not a young woman. It is interesting to note that, except in one instance documented in the Bible, a man is involved in every pregnancy. Indeed, every person’s existence is owed to a maternity event.
This bill does nothing to address the fundamental cost drivers of our health-care system, such as the fee-for-service system which encourages unnecessary treatment and over-testing, for-profit insurance companies, a fragmented system and out of control pharmaceutical costs. Real health-care reform will require addressing these cost drivers and fundamentally reshaping the health-care delivery system. These are difficult problems but they are the problems that need to be addressed.
This bill is still not what the American people need or deserve in order to obtain good health care for all.
Jerry Knirk is a freshman representative from Carroll County District 3: Tamworth, Madison, Freedom and Albany. He lives in Freedom.