A Good Day for Medicare--and Medicaid Too?

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JONATHAN COHN MAY 25, 2011

A Good Day for Medicare--and Medicaid Too?

The results from Tuesday’s special election in New York demonstrated the popularity of Medicare and unpopularity of Republican plans to dismantle it. But neither fact should be surprising. Medicare is a universal program for retirees: Everybody has an obvious, direct stake in its future. And the Republican plans for Medicare amount to privatization. Everybody understands what that means and most find it scary.

But Medicare isn’t the only program on the Republican target list. Medicaid is, too. And its political position has always seemed more precarious. For one thing, Medicaid a means-tested program: If you’re not poor or disabled, you won’t qualify for it. As a result, more affluent Americans might easily conclude the program matters less to them than Medicare does.

In addition, Republicans have described their Medicaid proposal as an effort to make the program more flexible. It’s a misleading claim or, at least, a selective one. The program would transform Medicaid from an entitlement to a block grant, and then reduce its funding. The almost certain impact would be severe reductions in the program's generosity and expanse. But “flexibility” sounds a lot less threatening than “privatization.”

But sometimes, the public turns out to be more aware than so-called experts like myself think it will be. And this seems to be one such case.

In a new poll from the Kaiser Family Foundation, 60 percent of respondents said they oppose Republican Medicaid plans and only 35 percent said they support them. (The rest responded “don’t know.”) But even more striking were the responses to follow-up questions. When the Kaiser Foundation asked respondents whether Medicaid was important to them or their families, almost half (49 percent) said yes. Of those, 63 percent said they knew somebody who’d once gotten insurance from Medicaid, and 58 percent said they knew somebody who’d paid for long-term care with Medicaid.**

Both findings are consistent with how Medicaid has evolved. It’s a program for poor people without insurance, yes, but many more people fall into that category than you might realize. There are, first, the working-age Americans, along with their children, for whom Medicaid provides basic health insurance. And then, there the elderly and the disabled, for whom Medicaid provides supplemental coverage (to pay for the deductibles in Medicare, for example) or long-term care insurance (most famously, to pay for nursing homes). In many cases, these are people who were not poor until they needed long-term care, spent down their savings, and eventually became eligible for Medicaid once they ran out of money. Middle-class people frequently learn about this when it happens to an elderly relative, creating a financial crisis that ends up involving the entire family.  

Of course, popular support alone won’t save Medicaid from Republican designs. Elected officials have to fight for it, too. And more than one Medicaid supporter I know has wondered whether the administration, seemingly so determined to cut a deal with Republicans on deficit reduction, was up for that fight. But Medicaid has its friends in the administration. One of them is Jack Lew, director of Office of Management and Budget and a well-known advocate for the program. Another is Gene Sperling, director of the National Economic Council—at least based on what he said Wednesday, in response to a question during the Peterson Foundation’s 2011 Fiscal Summit. A transcript, provided by the White House, is below the fold. It’s worth reading in full.

None of which is to say Medicaid is totally safe. Precisely because the program already pays so little, even modest cuts to the program could be devastating. (Further cuts to Medicare, by contrast, might not have the same effect, depending on their size and structure.) But the poll and today’s statements from Sperling suggest the program is not quite as vulnerable as many of us feared.

**Update: I originally misread the report and, as a result, misstated the results. Specifically, I thought -- and wrote -- that 63 percent of all respondents said they knew somebody who'd used Medicaid for regular insurance and that 58 percent of all respondents said they knew somebody who'd used Medicaid for long-term care. As the item now states, those were simply the proportions among those who thought Medicaid was personally important to them. The direct connection to Medicaid, clearly, is less prevalent than I first implied. On the other hand, it remains more prevalent than most people assume -- and that fact still helps explain, I think, why the program remains quite popular.

From the 2011 Fiscal Summit, sponsored by the Peter G. Peterson Foundation:

MARIA BARTIROMO (MODERATOR):

Okay. Let me get some questions from the audience. And this is from Michael Pierce from Wyoming. As a father of a child with special needs, my family has benefited from government social programs. Nevertheless, when does our debt reach the level where good intentions today become crushing burdens on the next generation tomorrow?

GENE SPERLING:

I think that's a great question, and I think that the spirit in that question is really touching in a sense. This is a person who has a child with special needs, and yet they're suggesting they're willing to be part of the shared sacrifice. But I have to say there are right ways and wrong ways to do things. I'm going to say from a policy perspective, nd I say this to everybody in this room, there is enormous discussion about the revenue side and the Medicare side. But from a policy perspective, from a values perspective, we should be very deeply troubled by the Medicaid cuts in the House Republican plan. I want to make clear what they are. This is not my numbers, this is theirs.

After they completely repeal the Affordable Care act, which would take away coverage for 34 million Americans, according to the Congressional Budget Office, after they've completely repealed that, they do a block grant that would cut Medicaid by $770 billion in 2021 that would cut the program by 35 percent. Under their own numbers, by 2030, it would cut projected spending in Medicaid by half. By 49 percent. So, of course I don't think, or imply, any negative intentions or lack of compassion. But there is a tyranny of the numbers that we have to face.

And here's the tyranny of the numbers. Sixty-four percent of Medicaid spending goes to older people in nursing homes or families who have someone with serious disabilities. Another 22 percent goes to 35 million very poor children. Now I ask you, how could you possibly cut 35 percent of that budget and not hurt hundreds of thousands, if not millions of families who are dealing with a parent or a grandparent in a nursing home, or a child with serious disabilities? How is the math possible?

If you tried to protect them mathematically, you would have to eliminate coverage for all 34 million children. Now I know some people didn't like when the President mentioned that this was going to be very negative for families, for those amazingly brave parents. And he may be one of them in our country, who have a child with autism or Down's and who just are enormously committed and dedicated to doing everything they can to give their child the same chance every other child has.

But here's the reality: Medicaid does help so many families in those situations. Over the years, we've allowed more middle class families who have a child with autism to get help in Medicaid. There's a medical needy program that says we'll count the income after you've spent down medical costs. There's a Katie Beckett (PH) program that was passed by President Reagan that says if you have a child that's in need of institutional care you can get help from Medicaid. This is a life support for many of these families. But these are the optional programs in Medicaid. These are the ones that go to more middle class families. If you're going to cut 49 percent of projected Medicaid spending by 2030, do you really think these programs will not be seriously hurt.

So when we say that the tyranny of the math is that this Medicaid cut will lead to millions of poor children, children with serious disabilities, children with autism, elderly Americans in nursing homes losing their coverage or having it significantly cut, we are not criticizing their plan. We are just simply explaining their plan.

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posted in: jonathan cohn, politics, new york, medicaid, republicans, gene sperling, medicare

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