JONATHAN COHN MAY 25, 2011
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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.
14 comments
A challenging question , and a fair one . A comprehensive and impressive answer from Gene Sperling . It all seems to come down to the costs of providing care in our system. Governors of both parties always tell us the burden that Medicaid is placing on their budgets , and it effects all of us . In order to reduce the deficit over time the program can't be exempt . The numbers are too big. We certainly should do a number of other things with revenue and cuts before we go after certain aspects of the Medicaid program . We have to slow down the rise in medical costs in this country . The Ryan plan is far too harsh. Medicaid will be a significant political debate in 2012 .
- alanwilkov
May 26, 2011 at 12:18am
I think America may be rediscovering our soul. I hope so.
- Sophia
May 26, 2011 at 2:02am
Ryan, on mike in a private conversation with Clinton, intimated that he was open to something else on medicare because the issue is so important and said he knew that his plan could be a political problem, but in the press he is advocating continuing on with it. To make him consistent, he is advertising the 25% lower top tax rate and he is open on something else that will kill medicare to pay for the lower rate.
- Nusholtz
May 26, 2011 at 8:21am
Medicaid was not intended as a program for funding the the long-term care of middle class elderly, yet that's what it has become. It's an open secret that "elderly planning" is a euphemism for taking the steps necessary to qualify for Medicaid funding of long-term care without depleting all of the elderly's financial resources first (i.e., without making them poor). This isn't a complaint, it's just a fact. What we've done is essentially shifted the burden from Medicare (which has never funded long-term care) to Medicaid (which wasn't created for that purpose). As Sperling suggests, Medicaid may have been created to fund health care for the poor, but is has become the primary program for funding the long-term care of the middle class; it's a middle class program, which is the reason why the program has so much support from the middle class, not because Americans have suddenly become more altruistic when it comes to the poor. What's needed is a realistic look at ways for providing (i.e., funding) long-term care for the elderly, which should include both public and private forms of insurance. Simply dumping this rapidly growing health care cost on Medicaid may well seal the fate of the program's primary purpose (guaranteeing health care for the poor).
- rayward
May 26, 2011 at 8:42am
Rayward- No argument here. Medicaid is not a long-term solution to the long-term care problem. Hopefully CLASS, part of the Affordable Care Act, will pave the way to a real long-term insurance program. But, for the moment, Medicaid is what we've got.
- Jonathan Cohn
May 26, 2011 at 9:07am
A little off topic, but since it is taking up so much of my time (including many hours last night), I have to make a comment on ACOs. I've commented before that I represent physicans, not hospitals, so you know whose side I'm on. The physicians are being given the hard sell by the hospitals to commit to ACOs now in the formative (conceptual) stage, and the physicians are seeking advice as to how to respond. My biggest criticism of the ACO model is that it's the hospital, by far the most inefficient provider, who will be driving the train. My second biggest criticism is that, after all these years promoting outpatient care because it's more efficient (and preferred by patients), the ACO model will be used by the hospital to bludgeon the outpatient competition. The cynic in me sees the ACO model as a way to achieve lower overall reimbursement (the combined reimbursement for the hospital and the physicians) but placing the cost on the physicians (the hospital will be absorbing part of the reimbursement that formerly went to physicians). The usual rejoinder is that the hospitals' greater resources will allow more physicians to adopt EMR and thereby improve their efficiency (and efficacy). Unfortunately, turning over the medical records to the hospital (which is the combined effect of the ACO and EMR) results in loss of patient control to the same hospital that is absorbing reimbursement that formerly went to the physicians. Again the cynic in me sees this push to form ACOs as coming from, you guessed it, the hospitals and their lobbyists.
- rayward
May 26, 2011 at 10:43am
From the article: "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." And so do what? Spend into the ground? Spend until nobody has medicare/medicaid? Or do we pay what it costs now and raise taxes? And let people get angry with the costs and waste and demand reform? Or do those that know how to look one step ahead skip those steps and reform the system now into something that is sustainable? JCohn, the summary of your article might be "Everyone loves free ice cream, and it's said when they don't get it anymore" Well yes. But then what?
- seattleeng
May 26, 2011 at 10:49am
Seattle, I can't believe you just equated giving long-term care to elderly to giving them free ice-cream! I guess I shouldn't be surprised, but I guess I'm just not yet cynical enough about Republicans. You really do advocate leaving the old, sick and/or poor in the ditch to die after all...I mean, if it's tantamount to giving them ice-cream, why would you ever bother with charitable donations to any organization that seeks to help them in their declining years. That money would be much better spent on things like political contributions to your favorite politicians and PACs, right?
I read an online article a month or so ago highlighting the cost effectiveness of long-term care via in-home nursing. I think the state in question was Louisiana, and they highlighted how much medicaid was spending on nursing homes vs. the cost of in-home care. If these kinds of results can be verified, I think it would go a long way to creating a sustainable solution.
- GSpinks
May 26, 2011 at 11:25am
Well, seattle, that's just it. Conservatives right now love to say that liberals would prefer we spend ourselves into the ground and yet we've already passed the ACA which was created - explicitly - to address the rising costs of healthcare and therefore curb our spending on Medicare and Medicaid. I realize that you don't believe it will work but that's not nearly the same thing as just continuing on as we are without regard. To claim that we are is simply disingenuous and transparent. Whereas we would, and did, attack the root cause of higher healthcare spending, conservatives have instead opted to simply stop spending the money. Based on the public's reaction to the Medicare scheme thus far, I think we know what approach they prefer.
- NR857175
May 26, 2011 at 12:40pm
NR857175 thanks for bringing up the PPACA's efforts to reduce costs, I was going to bring it up myself but it slipped my mind. As for Seattle not believing it will work, I seriously doubt he cares because at the end of the day Medicare and Medicaid amount to wasting his tax money on prolonging the lives of the useless.
- GSpinks
May 26, 2011 at 2:12pm
Happy to help, Spinks. :)
- NR857175
May 26, 2011 at 2:21pm
seattleeng. I ask you what you expect from free market capitalism. Suppose there is no government, no taxes, nothing. Does capitalism succeed in your estimation if adequate medical care is limited to only segment of the population?
- Nusholtz
May 26, 2011 at 3:10pm
Right seattle. Let Them Eat Ice Cream. Brilliant.
- Sophia
May 26, 2011 at 3:30pm
Medicare is trillions of dollars short of what it will need to meet its commitments. The Democrats know this, but for them it's an opportunity, not a crisis. Obamacare is based on looting what's left of Medicare and hastening its demise. The goal is a total government takeover of medicine. The consequence of that takeover will be as follows. American medicine will no longer make progress, but will become sterile and frozen in time. Medical progress, if it continues at all, will move overseas. The top third of Americans on the income scale will go abroad for first class medical treatment. The bottom two-thirds will have to make do with third-rate government medicine. Once again, it is the liberals who are the reactionaries, the real enemies of human progress. As always, the victims of "liberal" policy will be those on the bottom, not those on the top.
- bulbman1066
May 31, 2011 at 2:53am