Medicaid is helpful and should be protected

Put the bat away

By Barb Rea
ESPC health policy volunteer

Advocates and providers who work with low income seniors and families and individuals with disabilities should be aware of what went on at the Wyoming Legislature’s Join t Labor, Health and Social Services Committee meeting May 9-10in Evanston.
I am concerned about the ongoing attacks on Medicaid and the Affordable Care Act and the misguided belief that we can reform health care without the aid of a strong federal partner.
On the bright side, new committee members are getting intensive education from experts on health care and health reform.
Other aspects of the committee’s work were not so bright. Committee Co-Chairman Sen. Charles Scott, R-Casper, felt the need to add his personal interpretation to almost every piece of information presented. He painted Medicaid as a perennial problem in the state, and assured the committee that the new federal health care law, which he dismissively terms “Obamacare,” will be repealed or at least defunded. He also continues to portray his pet project, Healthy Frontiers, as a viable program which could be used to replace both Medicaid and the benefits offered in the new legislation.
The truth is that Medicaid is an efficient way to provide health care to many low income, elderly, blind and disabled individuals in Wyoming. Like the promise we made to the elderly with Medicare, Medicaid is the promise we made as a nation to provide healthcare to the poor, disabled, blind and elderly. Individuals who qualify for this program are guaranteed the right to comprehensive healthcare.
We learned from the experts testifying at the meeting that the federal taxes we pay in Wyoming are essentially subsidizing low-income care in other states. Wyoming’s Medicaid program has always provided bare minimum services to the fewest people possible under federal law. Other states use the program to leverage more federal dollars into their healthcare systems and provide more health care for people who would otherwise depend on emergency rooms when they are ill or injured.
Our state leadership seems intent on making sure we provide fewer services and use more state money to do it, just to send a message to Washington that we can do this ourselves.
Senator Scott used every opportunity to imply, incorrectly, that Medicaid enrollees tend to overuse the system and are always trying to game the system to get more than their fair share—making Medicaid more expensive than private coverage. At one point he digressed at some length about rules which would hypothetically allow mothers to quit their jobs so their children can qualify for Medicaid. Then, Scott said, the mothers are able to go get their jobs back and their children go right on receiving health care, “and there is nothing we can do about it.”
Scott’s attitude was bolstered by the state’s new Director of the Department of Family Services, Steve Corsi, who made a stunning assertion that 30% to 40% of people who enroll in Medicaid in Wyoming, come dressed like he was (black suit and new haircut) and driving an Escalade, “and there is nothing we can do about it.”
Senator Scott let the committee’s disgust percolate until Wyoming’s Medicaid Director, Teri Green, was able to question the validity of Mr. Corsi’s numbers. Mr. Corsi later apologized for using an inflammatory example and a “guesstimate.”
Later we learned from another presenter, that nationally less than 10% of Medicaid payments are claimed fraudulently, and in Wyoming the figure is less than 6%. Moreover, research tells us most of the fraud by far (80%) is committed by providers (primarily medical-device and pharmaceutical companies). Less than 10% of the fraud is committed by patients. Click here to read Health Insurance Fraud: An Overview
National research verifies that Medicaid is far less expensive than private coverage, but Sen. Scott continues to cite numbers to the contrary, numbers that have never been publicly vetted and do not seem logical to the people who manage Medicaid. (See below for links to this research)
Rather than persistently portraying Medicaid as a problem, the committee should be looking at Medicaid as a key component to stabilizing the entire health care system. It will help ensure that everyone has insurance coverage. Complete coverage, in turn, is part of the solution to stabilizing the market by eliminating the cost shifting that occurs when the uninsured seek and receive emergency care.
Under the Affordable Care Act, Medicaid eligibility will be simplified and expanded so that it covers all low-income people who earn up to 133% of federal poverty level ($1207/month). The state will be responsible for part of the cost of care for about 6,000 Wyoming individuals who are currently eligible for Medicaid but have not applied. These people are probably not enrolled because they are healthy, so they are not expected to add a huge burden to the state budget. The expansion of the program to finally include all low-income adults will be almost entirely paid for by the federal government (100% till 2017 and dropping to 90% in 2020).
Does it really make sense to opt out so our tax dollars can go to other states?
Don’t we want our poor citizens and blind neighbors to have access to the healthcare they need when they need it?
If Medicaid were privatized, as Senator Scott seems to be advocating, those federal matching dollars would disappear, and the costs would be shifted to state and county budgets or to those who pay premiums for private insurance. We would be paying both federal taxes that don’t come back to Wyoming and higher premiums.
If we want to accept the federal match available under the Affordable Care Act, we will have to guarantee that we will provide a program in Wyoming that will be at least as strong as the Affordable Care Act. We will have to pass a law that provides comprehensive coverage to all our citizens. Would we be able to achieve this with a private insurance industry that has been pushing poor and sick people off their roles systematically for decades? This practice is the reason we had to develop Medicaid and Medicare in the first place. We need those public programs to make our system work, and we need them now more than ever.
If we want our Medicaid program to run more efficiently, we should just ask Tom Forslund, our new, capable Director of the Health Department, to make it so, not try to reinvent the wheel. Medicaid will be a big part of our state budget because it serves an important function for our friends and neighbors who need healthcare and for those who provide healthcare services. We should prepare for the larger numbers it will cover instead of pretending poor people’s healthcare needs can be legislated away.

Links to Medicaid vs. private insurance research
“Trends and Indicators in the Changing Health Care Market Place: Medicaid Payment per Enrollee by Acute and Long-Term Care, 2003 http://www.kff.org/insurance/7031/ti2004-1-15.cfm

“Trends and Indicators in the Changing Health Care Marketplace: National Prescription Drug Expenditures, Percent by Type of Payer, 1994-2004” Kaiser Family Foundation http://www.kff.org/insurance/7031/ti2004-1-16.cfm

“Comparison of Expenditures in Nongroup and Employer-Sponsored Insurance” Kaiser Family Foundation http://www.kff.org/insurance/snapshot/chcm111006oth.cfm

“MEPS Topics: Health Care Costs/Expenditures” Agency for Healthcare Research and Quality http://www.meps.ahrq.gov/mepsweb/data_stats/MEPS_topics.jsp?topicid=5Z-1

“Comparing Public and Private Health Insurance for Children” Center on Budget and Policy Priorities http://www.cbpp.org/files/5-11-07health.pdf

“Medicaid, Private Health Insurance and the Uninsured” John Holahan, The Urban Institute http://aspe.hhs.gov/medicaid/jan/Holahan.pdf

“Expanding Medicaid a Less Costly Way to cover More Low-Income Uninsured Than Expanding Private Insurance” Center on Budget and Policy Priorities http://www.cbpp.org/cms/index.cfm?fa=view&id=429

“Administrative costs on Health Plans: A systematic review of current studies” Deloitte Center for Health Solutions http://www.deloitte.com/view/en_US/us/Industries/health-plans/1fdbe665e4e06210VgnVCM200000bb42f00aRCRD.htm


Editor's note: Barb Rea is an ESPC volunteer and represents the organization in the coalition Consumer Advocates: Project Healthcare.