Medicaid: It's Not "Just For Poor People"

In my previous post, I covered what Republicans want to do to Medicaid [1]. In this post, I intend to delve into why Republicans want to gut Medicaid.

Republicans present their budget proposal as a solution to the "problems" of Medicaid and Medicare, which their budget cites as two of the biggest drivers of national debt. But, as I demonstrated in my previous post, Medicaid and Medicare aren't the problem. They're part of the much larger problem of rising health care costs — a problem the GOP budget doesn't solve. (More on that in an upcoming post.)

If Republicans are intent on ignoring the white-coated elephant in the room, and solving "problems" that exist in their minds only, that raises an important question about their plans for Medicaid.

Why Republicans Want To Gut Medicaid

 Why does the GOP want to gut Medicaid? Because conservatives have hated Medicaid since its inception in 1965, for reasons Paul Waldman aptly summarized [2].

...The primary objection here isn't budgetary; it's moral. Many conservatives feel that poverty is a moral failing, and if you're getting help from a government program, you're probably some kind of scamming welfare queen sucking off people who work for a living, getting a benefit you don't deserve. [emphasis added]

Conservatives like Paul Ryan have repeatedly said their goal is "strengthening welfare for those who need it." [3] But what the Republican budget reflects is much closer to House Minority Leader Eric Cantor's statement that Medicaid and Medicare amount to "a safety net in place in this country for people who frankly don’t need one." [4]

But Jim Wallis reminds us that, "a budget is a moral document," [5] that "reveals what your fundamental priorities are: who is important and who is not; what is important and what is not." And the Republican budget casts Medicaid recipients as "the undeserving poor." [6] Cutting aid for those who need it most makes perfect sense, if you believe those who need help the most deserve it the least. (For a more in-depth explanation, I recommend George Lakoff [7].

The budgetary justification for gutting Medicaid is weak. As I pointed out in the previous post, the cost-per-beneficiary for Medicaid is lower than private insurance [8]. But the GOP thinks that "Medicaid is the easiest to win consensus on." [9] That's because their perception of Medicaid is that it's "just a program for poor people."

Paul Ryan himself gave that much away when he said in his Wall Street Journal op-ed that Medicaid reform is really welfare reform [10]. He gives much more away with his desire to model the GOP's "Medicaid reform" on the "successful" welfare reform of the late 90s. As wrote in a previous post, what Ryan sees as the "successful" welfare reform of the 90s was really a classic conservative "catastrophic success." [11]

See, there's the problem with this is that the welfare reform of the late 1990s was not a success. Not unless you're a conservative. And even then it was at best a "catastrophic success" [12] — defined here as "success" that's actually catastrophic for those it's purported to help. That's also what makes it a success. That is, if you're a conservative.

What makes it a success? Well, in a sense, failure. It works if it doesn't work, in other words, especially if it doesn't work for the right people — because the right people are the wrong people. Follow me? No?

...Paul Ryan, in his WSJ op-ed, says that with his roadmap we "strengthen and improve welfare programs for those who need them, we eliminate welfare for those who don't." It's curious, because it really does sound like he wants to duplicate the catastrophic success of the welfare reform of the 1990s. The "success" was getting people off welfare rolls, not necessarily improving their condition. It was about reducing the number of people receiving government assistance, not reducing the need for assistance. Simply put, it's fewer people getting help, instead of fewer people needing help.

It's like the right wing version of a Zen kōan [13] that cannot be understood by the rational mind, and only makes sense to the conservative mind. It only makes sense if you believe that those who need help the most deserve it the least, and their need itself is the greatest evidence of that.

Then, not only does it makes economic sense to slash Medicaid beyond recognition, it makes moral sense. In fact, it seems like common sense. So much so, that it seems safe for Republicans to assume most people will see that Medicaid is "just a program for poor people," and cutting it is both an economic and a moral necessity.

Unfortunately, for the GOP, most people are not "Zen Republicans" and don't see the world through the same distorted lens.

Medicare Is Not "Just For Poor People"

Gutting Medicaid won't be an easier than slashing Medicare [14], as David Callahan pointed out, because when people think about it.

Yes, Medicaid was designed for the poor during Lyndon Johnson's War on Poverty and still serves as a lifesaver -- literally -- for millions of low-income Americans. But it also benefits legions of seniors, primarily by covering nursing-home stays. And this group -- along with their kids -- will go on the warpath if Congress slashes Medicaid. Democrats foolish enough to sign on to big cuts -- say, out of desperation to keep the government from defaulting -- could find themselves in political trouble.

Lawmakers who have set Medicaid on the chopping block might want to bear in mind a few basic facts before they start swinging the ax.

First, the bulk of Medicaid benefits — two-thirds — go to the elderly and disabled. Drilling down further, a quarter of Medicaid spending helps seniors. So forget the idea that this is a program that mainly caters to poor adults and children.

In turn, many of Medicaid's benefits for seniors pay for nursing-home stays. Some 70 percent of America's 1.4 million nursing-home residents are on Medicaid, according to the Kaiser Family Foundation. And it's well known that plenty of middle-class and even upper-middle-class people turn to Medicaid for nursing-home coverage — either after exhausting their savings or impoverishing themselves by transferring assets to others.

This isn't hard to figure out. For starters, Republicans could look at the actual distribution of Medicaid dollars [15].

[16]

For that matter, Republicans could step outside of their beltway conservative bubble-within-a-bubble (that means outside their congressional offices, and at least several blocks away from Capitol Hill) and ask actual middle- and working-class people. When I every forty-and-above co-worker I had told me to make sure I mention exactly what David Callahan pointed out: that plenty of middle class and upper class people turn to Medicaid for nursing home coverage after "spending down" their assets and "impoverishing themselves" sufficiently to qualify for Medicaid.

Callahan also cites an April 2011 Kaiser Family Foundation poll [17] which shows Medicaid is a popular program and suggests why.

Strong public support of Medicaid appears a dividend of many Americans either receiving assistance from the program or knowing a family member or friend who has. While 56 million Americans are enrolled in Medicaid at one time, about 69 million are enrolled at some point during the year as people go in and out of the program.

About half of respondents say they or a friend or family member has received Medicaid, and a similar share say the program is important to their family. Among the one in five respondents who personally have been covered by Medicaid, 86 percent reported a "very" or "somewhat" positive experience, the survey found.

A more recent Kaiser poll from just last month showed that 1 in 5 Americans have received Medicaid benefits.

Support for maintaining the current program may be due at least in part to the public's personal connections to Medicaid and a strong sense of the program's importance. About half of Americans say they or a friend or family member has received Medicaid assistance at some point, and a similar share say the program is important to their family. Among the 20 percent of adults who personally have been covered by Medicaid, reported experiences are positive.

"If you watch the debate about the deficit and entitlements, you would think that almost everyone has a problem with the Medicaid program and wants to change it, or cut it -- or both," said Kaiser President and CEO Drew Altman. "The big surprise in this month's tracking poll is that one group who does not want to cut Medicaid is the American people."

"With about 69 million people expected to be covered by Medicaid this year, it is no longer the -welfare-linked program it once was," Altman added. "Medicaid may not be the lower-hanging fruit that many who want to reduce federal entitlement spending have assumed it is."

Medicaid Is Important To The Middle Class

My office is not exactly an ideological cross section of the country, but what was foremost in my coworkers minds is something that the Kaiser poll reflects and something that most Americans understand about Medicaid [18].

This is mostly a program for the elderly and the disabled. It's the main way we finance long-term care in this country. If you don't directly benefit from it, you very likely have a parent or grandparent who does and whose financial needs will simply tend to fall on you if the program is cut.

[19]

We all have parents or grandparents. As they age, the medical care most of them will need will only get more expensive. Some of them will need long-term care or nursing home care, the cost of which will outstrip our families already stressed financial resources.

A year in a nursing home costs an average of $72,000 [20], according to the Department of Health and Human Services [21], and that's if there aren't an additional costs beyond just getting a bed in a nursing home. Medicare pays for about a month. It's not hard to see how easily and quickly our parents and grandparents can "spend down" their assets to quality for Medicaid.

We love our parents and grandparents, and we won't want their lack of resource or ours to keep them from getting the they need. Families USA's report, "Cutting Medicaid: Harming Seniors and People with Disabilities," [22] shows that Medicare is a big part of how our parents and grandparents get the care they need.

• Medicaid is the primary payer for an estimated 63.6 percent of all nursing home residents. In all states but one, Medicaid is the primary payer for more than 50 percent of nursing home residents.
• In seven states and the District of Columbia, Medicaid is the primary payer for more than 70 percent of all nursing home residents. Those states are the District of Columbia (80.1%), Mississippi (74.7%), Alaska (73.8%), Louisiana (73.0%), New York (72.3%), West Virginia (72.2%), Georgia (71.9%), and Hawaii (70.1%).

It all means that Medicaid is an important program for middle- and working-class families, too.

It's not just us forty-somethings-and-up who see it that way. It's our parents and grandparents too. Many of them realize what the cost of long-term care or nursing home care out would mean to their children, and their grandchildren [23].

Medicaid pays the bill for 66% of all nursing home residents. And these aren't the indigent — most\many of them are the result of middle-income people who have already run through their own money paying for their nursing home costs, and then become eligible for Medicaid. If Medicaid doesn't pick that up anymore, who's left? The children of the residents? Who are trying to send their kids to college and saving for their own retirement? Not that Paul Ryan cares, but essentially, states will need to choose between basic healthcare for low-income people and nursing home care for formerly-middle-income people with no money left. ...Imagine their reaction when they learn (too late?) that the Medicaid changes Paul Ryan and the Republicans want to make would mean they have to pay several hundreds of dollars a day to keep their parents in the nursing home they have been in for months\years?

This is true for millions of middle class Americans, and it's what makes Medicaid a program that helps support the middle class. Most of us are children of parents who worked hard to attain or maintain middle class status, and to pass its advantages. Most of our parents know that what kind of economic burden the Republicans' proposed cuts would mean for us and their grandchildren — a reversal of the life they worked so hard for us to have in the first place.

Not only do we have have parents and grandparents whom we love, and who love, many of us also have children with disabilities who benefit from Medicaid. At Peter Peterson's recent Fiscal Summit, White House National Economic Council Director Gene Sperling explained what the "tyranny of the math" means for our families [24] on that front.

And 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.

[25]

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.

[26]

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 when you spend down– we'll– 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– 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 there– that the tyranny of the math is that these– these– this Medicaid– program, 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 being– or– or having it significantly cut, we are not criticizing their plan. We are just simply explaining their plan.

Digby [27] asked simple question after Sperling's remarks: "Can any American know that that none of these things will ever happen to them?"

Of course we can't. That's why Medicaid isn't just an important program for poor families. It's an imporant part of the social contract for middle-class and working-class Americans too.