Medicaid – Hmmm…

Dear Reader,

As I said before, the current health care debate is not over health care (and it’s really not a debate), but about political power and economic control. So, let’s get out in the weeds here, and uncover the facts. This is a pretty complicated story with lots of numbers, so I will take it a step at a time with an eye towards understanding how Transylvania County will be affected by the Senate’s proposed Repeal and Replace.

Medicaid has gotten a lot of attention as part of the argument, so let me put it out there first. Medicaid exists to support health care for 3 groups of Americans: low-income families (income at or below the poverty line – $24,600 for a family of 4); the disabled; and, the elderly. In Transylvania County, 5,516 of our neighbors were eligible for Medicaid in Fiscal Year 2016, over 3,000 of whom are children.

Under the Affordable Care Act, states were invited to take part in Expanded Medicaid, which would provide coverage for families earning up to 138% of poverty (the “near poor” – $34,000 for a family of 4). At incomes higher than that, the ACA offered premium subsidies to help families get private insurance.

North Carolina under Governor Pat McCrory elected not to accept Expanded Medicaid leaving just over 500,000 people across the state with no health insurance. In Transylvania County, 997 of our neighbors had incomes too low to pay for health insurance but too high to qualify for Medicaid. These people are the working poor- employed low-wage earners, under-employed (part-time), and a few small business owners. These are the forgotten ones.

Now here is where we really get into the weeds because when we start talking about billions of dollars, it’s real hard for most of us to relate. Nevertheless, controlling that money is really what this is all about.

Since it was created in 1965, Medicaid has been a shared state-federal partnership created to provide health care for those who qualify. Over the years, federal funding for Medicaid grew as needs changed for the states. If more people became eligible, say, because of a recession, or if costs rose because of expensive new medicines or a public health crisis, states received more federal money.

Medicaid represents one-sixth of the nation’s health economy with outlays of $554 billion in 2015, accounting for a sizeable portion of Federal and State budgets. That was also a significant source of revenue for health care providers and insurers. State and local governments’ 2015 Medicaid outlays were $204 billion, or 37 percent of total program costs. Federal Medicaid outlays covered the balance. In North Carolina, Medicaid claims totaled about $14 billion, with the state paying about 24% of that and the Federal government picking up the remainder.

Over the next 10 years, Medicaid expenditures (including expansion where it was accepted) are projected to reach $957.5 billion by 2025, or roughly $603 billion from the Federal government and $354 billion from the states. The BCRA would cut the Federal spending on Medicaid by over $700 billion dollars by 2026, (about 1/3 of expenditure under current law) freezing federal funding for every Medicaid beneficiary at today’s level, and make no adjustment for a recession or a public health crisis. By 2026, CBO estimates 14 million fewer people would be enrolled in Medicaid compared to current law, so roughly 1,100 of our neighbors affected here in Transylvania County. Our state and county will then have to decide how to make up the shortfall.

So, as member of the tax-paying, voting public in this state, here are some Essential Questions we should be discussing at home, at church, at work, and at play. If we accept a $700 billion cut to Medicaid over 10 years, it will mean a loss of coverage for about 2,000 of our Transylvania County neighbors. How will we take care of those 2,000 low-income, disabled or elderly folks who need help?

  1. Do we leave it up to county government to sort it out themselves?
  2. Do we leave it to churches and other non-profits to take care of our neighbors?
  3. Do we lower the qualifying income from poverty to something less than poverty, thereby reducing the number of people covered?
  4. Do we stop covering able-bodied adults of working age, regardless of circumstances, thereby reducing the number of people covered?
  5. Would we just cut everybody’s reimbursements by a set percentage, say 10%, reducing the incomes of doctors and hospitals?
  6. Do we simply stop paying for new or costly treatments and pay only for the basics?
  7. Do we freeze cost reimbursements at the present level?
  8. Would we refuse to enroll new people in the program, roughly 9 million nationally in that time frame, no matter how difficult their circumstances, until we have balanced income and outlay?
  9. Do we demand increased funding from Federal tax revenues, forget the $700+ billion reduction?

Tough call. Consensus on these questions, guided by a moral framework, will go a long way toward providing us with a road map for where we want to go, though. Until then, we are spinning our wheels.

Next up, Pre-Existing Conditions.