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The War on Medicaid

March 3, 2014

My dear friend Paul Ryan, who has his eyes firmly glued on the white house, recently released a 200-page report with lots of figures and references and ibid’s claiming that all the anti-poverty programs run by the government are worse than useless and should all be scrapped.  He’s got some ideas on why people are poor:  they come from or create broken homes.  They have no education.  They don’t work.  They work part-time.  They receive medicaid.  Wait, what?  Here’s what the report claims:

“Medicaid coverage has little effect on patients’ health,” the report says, adding that it imposes an “implicit tax on beneficiaries,” “crowds out private insurance” and “increases the likelihood of receiving welfare benefits.”

Is this true?

There’s a lot of references listed at the bottom of the page.  Let’s look at some of them.

1. the Medicaid and CHIP Payment and Access Commission. Children on medicaid or CHIP are more likely than privately insured or uninsured children to be in fair or poor health…and to have more problems like asthma, ADHD, autism, etc.  Well, yeah.  Medicaid helps poor people.  Poor people often have poorer health.  That doesn’t mean that medicaid causes poorer health.

Oh, and I love this one.  Adults younger than 65 who are enrolled in medicaid are sicker than those who are privately insured or uninsured.  That’s because you have to be disabled to get on medicaid if you are younger than 65!

2. A study out of Stanford by Baker and Royalty: Medicaid Policy, Physician Behavior, and Health Care for Low Income Population.  Medicaid patients are more likely to be treated in hospitals or public clinics than in private physician’s offices.  OK, that’s true. Medicaid pays 70% or so of what Medicare pays, which is way less than what private insurers pay.   Baker and Royalty assert that this is not an efficient source of care.  But it’s the cheapest.  One could argue that if reimbursement was better more patients would get treated by private physicians.  Assuming that really is better.

3. The Oregon Health Insurance Experiment.  Medicaid patients use more health care than uninsured patients.  Well, duh.  What, the goal is to keep people from using health care at all?  If that were the case we’d be spending all our money on promoting exercise and salads, not invading countries.  And the report chooses to ignore the rest of the story, which is that the medicaid patients also had lower out-of-pocket expenses, lower medical debt, and better physical and mental health.

4. The Oregon Health Insurance Experiment II.  Medicaid coverage does little to improve people’s health.  That’s because health care does not improve people’s health.  People do.  Poor people have fewer options for healthy lifestyle choices.  Mr. Ryan’s report also plays down the rest of the story, which is that having medicaid also increased the use of preventive services and eliminated out-of-pocket catastrophic debt.  Which is what insurance is supposed to do.

5. Rachel Rapaport Kelz in an article entitled Morbidity and Mortality of Colorectal Carcinoma Surgery differs by Insurance Status.  Medicaid patients are more likely to get sick during their hospital stay.  This is another entry in the duh category.  This is not because they have Medicaid.  It’s because they are poor.  And because they are poor, they have fewer healthy lifestyle options.  Because they have fewer healthy lifestyle options, they’re sicker.  Put them in the hospital, they’re sure to get sicker yet.

How about that “implicit tax?”

6. The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market, by Brown and Finklestein.  “The premiums that one might have paid for existing private policies go to pay for benefits that would have otherwise been provided by Medicaid.”  I have no idea what that means.

And finally, the topper:  Being on medicaid increases the likelihood of receiving welfare benefits.

7. Moffit and Wolfe: The Effect of the Medicaid Program on Welfare Participation and Labor Supply.  A rise in medicaid benefits increases the likelihood that a person is on AFDC (welfare) and decreases the likelihood that the person has a job.  Somebody needs to explain cause and effect to Moffit and Wolfe.

This is all to say that medicaid does not cause anyone to be poor, be on welfare, have poor health, etc.  Medicaid is a health insurance program for the poor.  Being poor therefore increases the likelihood that you’ll be on medicare.  It’s not a great system and the care isn’t that good, but it’s not a failed program.  The war on poverty may indeed be lost, but not because of medicaid.  It’s being lost in spite of medicaid.


From → Health Insurance

  1. Hi Shirie:

    Yes and maybe if medicaid provided for more wellness and proven benefits to support physical activity and physical therapy for those who have chronic pain, we’d maybe see less addiction to prescription pain meds. A lot has changed since I was in primary care 3 years ago, but when I worked in community health, methadone was my only option for managing chronic pain for the medicaid patients. Thank God they took that off the formulary given the accidental and maybe not so accidental overdoses!

    Amusing to see Ryan’s stupidity in his analysis. Kudos to you, your article should be submitted to the NY Times. Deb

  2. thetinfoilhatsociety permalink

    I am so of two minds about this whole issue. I grew up as the child of a single parent who went to school to better herself after a divorce and used welfare and medicaid benefits while doing so. I think maybe families then viewed it differently then than it’s viewed now, within the community of users for sure. Then, it was with a slight sense of shame, and with the knowledge that we were ‘better’ than this, and that it was only a temporary thing until we got back on our feet.

    Now, it’s almost a measure of pride to be able to game the system, to avoid having to work, to be able to receive benefits. I say that as someone who lives in a very low income community (we as a couple probably make in the top 5% or even 3% of income for this community) and as someone who has spent years working in emergency services – fire service, ambulance service, and ER. In many ways I do think the system is a failure, because it has created an entire culture of dependency and entitlement that has no end in sight.

    Yes, there are always those who truly need it, and those are not the people I’m talking about. If we were only talking about them, there would be no need for the discussion. It’s the rest that use the system for their benefit that make things awful for those who really need it, and who keep those who don’t know how to game the system to get what they really need, from getting it. The minority of those who really need it and can’t get it are the ones who stick out in my mind.

    Are people in fact healthier because they are on Medicaid? I don’t think so. They certainly use more medications though. They are certainly higher populations of obese. They are certainly less likely to exercise. They are certainly more likely to own a gaming console. They are certainly less likely to have any interest in a community garden or eating healthy. They are definitely more likely to use the ER for minor problems that could have waited to see a doctor, mainly because they don’t have to pay for the services and they don’t have to wait (and this is from patient mouths directly) These are observations I make based on my own community, knowing in large the statistical percentage of my neighbors on Medicaid, and my experiences in emergency services.

    I think if Medicaid is to continue there needs to be a large portion of personal responsibility leavened into the loaf of services doled out. There’s none at all presently. And it’s so politically incorrect in this ‘patient-centered’ environment to tell people they have to take responsibility for their own health! That too must change. Medicine isn’t like going to a restaurant — you don’t get to come in and order what you want, and the provider/doctor/whatever you want to call them isn’t the cook or the waiter who just serves it to you without question because the customer is always right! You go to a doctor/provider/whatever because they have specialty knowledge you don’t possess and you need their services. You aren’t really a customer in that situation, you’re a patient.

    Now, am I saying that there aren’t providers who are jack@$$es? Oh, of course there are, and they need to know their behavior will NOT be tolerated. However, telling a patient who is morbidly obese, diabetic, with chronic pain from osteoarthritis that their problem is that they are obese and if they lost weight their other problems would become less severe shouldn’t be considered anti-patient. It should be necessary. And the patient should have to be held accountable, not just given more and more medications for problems that are all lifestyle in nature. Caring for people means telling them the truth, gently and with compassion, not giving good ‘customer service’. I think telling patients they were customers, or even worse consumers, was the worst thing that could have happened to medicine. Consumers, for pete’s sake?? Why not just call them takers and be done with it?? They’re co-creators in their health. And they deserve truth, responsibility, and accountability. As do the experts, the providers.

    That is my frustration, and my take on Mr. Paul’s paper. I suspect he shares my frustration.

    • I totally agree that Mr. Paul is frustrated. There absolutely are people who will game the system and there absolutely are people who will use services to get out of working. Medicaid is really, in it’s most useful form, so that poor people don’t get slammed with insurmountable debt should something terrible befall them. Health insurance doesn’t make anyone healthier, no matter what kind of insurance they have. Only people can make themselves healthier.

  3. Kim permalink

    Good article, but I must point out that I think the terms “Medicare” and “Medicaid” got transposed at least once. If you are <65yo, you can only be on MEDICARE if you are disabled.

    • Yes, thanks Kim. I’ve been called on that one by a lot of people. I need to spend a little more time on editing!

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