Medicaid is an important issue

It is a shame that the VP debate did not delve into the proposal of Gov. Romney and Rep. Ryan to block grant Medicaid in a way designed to greatly reduce federal spending on the program; this is where the most profound disagreements on health policy can be found in this election. Aaron Carroll and Austin Frakt have a nice graph depicting both the stark difference in proposed spending on Medicaid between the President and Gov. Romney, as well as the stark similarity in their planned Medicare spending over the next 25 years:

On the whole, Gov. Romney has an incredibly vague plan to “replace” Obamacare that amounts to muddled references to current law (HIPPA continuous coverage rules) and a series of inconsequential policies such as selling insurance across state lines that will expand coverage to far fewer than the 30+ Million persons who will be newly insured if Obamacare is implemented. On Medicare, Gov. Romney and Rep. Ryan say that the program is in such terrible trouble that they have now pledged to not cut its rate of spending growth in the next decade while swearing they will do something daring and consequential to control the program’s costs starting two years after they leave office. [911 what is your emergency?: my house is on fire, please come in 10 years!]

But not on Medicaid. Here is where the painful, difficult choices come right away in what Gov. Romney and Rep. Ryan have proposed, as the federal government would say “tag, you’re it” to states who would then have much less money to provide care for our fellow citizens now covered by the program. Just who are they? Really three groups:

  • Around 45-50 Million low income persons, now mostly women and children. Obamacare would add around 16 Million to to their ranks. These people are numerous in the program, but relatively inexpensive on a per case basis.
  • Around 9 Million so-called dual eligibles, who are covered by Medicare (because they are elderly or disabled) and Medicaid because they have low incomes. The per person cost of this group is huge, and includes acute and long term care like nursing home care.
  • Around 5-6 Million persons who have long term disabilities. Their care is very expensive on a per person basis, and their needs vary greatly depending upon the source of their disability.

Block granting Medicaid in a manner designed to greatly reduce federal spending on the program will set up a series of desperate decisions for states that will essentially boil down to a choice of providing health care insurance to the young or long term care services to the elderly and disabled.

I am a supporter of Obamacare, but believe it is not the last step, but the first one, and have written a book length treatment of what I think should come next (including major reform of Medicaid, but after assuring that the most vulnerable beneficiaries–the dual eligibles and long term disabled are protected).

Gov. Romney in many ways is a health policy hero. He brought about near universal coverage in his home state. Especially because of this history, I find his health policy proposals for the nation as a whole to be wanting. What bothers me the most about his plans are that the first groups he is asking to bear the brunt of painful choices and cuts are the the most vulnerable 5% of our fellow citizens, most of whom are elderly. That is just not right. The country should be talking about this.

About Don Taylor
Associate Professor of Public Policy at Duke University and author of Balancing the Budget is a Progressive Priority. On twitter @donaldhtaylorjr

2 Responses to Medicaid is an important issue

  1. Pingback: Quick debate thoughts « freeforall

  2. Pingback: Keith Hennessey on debt limit and health reform « freeforall

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