Sophies Choice

My friend and Duke colleague Chris Conover has an  op-ed in the News and Observer today on North Carolina’s decision to not expand Medicaid under the auspices of the ACA.

I don’t know what our state ultimately will decide about this in the years ahead. The best solution, now being worked out in states such as Arkansas and Ohio, might be one in which those on Medicaid are allowed to enroll in private health insurance on the exchange. What I do know is that the public is best-served by knowing all the facts, not just those cherry-picked by advocates on one side or the other.

My book proposed this (ch. 7, p.64-67):

End the Medicaid program by transitioning responsibility of dual eligible Medicaid costs to Medicare, while moving non-elderly low income persons into subsidized private health insurance state undertaking the Medicaid expansion, but moving over time to buy low income persons into private insurance sold on exchanges.

No one is seriously talking about federalizing the full cost of the dual eligibles now, and I will leave that argument aside for now which mostly focuses on long term care/coordination of the frail elderly. My reasoning for having a long term goal of buying low income persons private insurance in exchanges is as follows (ch 7, p. 65):

Conservatives seem to viscerally dislike Medicaid because it is a government insurance program, while Progressives believe its safety net function is vital to the well being of our country. I believe the political viability of Medicaid as currently structured is in doubt, and that budget pressures will cause incremental reforms that will chip away at the safety net provided by the program. In the current climate, Medicaid is being looked to shoulder spending cuts in an unthoughtful manner. Progressives need to drive changes to the program in order to protect vulnerable beneficiaries, and there are incentives for both Progressives and Conservatives to transition away from the current program.

The logic behind the proposed changes rests in the different needs of the “three programs” represented within Medicaid. Those covered by acute care Medicaid (45-50 million persons) most of them pregnant women and children, are relatively inexpensive to care for on a per capita basis. Increasingly, such beneficiaries have trouble finding providers who will care for them, due to a double whammy of stigma (it is insurance for persons who are poor) and the fact that it pays providers below what Medicare pays, which is less than what private insurers pay.  This has lead to a systematic access problem for some Medicaid beneficiaries who have trouble finding a physician willing to treat them. There is nothing inherently wrong with the structure of Medicaid; we could decide to make it the best payer of care tomorrow, but that of course, is not going to happen. Buying them into private insurance policies will mainstream their care and remove a layer of cost shifting. [emphasis added]

A fascinating aspect of the debate is the disagreement on basic facts about the impact of Medicaid on health. Chris says (and I agree) that:

What I do know is that the public is best-served by knowing all the facts, not just those cherry-picked by advocates on one side or the other.

And he then notes that the Oregon Medicaid expansion and subsequent study is the best evidence we have about the impact of Medicaid on health, and that research finds no significant difference in mortality between those who are uninsured v. Medicaid, though other measures of health were improved by Medicaid v. being uninsured. Chris notes that based on this study, saying Medicaid definitively “saves” lives is sketchy. Of course it would also render the opposite claim–that Medicaid makes you more likely to die, just as false, as Rep. Ellmers said recently, though she was using data from a different study than the one Chris notes (and I agree) is not as rigorous. So, she was cherry picking.

So, there are dueling studies with divergent outcomes (this is a good overview of the full literature; there is a lot to read down this path; I believe that it shows fairly clearly that Medicaid is better for health than no health insurance, when taken as a whole). However, there seems to be nothing that can bridge the gap to get proponents and opponents to agree on whether expanding Medicaid is on balance good or bad for health. This puzzles me, but I think it most importantly shows that this debate is first and foremost a political disagreement, which can only be settled by a political deal.

That brings us back to North Carolina’s choices:

  • Option 1: Do nothing, which is now the default based on the actions of the General Assembly and Governor
  • Option 2: Expand Medicaid under the auspices of ACA
  • Option 3: Undertake a “private expansion” similar to what Arkansas and other states are planning to try

Option 1 is the worst. Option 2 is far preferable to doing nothing, and it would allow our state to benefit from the experience of other states trying different models while expanding coverage now, allowing us to shift course later if we choose to do so. Option 3 would be for the General Assembly and Governor of North Carolina to come up with an innovative plan to move ahead in a different manner now, presumably based on private health insurance, using the great political leverage we would have because the Obama Administration would love to say yes. Choice 3 is also much better than doing nothing.

North Carolina, lets do something.

About Don Taylor
Professor of Public Policy at Duke University (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute). I am one of the founding faculty of the Margolis Center for Health Policy, and currently serve as Chair of Duke's University Priorities Committee (UPC). My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

One Response to Sophies Choice

  1. Chris Conover says:

    Thank you for this thoughtful reply. If all progressives were as clear-headed and sensible as you in discussing these issues, we likely might avert much of the gridlock that plagues Washington DC.

    How to deal with dual eligibles is the most complex aspect of Medicaid and one that I have studied far less than you. So I remain agnostic on the question of whether this group should just be folded into Medicare, especially given that Medicare as currently structured doesn’t provide for long-term care. But obviously I can support transitioning the remaining Medicaid population into private plans, ideally some form of managed care plans insofar as the RAND HIE suggests the undesirability of trying to manage utilization/costs with this population using cost-sharing.

    As for the evidence on health, I concur Medicaid appears to improve health if the alternative is being uninsured. What’s at issue is whether there’s a mortality benefit and I’m simply pointing out that the most rigorous scientific evidence available does not yet show us such an effect. [Note that OHS only had 1 year of follow-up. It’s certainly possible that with a larger sample or longer follow-up period, a mortality benefit would show up, but to date it has not].

    That said, there’s studies that DO show a mortality advantage for those with private coverage relative to those with Medicaid–each using a different instrumental variables approach to addressing the potential selection issue that generally confounds cross-sectional comparisons of populations in various insurance categories. In that context, being on Medicaid can be said to kill people if the alternative was having private coverage.

    As for options, I think the federal politics of expansion are playing out in ways no one anticipated. That is, I don’t think Arkansas seriously expected a “yes” answer to their query regarding putting people onto the exchange. But now that it appears to be on the table, the negotiating options available to NC policymakers are much larger than when they made the initial decision to reject expansion. I won’t pretend to second-guess the governor and his staff or GA on timing. The point of my piece was to say this was not a slam dunk decision: it was not “obvious” that moving forward was the “best” choice.

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