Saving That “Worthless” Medicaid

As noted earlier today, it’s the 50th anniversary of the enactment of Medicare and Medicaid.

I strongly suspect the former will get more attention, because it’s a non-means tested program with an extremely powerful bipartisan constituency (despite constant GOP efforts to screw over future beneficiaries via a phased-in voucherization or some other way to shift costs to old folks). Everybody’s either on it or going to go on it if they live long enough.

Medicaid’s another matter, of course. It’s means-tested with the states having significant control over eligibility and benefits, which means it involves different sets of people (particularly now that half the states have accepted the ACA’s Medicaid expansion while half haven’t) and significantly different benefits and service delivery models in different states. With the exception of a little-understood long-term care component that pays for nursing home care for people who have disposed of most of their assets, Medicaid is a poor folks program–you know, for those people–which because it is state (and to some extent locally) operated means these poor folks are not necessarily dealing with the friendliest policy-makers, administrators or providers, particularly given Medicaid’s relatively low reimbursement rates.

But to the Republicans who have all pretty much agreed upon a policy of “block-granting” Medicaid, which means dumping the Medicaid population on the states with a fixed (and ultimately declining) sum of money and letting them do whatever they want to do with them, the question about Medicaid isn’t whether its structure and financing are giving the poor the kind of health care the rest of us would want, but instead whether it’s worth anything at all. That’s largely the function of prejudice plus a 2013 study in Oregon of people receiving and not receiving Medicaid benefits which provided some startling-sounding data on how little real benefit Medicaid created. It’s hard to read any conservative discussion of Medicaid and not hear the Oregon study “proved” Medicaid’s worthless.

So that’s why with Medicaid’s fate perhaps hanging in the balance after the upcoming election, three excellent policy writers, Harold Pollack, Bill Gardner and Timothy Just, have written an explanation of the Oregon study that rebuts its invidious use.

[P]erhaps the most important limitation of the study stems from an assumption that many readers would be unlikely to notice. [The Oregon researchers] placed a very low value—$25,000—on a year of additional life for Medicaid beneficiaries. The typical threshold used in health services research is much larger, in recent studies far above $100,000 per additional year of (healthy) life. Yet because the median income of the Oregon study participants was about one-fourth of the median income in the United States, the researchers chose to value an additional life-year at about one-fourth of the usual threshold. This assumption powerfully frames everything that follows in this analysis. After all, if you start out by assuming that Medicaid beneficiaries’ lives are worth very little, you will find that it is not worth spending much money to prolong them.

So the idea of Medicaid being “worthless” is closely correlated with the idea of the life of poor folks being relatively “worthless” (there are defensible reasons for this valuation in the study itself, but not for the way it’s being used by anti-Medicaid ax-grinders) as well. If you don’t share that premise, you shouldn’t share the related conclusion, either.

In any event, progressives should gird up their loins for a fight to save Medicaid in the near future. I’ve thought of myself as a warrior for the continuation of Medicaid ever since I was drawn into the 1981 Reagan Budget fight, wherein the administration suffered a rare defeat in its efforts to “cap” federal Medicaid spending, thus gradually making it a state-financed program. The fight just ahead could be even tougher.

Ed Kilgore

Ed Kilgore, a Monthly contributing editor, is a columnist for the Daily Intelligencer, New York magazine’s politics blog, and the managing editor for the Democratic Strategist.