When a trade reporter asked a group of health policy analysts this week to identify the one issue Democrats in Congress won’t address as they push health reform legislation, Heritage health policy analyst Dennis Smith was quick to point out that a Medicaid expansion is an incoming pandemic to federal and state budgets.
Expansions of Medicaid — the federal health program for the poor that is administered and partially paid by the states administered — are in nearly all of the health care overhaul bills currently being considered in Congress. As Smith notes in his most recent research:
Over the period 2010-2019, the House bill would spend $438 billion to expand Medicaid to all individuals with incomes up to 150 percent of the federal poverty level, or FPL ($16,245 for an individual, $33,075 for a family of four) and $773 billion to provide new public subsidies to individuals between 150 percent and 400 percent of the FPL ($43,320 for an individual, $88,200 for a family of 4).
But the proposal worsens what’s already a bleak situation, Smith told the audience of the health reform briefing sponsored by the Alliance for Health Care Reform. “Putting another 11 million to 15 million people on Medicaid is not realistic,” Smith said.
“The program already is unsustainable and it’s a huge issue that Congress is not dealing with.” Currently, about 90 million Americans receive health care services through Medicaid and Medicare, federal health programs that the Medicare Trustee Board has said will go broke in less than a decade. Additionally, Medicaid is one of the biggest budget busters for most states, with many cutting back on other vital services to make up for shortfalls created by demand in services through Medicaid.
The national expansions Congress wants for Medicaid do nothing to address the cost issue, Smith said. “Because the overall cost of health care is not being reduced, expansion of coverage — largely through new government programs — will require even more taxpayer subsidies,” he said in his report.
Smith argued these expansions fail to meet Americans’ expectations and demands (highlighted this weekend at anti-government protests in Washington) that any health reform legislation lower unnecessary health care spending.
Also, individual mandates and the provisions on employer-sponsored health insurance will make it harder for low-income people to comply with the proposed legislation because they won’t be able to afford the new costs, Smith said. “The provisions in the bills to prevent people from dropping employer-sponsored health insurance will make them pay for something that is even more expensive. It will create inequities for more financially vulnerable populations,” he said.
While panelists at the health reform briefing were unanimous that some health reform bill would pass this year, several including Smith questioned how big or effective that bill would be once it arrived at President Obama’s desk.
“There are so many competing values present in the health care debate that it’s going to be hard to reconcile them. Things like financing health reform, proposed Medicare cuts and where the economy is now are going have an important impact on any final legislation,” said.