As Congress rolls back into Washington this week, a House-Senate conference committee will begin crafting legislation to roll back the social safety net. The healthcare industry needs to get off its duff and do everything it can to limit the damage to its patients and bottom line.
The House and Senate passed very different "deficit reduction" measures last month. I place the quotation marks around those words for good reason. The Senate, though it passed a less punitive measure to control health program costs, also seeks a far larger tax cut, with the net effect of increasing the federal deficit by some $25 billion. The House tax plan, as things stand, would add about $10 billion to the ballooning deficit.
Many lawmakers argue that either budget-cut alternative would trim less than 2% of Medicaid spending over a five-year period. New copayments and premiums are needed to make beneficiaries aware of the fiscal implications of seeking care, they say.
Those arguments might make sense to those with the means to afford parting with a few bucks. In fact, after the tax cuts are passed, people of means will have many more bucks. Under either plan, more than three-quarters of breaks will go to people with annual incomes of more than $100,000, an Urban Institute-Brookings Institution analysis found.
For those less well off, however, those few extra dollars aren't mere pocket change. The House plan retains the current limit on Medicaid copayments of $3 per healthcare service, but allows it to rise with the medical-care component of the Consumer Price Index, which is more than twice the rate of income growth.
For millions of other beneficiaries, there could be copayments and premiums that reach as high as $900 per year for a family of four making just above the current federal poverty level of about $19,000 per year. Try covering rent, utilities, food, transportation, clothing and healthcare on $1,600 a month. Any extra costs force some tough decisions.
This is why numerous studies have found that premiums and larger copayments cause beneficiaries to avoid seeking Medicaid coverage and to forgo needed care. Untreated illnesses such as diabetes and hypertension wind up as uncompensated care in hospital emergency rooms.
In fact, the Congressional Budget Office, in its analysis of the House plan, estimates that about 80% of its savings would come from fewer doctor visits and prescriptions. The CBO also estimates that more than 100,000 people would lose Medicaid coverage altogether because they could not afford paying premiums.
The Senate budget plan, while far from perfect, is preferable, at least from a healthcare perspective. It seeks most of its Medicaid cuts by restricting asset transfers by middle-class people who want to qualify for nursing home payments. It also would cut $5.6 billion in unnecessary payments to Medicare Advantage plans.
There are other potential savings that wouldn't fall hardest on the poor. Just last week the Government Accountability Office found that Medicaid vastly overpays for prescription drugs, wasting untold billions of dollars.
Congress could also find huge savings by repealing its own recent legislative boondoggles on energy and transportation, each of which was stuffed with pork. Better yet, it could stop its insane addiction to tax cuts for the wealthy in order to spare those who don't have those extra few bucks for healthcare.
The healthcare world has been pretty quiet about Medicaid cuts. Hospitals may be happy that Medicare is being spared for now. But they have a stake in this debate, one they shouldn't sit out.
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