What’s at Stake? Medicaid, Not Medicare

Seventy percent of Americans oppose cuts to Medicare and 57 percent are against cutting Medicaid, even when they are aware that the programs constitute an outsized weight in the federal deficit.  Of the two wildly popular programs, Medicaid is the most vulnerable.

Writing in the Washington Post about a report from the Kaiser Family Foundation about the health of Medicare and Medicaid, Ezra Klein says “It doesn’t matter whether Eric Cantor says he’s bargaining for the Ryan budget or not.  The GOP cannot privatize and voucherize Medicare.  They can’t even get close.  It’s too easy an issue for Democrats, too dangerous an issue with seniors, and too slipshod a policy even for Michele Bachmann.  The attack on Medicaid, however, is another story.  That one might actually work.  And if it does, it’ll actually be worse.  ‘in-the-know political circles,’ says Chris Jennings, who ran President Bill Clinton’s healthcare reform efforts, ‘it’s just assumed Medicaid is going to be hit.  No one is going to want to touch Medicare.  Medicare is where the political juice is.  But we’re going to need savings.  So that leads to Medicaid.’  There are two reasons Medicaid is more vulnerable than Medicare.  The first is who it serves.  Medicaid goes to two groups of people: the poor and the disabled. Most of the program’s enrollees are kids from poor families, though most of the program’s money is spent on the small fraction of beneficiaries who are disabled and/or elderly.  These groups have one thing in common: They’re politically powerless.”

It’s a little-known fact that Medicaid covers more people than Medicare. In 2010, according to the Department of Health and Human Services, Medicaid covered 53.9 million people, compared with Medicare’s 47.3 million.  Additionally, Medicaid patients are also among society’s most vulnerable.  “Kids (and) pregnant women are the vast majority,” according to Health and Human Services Secretary Kathleen Sebelius.  “But then older seniors, many of whom are in nursing homes…and very disabled individuals” are also covered by Medicaid.

Although states and the federal government share the cost of Medicaid, what grates on some governors is the rules that come with the money.  “Governors just want flexibility to run our states,” said Republican New Jersey Governor Chris Christie at the annual National Governors Association meeting in February. “We don’t want to pay 50 percent of the cost of Medicaid and have zero percent of the authority.  And I don’t think that’s an unreasonable thing to be asking for.”  Governor Haley Barbour of Mississippi agrees.  “If I could get total flexibility, I would take a two percent cap in a heartbeat,” he said.  Barbour’s preference is to receive a lump sum – what it gets now from the federal government, plus two percent to fund Medicaid.

Dr. Donald Berwick, administrator of the Center for Medicare and Medicaid Services, (CMS) said “There’s a right way to reform Medicare and a wrong way,”  Berwick believes that the direction he is taking — modeled on his successful patient safety campaigns at the Institute for Healthcare Improvement – will bring about needed healthcare change.  The Obama administration’s efforts to improve patient safety are more or less bipartisan.  There is little cause to dispute CMS’ data: the agency spent $4.4 billion in 2009 caring for patients harmed in hospitals and an additional $26 billion on patients who were readmitted within 30 days.  The Partnership for Patients, funded through the Patient Protection and Affordable Care Act (ACA), seeks to reduce preventable injuries by 40 percent and cut hospital readmissions by 20 percent in just two years.  According to CMS, achieving the Partnership’s goals will result in 1.8 million fewer patient injuries, allow more than 1.6 million patients to recover complication-free and save up to $35 billion in health costs.

Department of Health and Human Services (HHS) Secretary Kathleen Sebelius described contentious portions of the ACA as the inaugural steps toward entitlement reform.  Sebelius criticized proposals to transform federal Medicaid funding into block grants for states.  When some lawmakers asked her to speak about the Obama administration’s alternative proposal to rein in entitlement spending, Sebelius pointed to two provisions of the new law.  The ACA created a new board of independent experts that will recommend Medicare payment cuts.  Its recommendations will take effect automatically unless Congress blocks them — and proposes equivalent savings.  According to Sebelius, the panel represents “a big step in terms of entitlement reform that actually doesn’t potentially cause harm to our seniors.”  She also pointed to an HHS effort to create new methods of dealing with people who are eligible for both Medicare and Medicaid because those patients represent a lopsided share of the programs’ costs.

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