Medicaid expansion will leave out many of the poorest: What is wrong with this picture?

In States’ Policies on Health Care Exclude Some of the Poorest, in the New York Times on May 25, 2013, Robert Pear describes how this bizarre situation has come to pass. Basically, it is because the programs established by the Affordable Care Act (ACA) of insurance exchanges and federal subsidies for low-income people, via tax credits, was never the ACA’s plan for the lowest-income Americans. They were supposed to be covered by expansion of the Medicaid program, a federal-state partnership that covers some poor people and varies widely, both in terms of who is covered and what that coverage consists of, from state to state. Recognizing that, coming out of the “Great Recession”, many states were strapped for money, the ACA also included a provision that the first 3 years of the expansion would be paid entirely by the federal government, and that the feds would pay 90% of the cost thereafter.

This, however, was not sufficient inducement for many states to agree to expand Medicaid. They might have if the Supreme Court decision that found the ACA constitutional had not excluded one provision – that, unless the states’ expanded Medicaid they would lose all their current Medicaid funding. The result was the decision in many states to not participate in Medicaid expansion, thus effectively leaving out the mechanism for covering the poorest; tax credits were designed to provide subsidies for those who earned from the poverty level to 4 times the poverty level ($11,490 to $45,960 for a single person) with Medicaid expansion covering those below it. However, many states (virtually all Republican-controlled, although not all those that are Republican controlled) have opted out of this program, leaving those below the poverty level uncovered. The head of the Louisiana Primary Care Association notes that “If the breadwinner in a family of four works full time at a job that pays $14 an hour and the family has no other income, he or she will be eligible for insurance subsidies. But if they make $10 an hour, they will not be eligible for anything.”

 While these states may not have more than half the country’s total population, they do, according to the Times, have more than half the uninsured (they include Texas, the nation’s second most populous state, which has an uninsured rate of about 30%, and Florida, the fourth most-populous, whose legislature has decided not to expand Medicaid despite the support of Republican governor Rick Scott for expansion).  “The Congressional Budget Office estimates that 25 million people will gain insurance under the new health care law. Researchers at the Urban Institute estimate that 5.7 million uninsured adults with incomes below the poverty level could also gain coverage except that they live in states that are not expanding Medicaid.”

The state “featured” in Pear’s article is my home state of Kansas, possibly because of the willingness of the state’s insurance commissioner, Sandy Praeger (pictured here with Secretary of Health and Human Services Kathleen Sebelius, who, the Times does not indicate, was formerly Governor of Kansas, and, before that, Praeger’s predecessor as insurance commissioner), to discuss the situation. Kansas, historically not one of the more generous states for Medicaid, “…provides no coverage for able-bodied childless adults. And adults with dependent children are generally ineligible if their income exceeds 32 percent of the poverty level.” Thus, Ms. Praeger said, “In most cases, she said, adults with incomes from 32 percent to 100 percent of the poverty level ($6,250 to $19,530 for a family of three) ‘will have no assistance.’ They will see advertisements promoting new insurance options, but in most cases will not learn that they are ineligible until they apply.” Whoops. Gotta fix that.

Or not. There is no plan, in Kansas, Texas, Florida, or any of the other states not opting for Medicaid expansion to help to cover these people. Most of the arguments you will hear against doing so cite “costs too much money”, but this is, simply, baloney. The governors and legislatures currently running these states do not, actually, believe in covering anyone (except, of course, themselves and their friends). They believe this is “socialism”. What they believe in is cutting taxes, particularly on the wealthiest individuals and corporations, which Kansas has  aggressively done since Governor Brownback was elected in 2010. The ostensible argument, from the governor, is that low taxes will lead to greater business growth, which will benefit the economy, and help to balance the budget. The first is your basic “trickle down”, proved wrong in every instance since it was first made popular in the 1980s, and the second is a negative tautology – even if business does grow, the extremely low tax rates will make balancing the budget very hard. Indeed, this year Governor Brownback is stumping the state to drum up support for not cutting the higher education budget, but this seems to be falling on deaf ears in the legislature, which sees such spending cuts as yet another opportunity to cut taxes.

Praeger, as insurance commissioner, does not make the decision about Medicaid expansion, but her office is responsible for informing the public about its opportunities to gain insurance on the exchanges (that will be federally-run, because Kansas has also opted out of running its own) and also informing those “poorest of the poor” that the ads for coverage will not be for them. It is obvious that she feels very badly about it; this former state senator and mayor of Lawrence, and former chair of the National Association of Insurance Commissioners (NAIC) is a person with a heart and a concern for people (yes, Virginia, there are Republicans with a heart, and Kansas used to be full of them!). The insurance commissioner does make some decisions; Sebelius, in 2002, blocked the sale of Blue Cross/Blue Shield of Kansas to the for-profit Anthem, stating it would not be in the best interest of the people of Kansas. Many credit that very popular decision for helping her to win the governorship later that year (yes, Virginia, we sometimes elected Democrats as governor!).

It is way too early to know how these decisions will affect elections at either the state or national level. The Times article indicates that “Administration officials said they worried that frustrated consumers might blame President Obama rather than Republicans like Gov. Rick Perry of Texas and Gov. Bobby Jindal of Louisiana [and one might add Kansas], who have resisted the expansion of Medicaid.” However, and very unfortunately, the poorest of the poor do not vote in high numbers. Perhaps the opposite will happen, with those slightly more well-off, who vote at slightly higher rates, crediting the Obama administration for their new coverage, and blaming the state governors and legislatures.

And, of course, this does not even take into account undocumented people living in the US, many of them the breadwinners for families that are composed of citizens, “legal” and “illegal” members.  Children who were born here are citizens (and eligible for programs such as Medicaid and the State Children’s Health Insurance Program, S-CHIP) while often their parents are eligible for nothing. This is not the way to improve health, or to foster family values. But it is consistent with another, anti-immigrant, agenda.

Other first-world countries cover everyone. Not some, many or most people. Everyone. They do it in different ways: Britain has a National Health Service, Canada a single-payer health system which is the government, Switzerland a multi-payer (private) system with a required benefits package and pricing structure. Other countries, Japan and Taiwan, France and Germany, do it differently, but they all cover everyone. We could too.

It’s sad for all of us that we won’t. And it’s life and death for the neediest.
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More data from American Medical News: Millions uninsured on patchwork Medicaid expansion map

Keeping immigrants and all of us healthy is a social task

The Health Toll of Immigration, by Sabrina Tavernise in the May 19 New York Times, documents the decreased life expectancy and worse overall health that accompany immigration to the United States. Focusing on Mexican immigrants in the border city of Brownsville, Texas, but drawing on data about other ethnicities and even time periods, the article provides convincing data that descendants of people who immigrate from Mexico and other, poorer, countries, have, in general, worse health, greater rates of obesity and diabetes, and shorter life expectancies than their parents or those who stayed. The numbers are impressive:  “A 2006 analysis by Gopal K. Singh, a researcher at the Department of Health and Human Services, and Robert A. Hiatt, a professor of epidemiology and biostatistics at the University of California, San Francisco, found that immigrants had at least a 20% lower overall cancer mortality rate than their American-born counterparts. Mortality rates from heart disease were about 16%  lower, for kidney disease 18%  lower, and for liver cirrhosis 24% lower.” It seems to get worse for later generations; “Elizabeth Arias, a demographer at the National Center for Health Statistics, has made exploratory estimates based on data from 2007 to 2009, which show that Hispanic immigrants live 2.9 years longer than American-born Hispanics.”

Some, perhaps most, of this is related to the prosperity of the US, and the easy availability of cheap, high fat, high sugar, high calorie food. One woman, who came to the US at 26 and has since developed diabetes, says she was amazed at seeing hamburgers as big as dinner plates; “I thought this really is a country of opportunity! Look at the size of the food!” Grueling work hours, both parents working (when both are here) make time for preparation of healthful food scarce, and more cash in their pockets allows the purchase of tasty-but-bad-for-you fast food. In addition, there is evidence of increased smoking and drinking as immigrants move into the US underclass, a group particularly targeted by marketing efforts for these substances of abuse.

Traditional diets for most people, including Mexicans, are based on food that is grown or found wild (vegetables, cactus) or bought in bulk (rice and beans). These are high fiber and low in empty calories. Robert Valdez, from the Department of Family and Community Medicine and Economics at the University of New Mexico, is quoted as saying “All the things we tell people to do from a clinical perspective today — a lot of fiber and less meat — were exactly the lifestyle habits that immigrants were normally keeping.” There is some evidence that there may be a genetic predisposition to diabetes in some Latinos, particularly Mexicans, as there is in American Indians; after all, Mexicans are largely a mestizo people with much Indian “blood”. Of course, these observations may be related; the natural diet of native peoples did not provide the environmental  factors (high calories, obesity) needed to trigger clinical diabetes, and so the genes for this did not “die out” as readily as in other groups. The same model is seen in South America; the remote Xingu Indians of the Amazon now have extremely high rates of diabetes where it never existed before the introduction of “white” food (used to refer to the color of the food as well as of the people who introduced it).

The other big factor is physical activity. While many immigrants work in physically demanding jobs, the prevalence of physical activity is not as great as for those living on farms in Mexico. One man talks about losing 75 pounds motivated by the image on the wall of his grandfather, who is 93 and still rides his bicycle every day. Yet, 4 of the 6 siblings of the grandson are obese and have diabetes. Another immigrant talks about walking in her early years in the US and feeling so conspicuous (“a bean in rice”) that she was afraid people would think she was here illegally. This has also been described in African-Americans moving from the agricultural (and very poor) South to a more prosperous, but sedentary, life in the North, and in most families a generation or two removed from farms, whatever their ethnicity. Concepts of what is “enough” food, what is a “good” breakfast or dinner for our children, did not change as quickly as lifestyles did. Our culture does not require physical activity as part of daily life the way farming, including subsistence farming, did, but we fed our children the same number of calories as we did (if we were prosperous farmers) or would have liked to, or more, because it is more easily available. Indeed, these changes are not limited to the US; things are changing for the worse (in terms of health) in Mexico as well; citing the fact that up to 40% of the rural diet in Mexico comes from packaged foods, “Researchers are beginning to wonder how long better numbers for the foreign-born will last.”

These are all factors in the “social determinants of health” – how we eat, how we exercise, how poverty grinds us down and how marketing of harmful substances like tobacco, alcohol, and high-sugar foods take their toll at even greater rates on the poor. This is not to romanticize rural poverty, of people, including children, having to do excessive physical labor in order to survive and thus burn up more calories than they consumed, or to minimize the difference between a rural/farming life which provided enough income to supply those calories and those in which malnutrition claimed lives and health. It is, rather, to point out that some of these terrible conditions ironically protected the health of its victims. This has been observed in the past; beri-beri occurred more in wealthy Chinese who ate hulled white rice than in the poor who ate the rice with hulls that contained the thiamine. In England in the early 20^th century alcoholic cirrhosis was a disease of the rich who could afford highly-taxed spirits, while workers drank watered beer. The image of the wealthy many as obese – and suffering from gout, "The disease of kings1" (all that high-protein food) persists in cartoons.

Dr. Arias, cited above, observes that the health status of immigrant families “…may indeed improve as they rise in socioeconomic status, which in the United States is strongly correlated with better health.” Of course, there is no guarantee that longer time in this country will cause a rise in socioeconomic status; the last decade shows a persistent decrease in the socioeconomic status of most Americans, despite a “recovery” measured by Wall St. stock prices. The answer is not to regress to rural poverty, but it is to address these social determinants. It is to build towns that encourage walking and other physical activity. It should be to make fresh, healthful food widely available. It should involve education in schools about healthful eating, not undercut by junk food available in machines. It should limit advertising for poisons such as tobacco and alcohol. It should make clean air and water a priority, and ensure everyone has access to good health care.

 It should be a no-brainer, but in the politics of the US today, it may not be. Charles Blow in his May 18, 2013 column “Resonance Resistant”, notes that “We all know that anything with ‘social’ in its name activates the conservative gag reflex.” This is crazy; we are social beings. We can do better, and we should.

Hospital charge variation and Medicare equipment fraud: two forms of gaming the "non-system"

There has been extensive coverage of the recently published report from the Center for Medicare and Medicaid Services (CMS) that revealed dramatic differences in the prices charged for medical services between hospitals, not only between regions but also within the same city. “Hospital Billing Varies Wildly, Government Data Shows”, in the NY Times May 8, 2013, reports that “A hospital in Livingston, N.J., charged $70,712 on average to implant a pacemaker, while a hospital in nearby Rahway, N.J., charged $101,945…In Saint Augustine, Fla., one hospital typically billed nearly $40,000 to remove a gallbladder using minimally invasive surgery, while one in Orange Park, Fla., charged $91,00. …In one hospital in Dallas, the average bill for treating simple pneumonia was $14,610, while another there charged over $38,000.” 

Bloomberg News notes that treatment of psychoses ‘showed the greatest price discrepancies, with the most expensive hospital charging $144,523, more than 52 times its cheapest peer,’ and the ‘most common procedure in the data, treatment of simple pneumonia and lung inflammation with complications, had prices ranging from $5,093 to as much as $124,051.’” The Kansas City Star reports, in “New data reveal puzzling differences in hospital charges”, that “… the hip replacement surgery that one hospital in Ada, Okla., charges at $5,304 cost $223,373 at a hospital in Monterey Park, Calif.,” and giving a local example, “In Kansas City, charges for that surgery range from $24,874 at Truman Medical Center Lakewood to $66,268 at the University of Kansas Hospital.”  Among the many other news sources covering this are Wall Street Journal (“Data shine light on hospital bills”), USA Today, AP,  Los Angeles Times, Washington Post, and others.  The LA Times article notes that the data call “into question medical billing practices just as U.S. officials try to rein in rising costs.”

But, of course, this information should come as no surprise; it confirms something not only well-known by hospitals and physicians for a very long time, but repeated reports by investigative journalists over the last several years. These have included  Atul Gawande’s article, “The Cost Conundrum” in The New Yorker June 1, 2009 (my blog coverage in Medicare Costs: "All Politics are Local", June 11, 2009) and Steven Brill’s February 2013 Time magazine piece “Bitter Pill: Why Medical Bills are Killing Us”, which I discussed in Squeezing the needy: a truly flawed financing system for healthcare, March 2, 2013. Hospitals’ “charge masters” list “list prices” for any number of procedures and equipment which, as noted above, vary wildly. Although Medicare performed the study, in fact Medicare does not pay those prices or anything close to them; it sets its own payment schedule for these procedures which does not vary much between hospitals. However, as Gawande makes clear in “The Cost Conundrum”, there is a second problem arising from the fact that some hospitals seem to do – and bill Medicare for – a far larger number of procedures than are done by other hospitals caring for similar populations.

So why do they have these charges and why do they vary so widely? They vary because different amounts of “fixed costs”, the expenses that hospitals have that are not for the individual patient (staff, building maintenance, equipment, etc.) are loaded into these charges, as are more or less profit. They are high because there are occasional payers (fewer all the time) who do link their payments to charges, such as Worker’s Compensation. While Reuters quotes HHS Secretary Kathleen Sebelius as saying "When consumers easily compare the prices of goods and services, (providers) have strong incentives to keep those prices low. But even basic information about health premiums and hospital charges has long been hidden from consumers. These rates can vary dramatically in ways that can't be easily explained," it is not clear that posting the prices, or having smaller differences, would be of much help to most people. 

Large health insurers, like CMS, do not pay the posted “charges”; although they pay more than Medicare or Medicaid, their payments to hospitals are usually tied to Medicare charges as a multiple (e.g., they might pay 2 times Medicare). Of course, the group that most clearly gets screwed are people with no insurance at all, who are in fact billed for the entire list charge. They are, also of course, very unlikely to be able to pay any significant portion of those charges (minus the rare sheik or hedge fund manager who might show up). Therefore, the difference between owing $24,874 to Truman Medical Center Lakewood or $66,268 to the University of Kansas Hospital for hip replacement surgery may be largely theoretical to them, but in the meantime, it can, and frequently does, absorb their life savings, ruin their credit, and throw them into bankruptcy. And there are “middle class” uninsured families who might be able to pay off $24,874 over a few years, but for whom $66,268 is more than they could pay in a lifetime. (Fortunately, most hospitals, including I know the University of Kansas Hospital, do develop payment plans for patients, which, if they make payments that are agreed on can preserve their credit.)

Meanwhile, in “Medicare anti-fraud effort has Missouri roots” (Kansas City Star May 7, 2013), Lindsey Wise, the paper’s Washington correspondent, describes how the concerns of a St. Louis physician that she was receiving requests from medical device sellers for approval of medical equipment that she hadn’t ordered, and that it turns out her patients hadn’t requested, led her senator, Claire McCaskill, to hold federal hearings. As noted by Sen. McCaskill, “Most Americans have seen ads on TV or received calls or letters promising medical equipment ‘at little or no cost to you,’”  but, as she adds, “there is always a cost to you, because it is paid for by federal tax dollars.”  Both Dr. Kennedy’s patients and others testifying before McCaskill’s committee said they often receive several calls per day from device retailers. Investigations of two companies that had faxed unsolicited requests to Dr. Kennedy discovered, respectively, a 68% and 92% “error rate”, a euphemism for what may well be fraud.

Why mention these two separate issues, Medicare fraud by medical device companies and huge charge disparities among hospitals for the same procedures, in the same blog post? While definitely different – the device sellers, at least those who are guilty of such practices (“Please don’t convict the entire industry,” says the executive director a trade association that represents medical equipment companies), are unscrupulous and perhaps committing fraud, while the hospitals are not – they share they key characteristic of seeking profit by “gaming” the system. Medicare pays for medically necessary equipment (including scooters, oxygen, diabetes monitors, etc.) for patients who need them, and some companies selling them do aggressive direct-to-consumer marketing (as do pharmaceutical companies), to try to increase their sales. Hospitals post exorbitant “prices” for their services that bear little relationship to the cost of providing them (as proven by the wide variation) in hopes that the occasional payer will pay them, or at least pay a percentage of them (unlike Medicare’s fixed reimbursement). What they have in common is the exploitation of a nonsensical non-system of health care in which profit is pursued by taking advantage of its intrinsic disorganization.

For medical supplies, while Sen. McCaskill’s committee discovered many cases where patients did not want the equipment physicians were asked to approve, there are many others cases in which the patient is convinced that it would be good to have, say, a scooter that they don’t have to pay for --  even when the doctor thinks it is not necessary or might even be harmful (for example, when a person who doesn’t exercise because of their weight gets a scooter and does even less activity and thus gains more weight). Fraud is fraud, should be investigated, and it appears that it is being done.

For hospital charges, however, the solution is different. It would be to have a national payment system that, possibly with regional differences based on the cost of labor and other variables, pays a fixed amount for services, as does Medicare – a single payer system. It probably needs fixes (Medicare may currently pay too little, requiring private insurers to subsidize that care; certainly the law should allow the uninsured to be billed at no more than Medicare would pay), but a little rationality would go a long way.

Medicaid Expansion: Do we care for people or not?

A cornerstone of the health coverage reforms in the 2010 Affordable Care Act (ACA) was the expansion of Medicaid to a large population currently ineligible for this benefit. This was intended to cover those who work but have low wage jobs that neither offer health insurance nor sufficient pay to buy health insurance on the private market. (This latter is, in itself, a a very large obstacle; most people in “high-wage” jobs – considered by the Department of Labor to be above about $45,000 a year -- would have great difficulty paying for private health insurance.) In most states, Medicaid covers two populations: children in very poor families and their mothers (in general, if there is a father in the home, the family is not eligible) and poor people in nursing homes (who may well not have been poor until they spent time in a nursing home). Although the first group is much larger, the latter costs much more money because the health care services that they require are so much greater.

The standards for income eligibility vary from state to state, but in many states, including Kansas and Missouri (the states on either side of the Kansas City metropolitan area) it is well below the poverty level. Childless adults, unless they qualify for physical or mental disability, are rarely eligible for Medicaid no matter how poor. Medicaid is a federal/state shared program; depending upon mean state income, the federal government pays 60-80% of the cost. In order to make expansion more acceptable to many states that are already financially strapped, ACA provides for the federal government to pay 100% of the cost of the expansion for the first 3 years, and 90% thereafter. But, nonetheless, this expansion is in jeopardy in many states, because, essentially, the governor, legislative leaders, or both, oppose having the government insure most people. The decision by the Supreme Court that upheld ACA struck down the plan to pull all Medicaid funding from states that did not opt for expansion, thus seriously weakening the leverage that the federal government has to encourage it.

“Paul Nelson works for $10 an hour at a Kansas City car shop, suffers from diabetes and can’t afford the medicine to deal with it,” write Steve Kraske and Jason Hancock in the Kansas City Star, April 27, 2013. In “Nixon’s pleas for Medicaid expansion go unheeded”, they describe how “The working father still earns too much to be eligible for Missouri’s Medicaid program. That’s why he was hoping — praying may be a better word — for an expansion of the program this year so that he could get health coverage.” Nelson is the kind of person who might benefit from Medicaid expansion, but is probably not going to get it because the Republican-controlled Missouri legislature is so opposed to expansion, despite the strong lobbying efforts of Democratic Governor Jay Nixon, who “…displayed more gusto for the cause than any issue since he became governor in 2009…”  is now regarded as “…dead, buried, gone.” Nixon had considered the federally-funded expansion a “no-brainer”, and the fact that “An early February poll by American Viewpoint, which usually surveys for Republicans, found that voters backed expansion by 56-35 percent once they heard ‘a balanced set of arguments for and against the proposal,’” has not swayed the legislature.

In Kansas, Republican governor Sam Brownback has been playing it close to the vest regarding this issue, but Kansas legislative leaders are very strongly opposed to expansion. Brownback engineered the elimination of any opposition to his very conservative policies by running opponents to “moderate” GOP senators (the House was already in the control of the far right) in the 2012 primaries. With major funding from the Koch brothers, abetted by the traditionally low and skewed-to-the-base turnout in primaries, almost all were victorious; even the President of the Senate, Steve Morris, a rancher from far southwestern Kansas, was defeated by a young and inexperienced, but well-financed, challenger. On one issue, funding for higher education, Brownback is currently staking himself out as a relative moderate, compared to legislative leaders, as he is opposing the cuts that they have proposed. If perhaps a bit suspect, since not only did he engineer their victories but his prior budgets have significantly cut higher education, it could potentially signal a willingness to do something similar with Medicaid.

Meanwhile, as the continuation headline for the Star article, “Obama’s switch hurt efforts here”, makes clear, the administration has added its own disincentive to that of the Supreme Court by backing off on cutting Disproportionate Share (DSH) payments to hospitals that take care of a high percentage of Medicaid and uninsured patients. This weakened the commitment of hospitals and their agents, the state hospital associations (and, even more the Chambers of Commerce, which never really support publicly-funded health insurance expansion in any form) to supporting Medicaid expansion. Most still do, though, because they have been counting on expansion of Medicaid to increase their revenue from patients (like, say, Paul Nelson) who were previously uninsured and make up for cuts in Medicare payments, which are already taking place.

But much more important than the financial interests of hospitals or doctors, much more important than the posturing of politicians, is the impact on actual people. Paul Nelson is one person, but there are hundreds of thousands of people in his position in Kansas and Missouri, and many millions in the US. Their numbers are increasing; in an article in the Washington Post about the “Governments may push workers out of employer health care and into health exchange”, cited by Don McCanne’s “Quote of the Day” for April 26, “The owner of Olive Garden and Red Lobster restaurants, for example, began experimenting last year with putting more workers on part-time status.” While the focus of the article is on insurance exchanges, the probability is that low-wage workers who are put on part-time status would be more likely to qualify for Medicaid expansion.

Opponents of Medicaid expansion, in Missouri, Kansas, and elsewhere, often sound concerns about the cost, despite the fact that the federal government will pick up almost all of it. On the finances, they are wrong. But of greater concern they are not really motivated by their flawed understanding of economics, they are motivated by a lack of concern for people who are not like them, and a commitment to policies which expand the wealth of the richest individuals and biggest corporations at the expense of regular people. As the “American Viewpoint” survey points out, it is not the belief of most people, who do care about the health needs of themselves, their friends and neighbors and relatives. And, maybe even, other people who they don’t know.

The ACA, even with Medicaid expansion, even with insurance exchanges, even without changes to DSH or Medicare, does not cover everyone. Glaringly missing are those who, although without papers, are here, working in our community, living by our sides, often paying in through taxes (sales for sure, and frequently income) and sometimes needing health care, as well as others who fall outside the complexities of health insurance coverage. What we really need is an expanded Medicare-for-all, “everyone in, nobody out”. This is the real rational plan. But ACA does cover children up to the age of 26, it will prevent insurance companies from denying coverage to those with pre-existing conditions, and if states proceed with Medicaid expansion, will cover a whole lot more people who desperately need it.

People like Paul Nelson. People like the folks across the street. Maybe people like you. Our people.