The Republican tax overhaul significantly undoes the Affordable Care Act by removing the individual mandate to purchase health insurance. Next, the GOP House has their sights on Medicaid reform.
Medicaid expansion is a cornerstone of the Affordable Care Act. The left treats it as sacrosanct, and the right simply abhors it. I have had the privilege to begin my career as a resident physician in Louisiana before and after the state expanded Medicaid. Simply, expansion of Medicaid, the state-federal program for low-income and disabled Americans, will not be society’s cure for indigent health care. It’s equivalent to putting a Band-Aid on a brain aneurysm.
Many of the characterizations of the GOP Senate’s previous healthcare plan as inadequate are reasonable and debatable in a real-world context. However, previous debate missed the point of true reform. The real issue at hand is that the Republicans have an opportunity for pure free-market reform that would actually create the equity the left craves. Continued Medicaid expansion will not be a sustainable long-term solution.
First and foremost, Medicaid is simply bad insurance. The definitive study on the subject in the New England Journal of Medicine noted no substantial improvements in physical health outcomes for two years in patients randomly selected for either having Medicaid or no insurance in Oregon. That’s not comparing Medicaid patients to those with private insurance—it’s comparing Medicaid patients to those with no insurance at all. To be fair, there are certainly positive benefits to having any insurance, and there are some statistical nuances with the study. The differences in outcomes are at least minimal. But they aren’t nearly as large as they should be, given the purpose of insurance and what the program costs.
Medicaid spending will represent nearly half of Louisiana’s $28.6 billion budget in the next fiscal year. Furthermore, Louisiana lawmakers had to add $368 million more in federal funding in May 2017 because they misjudged the age and health status of those who joined. It seems mildly intuitive that the billions spent on Medicaid in the state could have been used in a more efficacious fashion. After all, what are we paying for?
It can be hard for those with Medicaid to find good care, since physicians make less money for seeing its recipients. In Louisiana, Medicaid only pays about 71 percent of what Medicare, the government program for those over 65, will pay a physician for a given procedure. And private insurance will pay roughly 150 percent of the Medicare rate. It doesn’t take too much insight to understand why nearly a third of doctors simply won’t see Medicaid patients. But that’s also not fair to people who need care.
Furthermore, these Medicaid plans are largely managed care structures: That is, Medicaid pays a private entity to manage a fixed set of dollars per patient. This creates incentives to gain patients or to “cover lives” without wanting to pay for services or to “cover their care.”
Under excellent leadership, our neurosurgical service runs a free-care clinic. It takes care of all patients regardless of their ability to pay. This has taken place pre- and post-Louisiana’s expansion under the Affordable Care Act. Simply, the physicians in the clinic evaluate patients for surgery on the nervous system. This tends mostly to be spinal surgery.
Even then, it is without a doubt easier to schedule and perform surgery on the patients without Medicaid than it is on patients with Medicaid. The amount of administrative red tape for treating Medicaid recipients is stifling. Patients with significant pain are turned away because their specific disease diagnosis code does not meet the standardized peer-reviewed requirement for surgery approval. This can be sickening, frustrating, and disheartening.
The cycle repeats as such. Patients are told they need surgery. Several days later they are told their insurance won’t pay for it unless certain qualifying steps happen first. Inevitably, they all say the same thing in a soft tone of reluctant defeat: “But . . . but I have insurance . . .”
Who on the elite left would like to explain to these patients the premise that, “Well, yes you have insurance, but your insurance isn’t like ours, it’s Medicaid . . .”?
This is not equity.
We should not be comfortable with simply throwing one of our worst insurance options at our most vulnerable populations. To put it in a more perspicuous prose: It’s morally wrong. I sincerely doubt that any Democratic lawmaker in Louisiana, let alone the United States, would ever want or specifically seek Medicaid insurance for themselves or their family. However, it’s worth asking: How many Republicans would want a family member to have no insurance rather than at least Medicaid coverage?
The tragedy is that there exist sincere options for a free-market “universal” healthcare apparatus. This is in-line with some of the deepest philosophical thinking on the right. Libertarian Friedrich Hayek in his definitive work The Road to Serfdom wrote, “There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health.”
There are a variety of truly thoughtful, still aggressive policy ideas that could challenge our assumptions for social justice from the right.
For example, why should we continue to link healthcare insurance to our employer? Employers generally are not required to provide food, clothing, and shelter. So why should they provide healthcare? This is a substantial tax loophole, and it is a vestigial appendage from the wage restrictions of the Great Depression.
Perhaps it’s time to finally consider the negative income tax? Perhaps it’s time to abolish segregated social services and consider a basic guaranteed income for every citizen to spend on the needs they deem most fit? Maybe we could actually make moves for price transparency in healthcare, embrace a savings account platform, and look to reduce moral hazard in healthcare?
Republicans have a once-in-a-generation opportunity for real transformative reform that could help all people. However, we are faced with more of the same partisan pugilism. For a change, the Senate should look to Milton Friedman, who said, “One of the great mistakes is to judge policies and programs by their intentions rather than their results.”
Based on results, each party is failing Americans on health care.
Richard Menger is a neurosurgery resident at LSU Health Sciences Center and a graduate of the Harvard Kennedy School of Government. He is a member of the AEI Enterprise Club. This is work published through the Foundation for Economic Education.
