Is It True

My dear friend Paul Ryan, who has his eyes firmly glued on the white house, recently released a 200-page report with lots of figures and references and ibid’s claiming that all the anti-poverty programs run by the government are worse than useless and should all be scrapped.  He’s got some ideas on why people are poor:  they come from or create broken homes.  They have no education.  They don’t work.  They work part-time.  They receive medicaid.  Wait, what?  Here’s what the report claims:

“Medicaid coverage has little effect on patients’ health,” the report says, adding that it imposes an “implicit tax on beneficiaries,” “crowds out private insurance” and “increases the likelihood of receiving welfare benefits.”

Is this true?

There are a lot of references listed at the bottom of the page.  Let’s look at some of them.

1. The Medicaid and CHIP Payment and Access Commission. Children on medicaid or CHIP are more likely than privately insured or uninsured children to be in fair or poor health…and to have more problems like asthma, ADHD, autism, etc.  Well, yeah.  Medicaid helps poor people.  Poor people often have poorer health.  That doesn’t mean that medicaid causes poorer health.

Oh, and I love this one.  Adults younger than 65 who are enrolled in Medicaid are sicker than those who are privately insured or uninsured.  That’s because you have to be disabled to get on Medicaid if you are younger than 65!

2. A study out of Stanford by Baker and Royalty: Medicaid Policy, Physician Behavior, and Health Care for Low Income Population.  Medicaid patients are more likely to be treated in hospitals or public clinics than in private physician’s offices.  OK, that’s true. Medicaid pays 70% or so of what Medicare pays, which is way less than what private insurers pay.   Baker and Royalty assert that this is not an efficient source of care.  But it’s the cheapest.  One could argue that if reimbursement was better more patients would get treated by private physicians.  Assuming that really is better.

3. The Oregon Health Insurance Experiment.  Medicaid patients use more health care than uninsured patients.  Well, duh.  What, the goal is to keep people from using health care at all?  If that were the case we’d be spending all our money on promoting exercise and salads, not invading countries.  And the report chooses to ignore the rest of the story, which is that the medicaid patients also had lower out-of-pocket expenses, lower medical debt, and better physical and mental health.

4. The Oregon Health Insurance Experiment II.  Medicaid coverage does little to improve people’s health.  That’s because health care does not improve people’s health.  People do.  Poor people have fewer options for healthy lifestyle choices.  Mr. Ryan’s report also plays down the rest of the story, which is that having medicaid also increased the use of preventive services and eliminated out-of-pocket catastrophic debt.  Which is what insurance is supposed to do.

5. Rachel Rapaport Kelz in an article entitled Morbidity and Mortality of Colorectal Carcinoma Surgery differs by Insurance Status.  Medicaid patients are more likely to get sick during their hospital stay.  This is another entry in the duh category.  This is not because they have Medicaid.  It’s because they are poor.  And because they are poor, they have fewer healthy lifestyle options.  Because they have fewer healthy lifestyle options, they’re sicker.  Put them in the hospital, they’re sure to get sicker yet.

How about that “implicit tax?”

6. The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market, by Brown and Finklestein.  “The premiums that one might have paid for existing private policies go to pay for benefits that would have otherwise been provided by Medicaid.”  I have no idea what that means.

And finally, the topper:  Being on Medicaid increases the likelihood of receiving welfare benefits.

7. Moffit and Wolfe: The Effect of the Medicaid Program on Welfare Participation and Labor Supply.  A rise in medicaid benefits increases the likelihood that a person is on AFDC (welfare) and decreases the likelihood that the person has a job.  Somebody needs to explain cause and effect to Moffit and Wolfe.

This is all to say that Medicaid does not cause anyone to be poor, be on welfare, have poor health, etc.  Medicaid is a health insurance program for the poor.  Being poor therefore increases the likelihood that you’ll be on Medicaid.  It’s not a great system and the care isn’t that good, but it’s not a failed program.  The war on poverty may indeed be lost, but not because of Medicaid.  It’s being lost in spite of Medicaid.

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