Family Story Shows Why Medicaid Matters To All Of Us

August 14, 2011

Some of you may recall my young guest blogger Laura, who told us why Medicaid matters to her and her family. Turns out there’s much more to the story — the family’s years without Medicaid benefits.

These tell us, in a different way, why we should be so concerned about the Medicaid cuts states are making now and bigger, broader cuts that may result from this new federal debt deal we’ve got.

The family’s story begins when Laura’s older brother Matthew was born. Like Laura, he came into the world with a form of mitochondrial disease, an incurable disorder that prevents body cells from manufacturing energy properly.

At the time, both parents — Rylin and David — were school teachers with a combined annual income of $60,000, health insurance and a home they were easily enough paying the mortgage on.

The health insurance plan called for them to pay 20% of costs. What with surgery, tests, prescriptions and the like, their out-of-pockets in the first year alone totaled $200,000. Even the costs of parking at the hospital were beyond their means.

With no resources for home health care, Rylin had to quit her job to care for Matthew — and three years later for Laura as well. The couple refinanced their home three times. They put some medical expenses — these totaling well over $3,000 a month — on credit cards, though they’d steered clear of consumer debt while childless.

Social workers told them repeatedly that they wouldn’t qualify for public assistance because their income was too high. Turns out they were eligible for a state program for children with special health care needs, which is in part federally-funded under Title V of the Social Security Act.

Once they learned this, they enrolled and got several years of help with medical costs. But then David got a raise, pushing the family above the income eligibility ceiling.

The other option for them was a special waiver program that lets Indiana use Medicaid funds to provide home and community-based services for children with disabilities. But signing up meant getting put on a waiting list. And waiting — ten years for Matthew and seven for Laura.

Meanwhile, the family cut its grocery bills back to $40 per week, bought second-hand clothes and went without anything that wasn’t absolutely essential.

The parents still had to make some agonizing medical choices. Their insurance didn’t cover the biopsies needed to diagnose their children. So they had only one child diagnosed. Four specialists wanted to see Laura monthly, but the parents had to limit visits to generally once every three months.

Thanks to Medicaid, the family is no longer accruing significant medical debt. And, Rylin says, she and David “are able to work on meeting [the children’s] needs in a more appropriate way.”

But their situation is tenuous.

Indiana has already cut Medicaid vision and dental benefits for adults. People in the know say more cuts are likely to follow. And that’s under Medicaid as we know it now, with the federal government paying more than half of Indiana’s costs.

Health care costs are rising. And we’ll soon have a new Congressional committee looking to reduce the deficit by $1.5 trillion over the next 10 years.

Medicaid will be protected from the automatic spending cuts that will kick in if a majority of committee members can’t agree to a plan that meets the target — and then gets passed by both houses of Congress and signed by the President.

But it’s by no means clear that a committee majority won’t agree to something that will shrink projected federal Medicaid spending. They’re likely to figure that American voters won’t raise hell, as they will if they get wind of tampering with Medicare or Social Security.

We don’t much like the idea of safety net spending cuts — well, most of us don’t. But we don’t think they could affect us.

The Rodgers’s story shows how mistaken we are. Two financially-responsible, middle-class people with good jobs and employer-provided health insurance wind up with such inordinate medical expenses that they can’t always buy enough food.

A child who recalls how “very, very scary” that was. She thinks that elected officials, whatever their party, need to understand that families like hers “are important parts of the country.”

Me too.


Medicaid Block Grant Not The Only Threat To Health Care For Low-Income People

July 7, 2011

Economist Jared Bernstein reminds us that cost shifting is not cost saving — this in connection with Congressman Paul Ryan’s plan to convert Medicare to a voucher system.

I wonder whether the President and his White House advisors have their minds around this obvious fact — or frankly, how much they care.

What’s got me wondering is a new brief from the Center on Budget and Policy Priorities that takes us through the complexities of a proposal for Medicaid savings that the White House has offered up as part of its deficit reduction plan.

It’s called a blended rate because what it would do is create a single rate for the federal match that each state gets to help cover the costs of insuring low-income adults and children under Medicaid and CHIP (the Children’s Health Insurance Program).

Basically, the federal government now pays a fixed percentage of states’ regular Medicaid costs and a higher percentage for their costs of insuring children enrolled in CHIP.

Under the Affordable Care Act, it will initially pick up the full costs of ensuring people who become newly eligible in 2014, when the minimum federal income cut-off rises in 2014 and childless adults gain a right to coverage. It will then cover somewhat lower percentages, bottoming out at 90% in 2020.

States that expanded Medicaid coverage to childless adults before the ACA was passed will still get a match for them, even though they’re not newly eligible. This match phases in, reaching 100% in 2020.

In short, we’ve got a mix of matching rates — some higher than others. The blended rate would replace them with a single match. Which may sound okay until we learn that states would get significantly less than they would under current law.

Back in April, the White House issued its overall framework for deficit reduction. Savings from Medicaid totaled $100 billion over the first 10 years. CBPP President Robert Greenstein says that as much as $65 billion would have to come from the blended rate.

States would apparently realize some modest savings in administrative costs. But they’d be stuck with the rest of the loss from the replacement of their current and prospective matching rates.

This doesn’t mean they’d make up the difference out of their own revenues. Anyone who wonders what they’d do need only look at what they’ve already done to reduce their Medicaid costs.

They’d cut payments to health care providers, though current reimbursement rates are already so low that many physicians, particularly specialists won’t treat Medicaid participants.

They’d scale back benefits they don’t have to provide to get federal funds, e.g., dental care, eyeglasses and hearing aids, home health services, organ transplants (!).

The President apparently opposes the House Republicans’ Medicaid block grant proposal. “Not on the table” in the deficit reduction talks, says his top Medicare-Medicaid administrator.

But the impacts of the blended rate could be much the same, though probably less drastic.

The federal government would spend less, but not by reducing the costs of providing the health care that low-income people need. It would save by dumping a bigger portion of the rising costs on the states.

The states would then try to minimize the shifted costs. They too would probably rely more on cuts than on genuine cost-reduction strategies, e.g., better quality control, coordination and preventive care.

Ultimately low-income people, including children, would pay — with their health, in some cases their lives — to reduce the federal deficit.

This, I trust, is not what the President had in mind when he embraced “shared responsibility and shared sacrifice.”

NOTE: This posting and my recent cross-posting from Laura’s Life are part of  a Medicaid blog-a-thon organized by MomsRising — a virtual grassroots community that acts on issues that affect mothers and families.

UPDATE: MomsRising now has an online listing of all the blog-a-thon postings, with links. You can find it here. More member Medicaid stories are available in a story map.