11 March 2019 — 0729 mdt
Democrats in Montana’s legislature have perishingly little leverage to extend and protect expanded Medicaid
Sometime this month Rep. Ed Buttrey (R-Great Falls, HD-21) is expected to introduce his bill, LC-1251, to renew expanded Medicaid in Montana. There are news reports that the bill is pretty much in final form – but it remains hidden in Buttrey’s pocket, where he apparently intends to keep it as long as possible to (a) deprive its opponents of time to organize a campaign against its most evil features, and (b) sucker as many Democratic legislators as he can into signing onto legislation that hurts Montana’s least fortunate residents.
Reportedly, the bill will impose strict and wide ranging work requirements on expanded Medicaid, and other changes such as asset tests that could reduce the number of low income people eligible for the program.
Experts at George Washington University’s Milken Institute School of Public Health studied preliminary versions of the bill, concluding (report, PDF) that:
- Work requirements could cause between 26,000 and 36,000 low-income adults to lose Medicaid coverage (30% to 41% of the 87,000 beneficiaries aged 19 to 59 years old).
- Raising the monthly premiums that must be paid will also lower participation, leading about 9% to drop coverage, which would be 5,000 to 7,000 people in addition to those lost due to work requirements. Combining the two policies, between 31,000 and 43,000 low-income Montanans would lose Medicaid coverage due to the policies proposed.
- Ending 12-month continuous eligibility will disrupt the continuity of health care, making it more difficult, for example, for a diabetic to get his or her medications or insulin all year, and also increase administrative costs. [Executive summary, page 1.]
Although Buttrey’s bill has changed since the GW report was issued, the changes probably won’t change the numbers a great deal. His bill would reauthorize expanded Medicaid, a program that’s helping tens of thousands of Montanans despite it’s bastardized nature, but drastically shrink the number of low income people who qualify for the program.
Attacks on expanded Medicaid in MT are part of a national campaign
The changes Buttrey’s proposing are not unique to Montana. Similar attempts to gut expanded Medicaid are being made by Republicans in red state legislatures across the nation. In Utah, the Republican dominated legislature butchered to the point of de facto repeal last fall’s successful citizens initiative to provide expanded Medicaid in the Beehive State. Similar efforts are underway in Idaho, another state that approved an initiative adopting expanded Medicaid.
These efforts to sabotage health care are consistent with the Trump administration’s long term goal of slashing domestic spending:
…the White House plans to expand its effort to cut anti-poverty programs. It will propose strict new work requirements for “able-bodied” Americans across a range of welfare programs, including health care, housing and nutrition assistance. [Washington Post, 9 March 2019.]
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The request [for $8.6 billion more for Trump’s wall] will come as part of a broader proposal to cut $2.7 trillion in spending over 10 years for programs including welfare assistance, environmental protection and foreign aid. At the same time, Trump will seek to boost the military’s budget from $716 billion to $750 billion next year. [Washington Post, 10 March 2019.]
Opposition to Medicaid, indeed to all government associated health programs, is ideological and has deep roots in movement conservatism. In The Great Risk Shift (2006; 2019 update due in late March), Yale economist Jacob Hacker reveals that many opponents of government supplied health insurance oppose not only government provided insurance, but also all health insurance. These critics cite Mark Pauly's notorious argument that health insurance creates moral hazard, inciting people to overuse the health care system. And they warble paeans to concepts such as “personal responsibility” and “skin in the game.”
Malcolm Gladwell, Arron Carroll, and the late Ewe Reinhardt, solidly refuted Pauly’s moral hazard thesis, but the canard lives on because it’s so useful for denigrating the moral character of low income Americans. Here’s Carroll’s comment:
Basically, the moral hazard is the idea that people insulated from risk behave differently than people exposed to risk. For instance, once you have good car insurance, you may drive less carefully, because you are more protected. In health care, some apply to moral hazard to posit that once you have good insurance, you are more likely to use health care — even if you don’t need it.
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As a theory, the moral hazard in health care was first described only about 40 years ago in a seminal paper by Mark Pauly. And it’s still just a theory. Like many theories, it has its good points and bad; it’s not an undisputed law. For instance, recent work by John Nyman explains that the moral hazard may actually do good in health care by encouraging people who otherwise would not seek care to do so. We want sick people to get care.
…If I made colonoscopies free tomorrow, no one would start picking them up by the dozen. If I declared no one would ever have to pay for chemotherapy again, you wouldn’t ask for extra. If surgeons refused to accept payment for appendectomies anymore, would anyone go and get one just for the hell of it? We have a hard enough time getting people to do the things we want them to do to be healthy without having to expose them to more hardship to get them. … No one loves going to the doctor.
The other philosophical objection to government involvement in health care is that it erodes “personal responsibility.” Hacker observes:
Say this for the Personal Responsibility Crusade: It has a vision and a goal. Critics of public and private programs of insurance know what they are against, and they know what they are for: greater personal responsibility and individual self-reliance, propelled by aggressive government policies that erode the bonds of shared fate and undermine the systems of social insurance that once linked Americans across lines of class and economic vulnerability.
“Personal responsibility” means you are on your own, and that there are certain forms of social organization that are forbidden to the “responsible.” One might suppose that working with friends and neighbors to share risk makes sense — after all that’s the foundation of all measures people take to pursue prosperity and security as a community — but “personally responsible” people do not pool risk by forming insurance associations because that’s just a dodgy way of transferring wealth from the lucky to the unlucky. No, the truly “personally responsible” self-insure with health savings accounts. They neither lean on their neighbors in times of misfortune, nor come to the aid of neighbors who suffer misfortune.
This obsession with personal responsibility is what’s behind Buttrey’s work and work reporting requirements, assets tests, co-pays, and increased Medicaid “premiums” (in this context, a premium is actually a tax on the income of low income people). If people have “skin in the game,” Buttrey’s tough love caucus reasons, they won’t be corrupted by moral hazard, and Montana’s taxes can be lower.
The genesis of the Democrats’ diminished leverage
Elections have consequences. Last fall, Montana’s progressives tried an end run around the legislature, but got tackled in the backfield. Initiative, I-185, which would have expanded Medicaid, and partially paid for it with a whopping increase in the tobacco tax, was rejected by the voters following (a) an expensive, ruthless, and devastatingly effective, anti-I-185 campaign paid for by the Tobacco Boyz, and (b) a bungled — badly bungled — pro-I-185 campaign.
The defeat of I-185 coupled with the Montana Democratic Party’s inability to win a majority in even one chamber of the legislature — the GOP controls the MT House 58–42, and the MT Senate 30–20 — means Democratic legislators have no direct bargaining power in the debate.
The balance of power is held by Republican leaning members of Montana’s business community who understand that expanded Medicaid brings hundreds of millions of dollars into the state annually while improving business productivity via a healthy workforce. That’s why Gov. Bullock continually points to the economic benefits of extending expanded Medicaid, and always pitches his case to the private enterprise sector. He, and those who support the program, hope that Republican business leaders who understand that expanded Medicaid is in their enlightened self-interest will lobby Buttrey, et al, to tamp down their ideological aversion to government health care programs and to renew, however grudgingly, expanded Medicaid.
As Montana’s legislature debates whether to extend expanded Medicaid, and if so, in what form, its members should refresh their understanding of social insurance and its benefits. Therefore, a long closing quote from Hacker:
All insurance pools risks. Only social insurance pools risks on terms that enable the poor as well as the rich, the aged as well as the young, the ill as well as the healthy to afford protection. The crafters of the Economic Security Act [renamed the Social Security Act of 1935] believed that insurance had to be available able and within the means of those who needed insurance most. At the heart of this belief was a simple conviction: broadly distributed threats to economic well-being-sickness, injury, disability, unemployment, penurious old age-were not the responsibility of individuals alone. They were a widespread and often unavoidable able feature of an interdependent industrial society. And because they were, the cost of these risks should be distributed widely across the citizenry, not concentrated on those unlucky enough to experience them — a goal made possible by the unique power of government to compel participation and require contributions. Government could pool the risks of millions of citizens. It could guarantee that even workers of limited means were able to afford basic protection. And it could require that everyone contributed to this common pool throughout their lives, rather than waiting until they fell on hard times or disaster struck, when — for all but the richest — it would be too late.
Today, critics of Social Security often describe it as “outmoded” — a program built for a very different set of circumstances. But the ideal of insurance wasn’t meant to deal with the calamity of the Depression; it was meant to provide a secure foundation for economic nomic activity and advancement for decades to come. The architects of the Social Security Act contrasted insurance for working Americans with relief for those who were already destitute. Relief was reactive, demeaning, inevitably stingy. Insurance was proactive, uplifting, generous. Relief was backward looking; insurance was forward looking. By creating a basic floor of protection, it allowed Americans to seize on economic opportunities they might otherwise view with anxiety and fear.
Medicaid, although funded differently from Social Security and Medicare, should be considered a form of social insurance, a program for lasting health care security. It should not be treated as a welfare program to temporarily lift the unfortunate from their economic predicament. Let us hope that there are enough enlightened Republican members of the business community to convince Buttrey and his tough lovers to do the right thing: to simply remove the sunset from the current law governing expanded Medicaid. Otherwise, tens of thousands of Montanans will be hurt.