Heritage’s Proposed Welfare-ization of Medicaid.
Medicaid is a long-standing health program for low-income Americans. The Heritage Foundation seeks to restructure it as a welfare program instead of a health program. It wants to introduce work requirements, lifetime caps, asset tests, and targeted time limits to re-make Medicaid along the lines of state welfare programs. This is the opposite direction from the past sixty years of program progress.
Heritage:
“CMS should also:
1. Clarify that states have the ability to adopt work incentives for able-bodied individuals (similar to what is required in other welfare programs) and the ability to broaden the application of targeted premiums and cost sharing to higher-income enrollees.
2. Add targeted time limits or lifetime caps on benefits to disincentivize permanent dependence.” p. 468
Talking Points:
Medicaid was established in 1965 to cover health care for the poor. It started as tightly linked to welfare eligibility categories (Old Age Assistance, Aid to Families with Dependent Children, Disability Assistance, Foster Care, and Aid the Blind). That linkage promptly began to fray. Over time, pregnant women, children, two parent families, spend down individuals and families particularly in nursing homes, and then single individuals and couples without minor children living at home were added. In 1995, the Aid to Families with Dependent Children was eliminated and block granted to the states; the Medicaid statute was altered to give states wide latitude in setting Medicaid’s income rules and eligibility for families. In 1998, the CHIP program offered states increased matching funds to cover uninsured children with higher incomes.
States like California under Governor Reagan and New York under Governor Rockefeller began to cover adults not linked to the federal welfare programs in the early 70’s. In the 80’s states like Arizona and Tennessee secured federal §1115 waivers and matching funds to cover their populations unlinked to the old federal welfare programs, and many others followed suit. The Affordable Care Act in 2010 built upon this progress and established Medicaid as coverage for all uninsured Americans with incomes less than 138% of FPL (about $15,000 for an individual); it simplified eligibility rules dramatically, ended the benefits cliff, and ended the outmoded asset tests for children and families.
The Medicaid program has never had work requirements, targeted time limits, or lifetime caps on benefits. Why? It’s because they make no sense for a health care program like Medicaid. The lifetime and annual benefit caps used by some private insurers were outlawed under the ACA.
Can you imagine telling a nursing home resident (the primary people with long duration, expensive benefits) your benefit limit is up, you have to get off the program and get out of the nursing home? Can you imagine telling the parents of an infant in the very expensive neonatal ICU, sorry, you have exceeded your benefit cap; we have to terminate your child’s coverage, hospital stay and most likely their life? Can you imagine telling a family with a young child (or adult child) with a severe disability, sorry but your time on Medicaid is up, get off the program.
Most families go on and off the Medicaid program as their family incomes fluctuate with their jobs, and their incomes go above or fall below the program’s income limits. Whereas many of the elderly and disabled live on fixed and unchanging incomes; they are far more likely to stay on the program with some consistency as their economic situations do not change as much.
Health care coverage is not the same as welfare programs in multiple respects: first, you want patients to have prompt access to preventive services; second, you want continuity of care and treatment; third, the doctor or the hospital is the one getting paid not the patient, and fourth, when the patient is very sick, they have limited ability to work and produce income. Medicaid does not pay the rent, the utility bills, the grocery bills, or put gas in the car to get to work; it is not a cash benefit like welfare or a program like Food Stamps. Heritage’s efforts to introduce these welfare concepts into a health care program simply make no sense. Instead, the health system(s) should be working with patients to enable, support and incentivize the types of behavior changes that improve health outcomes, such as staying current with your medications, weight loss or changing diet or promoting exercise or reducing and eliminating substance abuse; these also reduce program costs.