by Linda Gorman
Gov. John Hickenlooper wants yet another expansion of Colorado Medicaid. This one will cover the more than 86,000 college students in Colorado that the Census Bureau estimates have incomes below the federal poverty level. It also will cover the unknown number of otherwise healthy single students above the poverty level who have incomes up to $15,414 a year. (Income figures do not include additional subsidies received for things like housing, child care, energy assistance and food.)
As the Hickenlooper Administration claims the expansion would enroll an additional 160,000 people, it seems that college students will be its primary beneficiaries.
Many Colorado colleges already require students to buy health coverage. But Medicaid enrollment is free and it covers everything from unnecessary emergency room visits and major surgery to over-the-counter drugs with $5 copays and no deductible. Students and their parents know a good deal when they see one.
Under the Hickenlooper plan, rational observers expect droves of students to drop their private coverage in favor of Medicaid. Since Medicaid enrollment is also open to anyone who can produce a driver’s license, photo ID or other proof of residence in Colorado, the expansion offers equal opportunity for the state’s taxpayers to pay for the health care of both in-state and out-of-state students.
The plan will cost taxpayers a bundle. Medicaid medical services premiums for the program’s least expensive adults are $3,000 a year per enrollee, according to the legislature’s Joint Budget Committee. Capitated payments (one flat fee for everyone) to regional organizations that provide mental health care will add another $278 for each adult without dependent children.
Groups that have managed care contracts with the state Medicaid program receive these payments for each person enrolled, whether services are used or not. This arrangement creates a financial incentive to encourage the state to enroll people in Medicaid regardless of need.
This may explain why people hear so little about the Colorado Indigent Care Program, a state program that already underwrites needed medical care for people who cannot afford it and are ineligible for Medicaid. It also may explain why the state continues to try to herd Medicaid recipients into managed care, even though it has admitted that managed care increases Medicaid expenditures. The Robert Wood Johnson Foundation also has concluded that Medicaid managed care does not save money.
In addition to paying for the new costs arising from the Medicaid caseload increase, Colorado taxpayers will have to make up for the tax revenues lost when people stop making payments to private insurers and start receiving benefits from the government.
Assuming that the federal government picks up the entire cost of medical service premiums for the first few years of the expansion, the Hickenlooper Administration estimates that state taxpayers will be on the hook for an additional $1.4 billion over the next 10 years. That assumption may understate the cost, given the state of the federal budget and the fact the Obama Administration has already proposed reducing federal funds.
Since increasing Colorado taxes is likely to trigger an exodus to other states with lower taxes, spending is a zero sum game. An additional $1.4 billion for the healthy college students means $1.4 billion less for expenditures on schools, roads, law enforcement and other core functions of state government.
This article originally appeared in Health Policy Solutions, January 24, 2013.
by Linda Gorman
The federal Patient Protection and Affordable Care Act (Obamacare) has radically restructured federal subsidy programs for medical care. For the first time in decades, Colorado can begin bringing state expenditures in line with tax revenues by using federal money to reverse the excessive growth in its Medicaid and child health insurance programs.
Shrinking Medicaid and CHP could make a lot of people better off. Obamacare makes subsidized commercial health coverage available for a large fraction of the healthy adults and children who make up the bulk of the state’s Medicaid and CHP caseloads. The catch is that people have to be ineligible for Medicaid and CHP in order to be eligible for the federally subsidized coverage.
Compared to Medicaid, commercial policies have historically reimbursed at significantly higher rates, making it easier to find a physician and to arrange for timely care. Low reimbursements generally translate into less care. A number of recent papers in medical literature report that Medicaid coverage is an independent predictor for increased mortality, extended hospital stays and higher costs. In some cases, Medicaid patients even have worse outcomes than uninsured patients.
Obamacare annual premiums for commercial coverage for people at 100 percent of the federal poverty level ($11,170 in money income in 2012) are limited to $217 for a single person. They increase by about $75 for each additional person. Federal poverty level income refers only to cash income.
It does not take into account subsidies from programs like those that provide means-tested assistance for food, housing, transportation, child care or heat. According to the 2010 Consumer Expenditure Survey, people with under $10,000 a year in pretax income spent about $1,000 on entertainment, $1,000 on food away from home, and more than $2,000 on private vehicle transportation.
Because Medicaid puts severe limits on the price that can be charged for care, Medicaid patients often have to wait. This increases the time price of care. Unpredictable waiting times are especially burdensome for hourly workers who aren’t getting paid while they wait.
Many low-income people would rather pay nominally higher prices for care than miss work, but Medicaid rules prevent this. When North Carolina Medicaid reduced the allowable one-stop supply of Medicaid prescription medications from 100 days to 34 days and raised the co-pay from $1 to $3, raising the time price led to a much greater reduction in the needed drugs obtained by chronically ill patients than increasing the price.
Even if Obamacare didn’t offer the opportunity to make many Medicaid clients better off by switching them to private insurance plans, Medicaid expansion makes little fiscal sense. Even though the federal government promises to cover the medical costs of Medicaid expansion through 2019, it does not cover the state share of additional administrative costs, which average an estimated $2.48 for each additional $100 of state Medicaid spending.
Plus, the Obama administration’s FY 2013 budget has already proposed making states pay more.
Even without expanding the program, Colorado Medicaid costs are set by an unknown amount.
Thanks to Obamacare’s individual mandate, some fraction of the one-third of the uninsured who are already Medicaid eligible but simply have not signed up because they don’t need health care will now sign up, swelling caseloads and costs. People who are eligible for Medicaid but who currently have private coverage will add to the rolls as employers respond to Obamacare by cutting hours and dropping employer coverage.
The state budget will also face increased demands for provider subsidies. Medicaid pays most providers less than cost, so increasing Medicaid caseloads can increase uncompensated care costs.
Finally, Obamacare makes deep cuts in Medicare reimbursements, a loss that will lead to calls for more taxpayer subsidies for Colorado’s government-owned hospitals.
This article originally appeared in the Pueblo Chieftan, January 6, 2013.
by Amy Oliver, Linda Gorman
Colorado state government, and local foundations and health policy elites, have become so ideologically invested in failed health reform policies that they now see nothing wrong with forcing Colorado citizens to give their medical records to a centralized repository, free from scrutiny by state auditors, open records requests and open meeting requirements.
In 2010, state lawmakers passed HB 1330, which created the All-Payer Claim Database. It was an exceedingly vague piece of legislation. It created the usual sycophantic advisory committee to give an illusion of public control, but the real power was given to an “Administrator” empowered to collect whatever medical data it wished from every “payer” in the state. The Administrator may impose unspecified fines on payers who refuse to comply. The database was to be operational only if private funding could be found. With funding already in place from private sources intent on promoting government-controlled health care, the Center for Improving Value in Health Care (CIVHC) was appointed as the Administrator for the database. CIVHC promptly converted itself from an entity subject to public oversight to a private 501(c)3 nonprofit.
CIVHC supporters claim the database will be secure, that individual identities will be protected by encrypted Social Security numbers, and that individual privacy is protected by HIPAA.
These claims are disingenuous at best. Encrypted Social Security numbers do not protect individual identities in a database that also contains information on an individual’s gender, address, race, spouse, children, dependents, insurance group, insurance contract and member number, and the doctor, place of treatment, time of treatment, diagnosis, place of care, prescription drugs, and payments for all medical treatments for everyone covered under any insurance policy or making a cash payment.
Centralized electronic medical records have been maintained by Britain’s National Health Service for almost a decade with predictable and disastrous results. In April 2010, London’s Daily Telegraph reported that private detectives were selling top-secret patient information for up to #300 a pop. This means that if you or your spouse or children have ever seen someone for psychiatric care, an abortion, a sexually transmitted disease, or substance abuse, anyone with access to the database will be able to figure out who you are and use that information against you. Alternatively, you could be wrongly diagnosed as an alcoholic or a sexual abuser, have the diagnosis entered in your record, and be threatened by a blackmailer.
Good luck proving a negative.
CIVHC supporters say the All-Payer Database is essential because they cannot “manage what they cannot measure.” Never mind that people who pay for their own health care are perfectly competent to manage it themselves or hire others to do so, or that CIVHC’s form of centralized management has failed everywhere it has been tried. Claims that the database will improve medical care are nonsense because it does not collect the detailed physiographic information required by clinical studies that do. What it will do is add substantially to medical care costs.
All existing public information suggests that CIVHC plans to use the All-Payer Database to bring private medical care under the control of unelected and unaccountable bureaucrats. Its metrics emphasize imposing price controls on insurers, and physicians, targeting people who are obese, limiting physician freedom to recommend treatments, making sure that individuals have “advance directives” in place, monitoring the amount spent on the last six months of life, and limiting Colorado health spending to a fixed percentage of the state’s gross state product.
As it is cheaper to let people die than treat them, it is but a short step from this to copying the European tradition of letting underweight babies die, forcing the elderly to accept palliative care, and denying advanced care to the disabled and seriously ill.
This article originally appeared in the Summit Daily, December 22, 2011.
What do you think will help decrease unemployment and underemployment? What role do you think the government can, or should, play in encouraging job growth?
Space aliens attack! Nobel laureate economist Paul Krugman says we need scientists to “fake an alien threat.” ”A massive buildup to counter” the threat, real or not, would end the economic slump “in eighteen months,” he said. Dr. Krugman unwittingly shows how loony Keynesian economic “stimulus” schemes are.
As an EconStories rap explains: “If every worker was staffed in the army and fleet, we’d have full employment and nothing to eat. Jobs are a means, not the ends in themselves. People work to live better, to put food on the shelves. Real growth means production of what people demand. That’s entrepreneurship not your central plan.”
Repealing parts or all of last year’s health control law [HR 3590] would encourage real growth. One-third of small business owners sited the law’s requirements as the greatest or second greatest “obstacle to hiring more employees,” reports a recent U.S. Chamber of Commerce survey. Three of four business owners “somewhat agreed” that the law “makes it harder … to hire more employees.”
For example, the law compels employers to buy insurance for full-time employees. In response, half of surveyed employers said they would “change their workforce strategy so that fewer employees work 30 hours or more a week,” reports Mercer consultants.
Is it merely coincidence that private-sector jobs growth stalled after health “reform” passed? Economist James Sherk shows that in the fifteen months before “reform,” average monthly job growth exceeded 67,000 jobs. Since then, it has plummeted to around 6,500 jobs per month. Don’t blame alien abductions.
* * *
Thanks to Grace-Marie Turner for her article: Repealing Health Care Legislation Will Create Jobs, which led me to the health care bill references above.
Related, via FIRM, The Hill reports:
The medical device industry says it could lose 10 percent of its U.S. workforce because of a tax created by healthcare reform.
The Advanced Medical Technology Association (AdvaMed) released a report Wednesday that says device-makers might ship 43,000 jobs overseas once the tax takes effect in 2013.
Read more: Device-makers say tax will cost 43,000 US jobs.