Medicaid and the Politics of Grievance
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Medicaid Mismanagement
I grew up in Chicago more than 50 years ago and bribery was just a way of life there. But what I read about the State of Georgia this morning was truly shocking. First some background material.
Background
Medicaid is a joint federal/state program to provide health insurance for very low income people. It has a component called the Childhood Health Insurance Program, CHIP. People typically have to reapply for Medicaid yearly.
The Affordable Care Act (2010) allowed stats to expand Medicaid to include people whose income was up to 1.38 x the Federal Poverty Limit (FPL). For a family of 4 in 2024 the FPL is $31,200/year and the expansion limit of 1.38 would bring it to $43,056/year. For a single person at FPL that’s $15,060/year or $7.53/hr. At 1.38 x FPL $20,783/year or $10.39/hr.
If a state chose to use the ACA expansion they would benefit in several ways. First more people would have health insurance. Second, the increased demand for health care drives an increase in employment and so an increase in taxes, and third, the expansion included new categories of illnesses for which the federal government would pick up 90% of the cost. An analysis of costs by the Commonwealth Fund found that the fiscal effect on states budgets was pretty much nil. That is, the extra Medicaid categories and federal contributions combined with additional taxes and revenue allowed more people to have health insurance without any negative effect on state’s budgets.
Georgia’s Medicaid
Now the state of Georgia has chosen a different way to implement Medicaid expansion mid 2023. They demanded a work requirement. This was authorized by the Trump Administration. Instead of adding hundreds of thousands of low income Georgians to Medicaid, as of last night, 3500 were added. Here is a Washington Post investigation of the Georgia experiment. Their costs have exceeded $20 million in the last few months.
Work requirements can come with big administrative price tags, according to a Trump era 2019 report from the Government Accountability Office, which recommended that the Centers for Medicare & Medicaid Services consider administrative costs in waiver applications.
States have to set up technology to check compliance, plus hire staff to keep all the paperwork straight. Under Georgia’s plan, people earning up to the federal poverty level — $15,060 for an individual adult — must document that they’re working, in school, doing community service or performing other qualifying activities. Taking care of a child or parent doesn’t count.
Documents obtained by the Kaiser Family Foundation show that administrative costs along with consulting fees have absorbed more than 90 percent of the Georgia program’s spending. As of Dec. 31, about $2 million went to Medicaid managed-care companies; $24 million was spent on administration and consultants. The administrative costs are expected to balloon to $122 million over four years.
If I were in Chicago, I’d want to know who the consultants were and who was setting up the technical systems and what their relationship is to the lawmakers that put this scam into place.
Last month some in the Georgia legislature tried to implement the full expansion of Medicaid but, of course, some Georgia Republicans blocked the bill. They don’t seem to grasp that when the population is healthy so is the economy.
Critics of the work for healthcare programs argue that the red tape keeps people from getting health care. And while work requirements don’t significantly boost employment, simply providing health coverage can, according to a 2023 KFF brief.
But don’t expect the idea to disappear. The first Trump administration approved Medicaid work-requirement programs in 13 states. Mississippi, Idaho, Kansas and Louisiana are all moving in the same direction.
I am reading a book called Democracy Awakening, by Boston College history professor Heather Cox Richardson, and have discovered that the Georgia argument against the poor is actually fairly old. It was used just after the Civil War by Southern States who did not want government services to be provided to the poor because the cost of the services were paid for by white people with money. In fact, that logic was used to restrict voting rights of Black citizens. This argument of grievance of one group of people against another is page 3 of the fascist/authoritarian playbook. P.S. Here is professor Richardson’s daily sub stack newsletter.
Let’s remind our legislatures that Universal Single Payer Healthcare DOES fix this mess.
ACTION
Use Resistbot on your cell phone by texting SIGN PVIBAQ to 50409 to send the email below. Our contact your members of Congress and Senators by phone or email. Contact info is in the Resources section below.
“I am your constituent and I want you to know that Georgia has implemented and a number of other states, including Mississippi, Idaho, Kansas and Louisiana are planning to implement work requirements for Medicaid recipients. According to a 2019 GAO report it is an expensive process and we are seeing that it and doesn’t expand Medicaid much. Here is a link to that report. https://www.gao.gov/products/gao-20-149.
I want you to know that demanding work requirements for healthcare is an old argument that fosters grievance and does not work. It does not add to the work force, in fact it detracts. What does add to the workforce is making sure everyone has healthcare. Here is a link to that research for you from the Kaiser family Foundation. https://www.kff.org/medicaid/issue-brief/understanding-the-intersection-of-medicaid-work-a-look-at-what-the-data-say/
It is important that you know that when the population is healthy so is the economy.
Single Payer Universal Healthcare costs less, by more that $400 billion every year, according to the 2020 GAO report, will put more people to work, not keep people from changing jobs because they fear losing healthcare. This is what we your constituents need and want and you can do it by actively working to pass HR 3421, the improved Medicare for All Act.”
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Congressional Budget Office 200-page analysis (Dec 2020) found that a public system (read: single-payer universal healthcare) could reduce our "national health spend" by up to $650 billion a year or more. Most of these gobstopping net-cost savings came from reduced admin costs.
I don't recall whether the admin costs identified in the CBO's analysis include — along with public costs (i.e. government costs) — provider costs (e.g. medical practices, hospitals, etc) and generic business costs (such as HR departments in companies and small businesses that offer employee healthcare and therefore must manage this crazy burden).
I gotta go back and look up this stuff.
Off the cuff, here's one factoid: on average, medical practices must employ two billing clerks for every three physicians. Think about that.
Hi Alan,
This is a very informative post. Thank you!
Although I agree with you that universal healthcare makes the most sense, too many of our elected officials and candidates are facing headwinds of public opinion. They may, however, be able to make greater headway by emphasizing the corrupt nonsense of blocking Medicaid expansion while driving money that could pay for healthcare to inefficient gatekeepers.
In addition to Heather Cox Richardson’s telling us that blocking a safety net is an old argument that began with racism and privilege, there is a traditionally conservative belief that only those who have put in the work deserve fair treatment. That research is Moral Foundations Theory. Here’s a link to that research:
https://moralfoundations.org/
A moral foundation is a strong emotional tendency to favor what one considers a moral outcome. It’s like an instinct, a strong and adaptive feeling that is stronger than strictly rational decision-making.
This link takes you to a chapter of a book by social psychologist Jonathan Haidt, where if you scroll down to page 7, you’ll find a detailed discussion of each moral foundation, including fairness.
There is also research, possibly by retired Prof. Bob Altemeyer, on people who support authoritarians. The idea is that people who grew up in conservative communities have a belief in self-sufficiency that affects their interpretation of what is fair. Here’s a link to Altemeyer’s work:
https://theauthoritarians.org/
Finally, perhaps you can clarify in a brief summary how taxes are raised to benefit the local economy by providing more healthcare coverage. If we’re going others who have not been tuned in, we need to counter the reactionary mantra that liberals love to tax and spend that has been promoted since the Reagan Administration. When everyone pays their fair share of taxes, including rich people and corporations, we can fund services and invest in public works and infrastructure that benefits our economy and improves living conditions.
Along this line, recently, Robert Hubbell recently pushed back against another one of these reactionary talking points that the “deep state” is really comprised of dedicated citizens who are the civil servants who provide services to ensure public safety and respond to emergencies, including the activation of the Army Corps of Engineers to restore the Port of Baltimore after its catastrophic bridge collapse.