Menckens Ghost

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Facts about Medicaid that will blow your socks off

Dear Thinker:

Better have an extra pair of socks ready, for the following two articles
about Medicaid will blow your socks off.

The first is an excerpt from a commentary by Nick Ebertstadt.  The
excerpt explains how Medicaid fuels the horrible opioid epidemic.

The second is an op-ed from today's Wall Street Journal.  It explains
that even though Medicaid provides $6,000 in annual government benefits
for the poor at no cost in premiums and negligible co-pays,
approximately five million enrollees wouldn't have enrolled if it had
not been for the ObamaCare penalty for not enrolling.  In other
words, they would've passed up free medical care and been counted among
the so-called uninsured.

Mencken's Ghost

*Excerpt from Commentary, "Our Miserable 21^st Century," by Nick
Ebertstadt --- Feb 2017*

The opioid epidemic of pain pills and heroin that has been ravaging and
shortening lives from coast to coast is a new plague for our new
century. The terrifying novelty of this particular drug epidemic, of
course, is that it has gone (so to speak) "mainstream" this time,
effecting breakout from disadvantaged minority communities to Main
Street White America. By 2013, according to a 2015 report
<> by the Drug
Enforcement Administration, more Americans died from drug overdoses
(largely but not wholly opioid abuse) than from either traffic
fatalities or guns. The dimensions of the opioid epidemic in the real
America are still not fully appreciated within the bubble, where drug
use tends to be more carefully limited and recreational. In /Dreamland/,
his harrowing and magisterial account of modern America's opioid
explosion, the journalist Sam Quinones
<> notes in passing that "in
one three-month period" just a few years ago, according to the Ohio
Department of Health, "fully 11 percent of all Ohioans were prescribed
opiates." And of course many Americans self-medicate with licit or
illicit painkillers without doctors' orders.

In the fall of 2016, Alan Krueger, former chairman of the President's
Council of Economic Advisers, released a study
further refined the picture of the real existing opioid epidemic in
America: According to his work, nearly half of all prime working-age
male labor-force dropouts—an army now totaling roughly 7 million
men—currently take pain medication on a daily basis.

We already knew from other sources (such as BLS "time use" surveys) that
the overwhelming majority of the prime-age men in this un-working army
generally don't "do civil society" (charitable work, religious
activities, volunteering), or for that matter much in the way of child
care or help for others in the home either, despite the abundance of
time on their hands. Their routine, instead, typically centers on
watching—watching TV, DVDs, Internet, hand-held devices, etc.—and indeed
watching for an average of 2,000 hours a year, as if it were a full-time
job. But Krueger's study adds a poignant and immensely sad detail to
this portrait of daily life in 21st-century America: In our mind's eye
we can now picture many millions of un-working men in the prime of life,
out of work and not looking for jobs, sitting in front of screens—stoned.

But how did so many millions of un-working men, whose incomes are
limited, manage en masse to afford a constant supply of pain medication?
Oxycontin is not cheap. As /Dreamland// /carefully explains, one main
mechanism today has been the welfare state: more specifically, Medicaid,
Uncle Sam's means-tested health-benefits program. Here is how it works
(we are with Quinones in Portsmouth, Ohio):

[The Medicaid card] pays for medicine—whatever pills a doctor deems that
the insured patient needs. Among those who receive Medicaid cards are
people on state welfare or on a federal disability program known as SSI.
. . . If you could get a prescription from a willing doctor—and
Portsmouth had plenty of them—Medicaid health-insurance cards paid for
that prescription every month. For a three-dollar Medicaid co-pay,
therefore, addicts got pills priced at thousands of dollars, with the
difference paid for by U.S. and state taxpayers. A user could turn
around and sell those pills, obtained for that three-dollar co-pay, for
as much as ten thousand dollars on the street.

In 21st-century America, "dependence on government" has thus come to
take on an entirely new meaning.

You may now wish to ask: What share of prime-working-age men these days
are enrolled in Medicaid? According to the Census Bureau's SIPP survey
(Survey of Income and Program Participation), as of 2013, over one-fifth
(21 percent) of /all/ civilian men between 25 and 55 years of age were
Medicaid beneficiaries. For prime-age people not in the labor force, the
share was over half (53 percent). And for un-working Anglos
(non-Hispanic white men not in the labor force) of prime working age,
the share enrolled in Medicaid was 48 percent.

By the way: Of the entire un-working prime-age male Anglo population in
2013, nearly three-fifths (57 percent) were reportedly collecting
disability benefits from one or more government disability program in
2013. Disability checks and means-tested benefits cannot support a
lavish lifestyle. But they can offer a permanent alternative to paid
employment, and for growing numbers of American men, they do. The rise
of these programs has coincided with the death of work for larger and
larger numbers of American men not yet of retirement age. We cannot say
that these programs /caused/ the death of work for millions upon
millions of younger men: What is incontrovertible, however, is that they
have /financed/ it—just as Medicaid inadvertently helped finance
America's immense and increasing appetite for opioids in our new century.

* * *

  Medicaid Is Free. So Why Does It Require a Mandate?

    The CBO estimates that five million fewer people would sign up
    without the ObamaCare tax penalty.

The Wall Street Journal, March 14, 2017 6:19 p.m. ET

The Congressional Budget Office is out with its analysis of the House
Republicans' ObamaCare replacement, the American Health Care Act (AHCA).
The CBO's report includes an implicit but powerful indictment of
Medicaid, America's second-largest health care entitlement.

Medicaid has been around since 1965; it was a core part of LBJ's Great
Society entitlement expansion. The program's idiosyncratic design
requires states to chip in around 40% of the program's funding, while
only getting to control about 5% of how the program is run. The federal
Medicaid law—Title XIX of the Social Security Act—mandates a laundry
list of benefits that states must provide through Medicaid, and bars
states from charging premiums. Copays and deductibles cannot exceed a
token amount.

Medicaid is the largest or second-largest line item in nearly every
state budget. But for all practical purposes, the main tool states have
to control costs is to pay doctors and hospitals less than private
insurers pay for the same care. As a result, fewer doctors accept
Medicaid patients, making it very hard for Medicaid enrollees to get
access to care when they need it. Poor access, in turn, means that
Medicaid enrollees—remarkably—have no better health outcomes than those
with no insurance at all.

That brings us back to the AHCA. According to the CBO, able-bodied
adults on Medicaid receive about $6,000 a year in government
health-insurance benefits. They pay no premiums and minimal copays.
You'd think that eligible individuals would need no prodding to sign up
for such a benefit.

And yet, according to its analysis of the GOP ObamaCare replacement, the
CBO believes that there are five million Americans who wouldn't sign up
for Medicaid if it weren't for ObamaCare's individual mandate. You read
that right: Five million people need the threat of a $695 fine to sign
up for a free program that offers them $6,000 worth of subsidized health
insurance. That's more than 1 in 5 of the 24 million people the CBO
(dubiously) claims would end up uninsured if the AHCA supplanted ObamaCare.

On its face, there's reason to doubt the CBO's view. The mandate is
enforced through the income-tax system, and enforcement of the mandate
has been spotty for those in low tax brackets. Many of those eligible
for Medicaid don't work or file returns. Under rules established by the
Obama administration, those who do can leave the "I have insurance" box
blank and face no penalty.

Still, it's remarkable that the CBO believes people need to be fined
into signing up for Medicaid. That tells us something about the CBO's
assessment of Medicaid's value to those individuals—and it buttresses
the GOP's case that Medicaid needs substantial reform.

Not coincidentally, the AHCA represents the most significant Medicaid
reform since 1965, and thereby the most significant entitlement reform
in American history. The 1996 welfare reform law is hailed by many
conservatives as the most important domestic policy achievement of the
past 25 years. Fiscally speaking, the AHCA is 10 times as significant.

The AHCA would put Medicaid on a budget, increasing Medicaid spending
per beneficiary at the same rate as the medical component of the
Consumer Price Index. This isn't a far-right concept; President Clinton
first proposed reforming Medicaid this way in 1995, as an alternative to
the GOP idea of block grants. The 1996 law ended up including neither

Combined with administrative reforms that may come from the Department
of Health and Human Services, the bill would give states more
flexibility to manage Medicaid's costs in ways that could increase
access to doctors and other providers, while reducing Medicaid spending
by hundreds of billions in its first decade and trillions thereafter.

Ultimately, Medicaid for able-bodied low-income adults should be merged
into the system of tax credits that the AHCA proposes for those above
the poverty line. In that way, all Americans, rich and poor, would have
the ability to choose the health coverage and care that reflects their
needs, and build nest eggs in health savings accounts that could be
passed on to their heirs.

The AHCA has its imperfections. The bill could do more to assist those
just above the poverty line, so that they have a smooth transition from
Medicaid into the individual health insurance market. But all in all,
truly affordable health coverage is coverage that Americans want to buy
of their own free will. The American Health Care Act promises to make
historic progress toward that goal.

/Mr. Roy, president of the Foundation for Research on Equal Opportunity,
is a former policy adviser to Mitt Romney, Rick Perry and Marco Rubio./

Appeared in the Mar. 15, 2017, print edition.

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