Medicaid for the Middle Class?

From NCPA.org

President Barack Obama's health care law would let several million middle class people get nearly free insurance meant for the poor, a twist government number crunchers say they discovered only after the complex bill was signed, reports the Washington Examiner.

The change would affect early retirees:

• A married couple could have an annual income of about $64,000 and still get Medicaid, said officials who make long-range cost estimates for the Health and Human Services department.
• Up to 3 million people could qualify for Medicaid in 2014 as a result of the anomaly.
• That's because, in a major change from today, most of their Social Security benefits would no longer be counted as income for determining eligibility.

Early retirees would be a new group for Medicaid. While retirees can now start collecting Social Security at age 62, they must wait another three years to get Medicare, unless they're disabled.

• The actuary's office said the 3 million early retirees who would become eligible for Medicaid are on top of an estimated 16 million to 20 million people that the law would already bring into the program, by opening it to childless adults with incomes near the poverty level.
• Federal taxpayers will cover all of the initial cost of the expansion.

Source: "A Glitch in Obamacare Could Give Middle Class Insurance Coverage Intended for the Poor," Washington Examiner, June 21, 2011.

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Rationing by Waiting

by John Goodman NCPA Healthblog

Economic textbooks stress the role of prices in allocating resources. Yet the reality is that we pay for almost all of the goods and services we buy with both time and money. The size of the time price, versus the money price, varies a lot from good to good, market to market and even by the hour of the day.

Most of us accept this reality as a normal part of life without experiencing any emotional stress or moral outrage. I’ve never heard anyone say that paying with time is more moral or just or fair than paying with cash. Certainly no one ever argues that paying with time rather than money is more efficient.

Except in health care. As loyal readers of my blog discovered long ago, health policy analysis attracts an unusual breed of thinker:

• They almost universally believe that if health care has to be rationed, it’s always better to ration by waiting instead of rationing by price — even when the service is something almost everyone could easily afford (e.g., a doctor’s visit).
• They believe that paying for care with time, rather than money is more efficient, even though the most rudimentary economic analysis shows that belief is wrong.
• And they believe that people who pay for care with time are “insured” while people who pay with money are “uninsured” — even if the same people end up getting the same care under either system.

Bob Dylan: “I ain’t saying you treated me unkind….You just kinda wasted my precious time.”

[Note to self: Does health policy analysis attract people with peculiar personality disorders? Or do they just get crazy after they become immersed in the field?]

That brings me to Massachusetts, where these ideas have been largely codified. According to the latest survey by the Massachusetts Medical Society:

• New patients must wait more than a month before they are able to see a family doctor; and the wait to see an internist averages 48 days.
• More than half of all family doctors and more than half of all internists are not accepting new patients at all.

In Massachusetts, this is called “universal coverage.”

Of special interest is what has happened to the people who are newly insured as a result of health reform in the state. As the graph below shows:

• Whereas 87% of family doctors accept Medicare patients, only 56% accept patients enrolled in Commonwealth Care (subsidized insurance sold in the “exchange”).
• Only 44% accept patients in Commonwealth Choice (unsubsidized insurance sold in the “exchange”).
• Although 85% of internists accept Medicare patients, the fraction who accept Commonwealth Care and Commonwealth Choice is 43% and 35% respectively.

In Massachusetts this is called “access to care.”

Before leaving this subject, allow me to make an observation previously made here: If you force people to ration care by waiting, you effectively double the social cost of that care. Patients will wait until the value of their time equals the value they place on the care they receive, at the margin (that’s once); and taxpayers or employers and employees must pay with money (that’s twice) for the real resources — doctors, nurses, facilities, etc. — needed to provide that care.

In Massachusetts, this is called “cost effective” care.