It seemed a simple question: how would the Republican healthcare bills’ proposed cuts to Medicaid affect us here around Athens, GA? And how would the various proposed amendments affect us?
It’s been a moving target, and the most recent Senate vote was literally to try to pass an almost unknown and unevaluated bill… but in short, in any variations to date, the bills would cost Georgia money, jobs and the health of many of its citizens. The bills proposed so far do not directly affect the care people need, or the cost of that care… they only change how much of the total of Medicaid care is paid by the federal government. Using the government’s estimates, under the original Senate plan, by 2026 Georgia would have received $3.7 billion less federal money to pay for Medicaid care. By 2030 the cumulative estimate is $10.7 billion. This is because the bills include place a lower cap on federal payments that grows less than the expected costs. So while the government projects the growth rate for total Medicaid costs will be 4.4%, under the senate rules, payments can only increase by 2.4% annually. The House plan was better in that regard, growing at medical inflation, estimated at 3.7% (but still less than 4.4%).
That’s cost for needed care, and Medicaid patients are, by definition, the poor, the elderly, low-income children, and the disabled; they can’t be expected to pay that much more out of pocket. So either Georgia would have to come up with that money itself, foregoing other benefits in education, public safety, and infrastructure, or Georgians would have to go without care. The explicit availability of waivers for coverage of pre-existing conditions, for example, provides one tempting path to resolve the gap… but, one way or another, people would lose coverage.
These people would have to live with chronic conditions and a lower quality of life—until something that hadn’t been a crisis became one. Sometimes that would be fatal (higher mortality rates from preventable heart attacks, for example), sometimes it would require an emergency room visit. Hospital emergency rooms cannot legally turn those in need away, but with the proposed changes to Medicaid, they wouldn’t be paid for the care. Increased “indigent care” means hospitals cannot maintain their staff, or update their equipment and services, and may eventually risk bankruptcy and closure. That has ripple effects economically as well as in public health.
What that means for the Athens area
We have two major hospitals in Athens, as well as many individual practices, laboratories, clinics, long-term and elder care facilities, and so on, most of which serve patients on Medicaid across much of northeast Georgia. Using 2013 numbers, Clarke and its surrounding counties (Oconee, Barrow, Jackson, Madison, and Oglethorpe) contain about 3% of the state’s Medicaid enrollees. Assuming costs follow that same proportion—which is a risky assumption, I admit—under the Senate plan, the region would lose about 3% of $3.7 billion by 2026: $112 million dollars less spending in the Athens economy. By 2030, it’s a cumulative $321 million less in Athens. That is a loss of medical employers investing in their businesses, hiring staff, offering raises; it ripples further to a lack of spending by healthcare workers at other, non-healthcare businesses. Beyond the economic costs, there would also be a human cost in unmet care for low-income patients, including children and elders. In net, the region would be sicker overall, and we would suffer losses to the local economy, compared to today’s law.
Looking specifically at the two hospitals, ARMC is Athens’ third largest employer, behind UGA and the county government; St. Mary’s is fifth. (If you break the school district out from the government generally, they’re second and sixth.) So, a big cut to Medicaid expenditure in the region is a big loss of revenue for two of our biggest employers. Assuming we see a resulting increase in unreimbursed emergency care, it likely also results in cuts to other services. For example, some rural hospitals, required to provide emergency care but underfunded overall, close obstetrics: you might have to go to Atlanta to deliver a baby, or for any of a myriad other non-emergency services we now get locally.
Under the Cruz (R-TX) amendment, substandard plans are allowed. That suggests a dangerous misunderstanding of insurance: any of us might get cancer, or be in a severe car accident, and need ruinously expensive care. Allowing a tiered system, with a cheaper plan for healthier people, hurts us two ways: the less healthy can’t afford care, and the healthy-but-unlucky can’t either, because their “plan” doesn’t cover their suddenly increased requirements. The recent Portman (R-OH) amendment does offer some assistance to those losing Medicaid through the loss of Medicaid expansion… but it’s not nearly enough to cover private insurance.
The repeal-only option, also rejected, is irresponsible because it provides no predictability for the insurance market; that can’t help but raise costs. And in two years or so, should we expect Congress to agree on a replacement, when they’ve proven unable to do so already?
And today’s vote, to debate and then attempt to pass an unknown, un-evaluated variation of bills that already? That’s irresponsible, too. Even setting policy aside, if your bill has to be passed in a cloud of secrecy and dark of night… you’re doing something wrong.
Almost nobody likes the House or Senate bills, and they haven’t improved. Keeping them hidden is worse. We do have a serious problem with healthcare… but pushing the costs around doesn’t help; we need to address the rising costs themselves, head-on.
None of the Republican do that; they only reduce the federal payments, and would eventually force Georgia to either cut benefits, or to cut other services. In Athens, that’s hundreds of millions of dollars by 2026; that reduces employment, as well as making people live sicker, unable to afford or unable to access treatment.
There is work we can do to address the actual problem of health care costs directly. Sadly, many of the most obvious approaches are politically anathema to somebody. So, rather than addressing the actual problem, Congress is merely passing the buck. Literally. And if the states don’t pay it, and patients can’t pay it… then we all go without.
But there is work we can agree on.
- Medicaid helps patients avoid high-cost care, by offering reliable medication and preventative care. Paying that “ounce of protection” makes more sense, as public policy, than leaving people sick.
- If we stop changing the rules, then insurers can plan more accurately; according to those companies, the uncertainty, more than the market itself, has lead to the premium rises and exits from market we here about in the news.
- Prescription drugs are more expensive in the U.S. than elsewhere. They’re only about 12% of total medical costs, but the U.S. costs are often about 2-3x, or more, the costs in other developed nations. So that’s about 6% of our annual medical costs that could probably be saved. The companies do need to recover their R&D costs… but the U.S.A. doesn’t have to pay so much of it.
- We can look at unhelpful state regulations. For example, obstetrics care is expensive, and many pregnancies could be served at home by a midwife… but in Georgia, that is only legal in a hospital setting.
- Medical insurers, including Medicaid, get negotiated pricing, often half or less of “retail” pricing. So the uninsured both pay out-of-pocket, and pay higher prices. Could we cap retail pricing, say to two or three times Medicaid’s (admittedly low) rates? Doctors should be paid fairly for their time, expertise, facility costs, and risks (including malpractice suits)… but there’s clearly some room between today’s retail pricing, and the practice taking a loss.
A bill that used some of those ideas, or others, to reduce medical costs… that would offer some improvement. It is, sadly, not to be found in Congress today. Or at least there’s no reason to expect it, in the mystery box currently proposed.