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JUNE 20, 2023
Cooper on TAP
Medicaid Decentralization Is a Disaster
The state-level administration of America's insurance of last resort
means millions are losing coverage.
During the pandemic, the federal government temporarily forbade states
from kicking people off their Medicaid rolls, and provided extra funding
to cover the expense. By late 2022, enrollment had indeed ballooned by
21 million
<[link removed]>,
or nearly 30 percent.
But that prohibition ended in April this year, and sure enough people
are now being kicked off the coverage by the hundreds of thousands, as
my colleague David Dayen recently pointed out
<[link removed]>.
The most recent estimate comes from David A. Lieb and Andrew DeMillo at
the Associated Press
<[link removed]>
this week, and they find that over one million people have lost
coverage. The reason: "Most got dropped for not filling out paperwork."
It's a lesson in the downsides of Medicaid's federalized and
means-tested structure.
States design and operate Medicaid within federal guidelines, and this
gives conservative states run by vicious ideologues like Ron DeSantis or
Sarah Huckabee Sanders wide latitude to kick people off the program
intentionally or with deliberate incompetence. Per AP, Florida alone
"has dropped several hundred thousand people, by far the most among
states." The other largest enrollment declines are seen almost entirely
in red states like Arkansas, Idaho, Oklahoma, and West Virginia.
This problem is made worse by Medicaid's complex eligibility
requirements, which include income and asset tests that vary based on
the age and status of the enrollee, as well as across states. Most
enrollees have a vague at best understanding of the rules, or when and
how to file the necessary paperwork, or are now learning about these
draconian strictures. One diabetic retiree in Pittsburgh learned that he
would have to get rid of $60,000 in his retirement savings or lose
coverage, requiring him to pay $700 per month for insulin out of pocket.
Medicaid has been largely privatized over the years: Some 72 percent
<[link removed]>
of enrollees are now in "managed care organizations" run by private
companies. That provides a theoretical incentive for those companies to
get enrollment as high as possible so they can make more money. But as
we've seen with the student loan servicers debacle
<[link removed]>,
government contractors are just as prone to Kafkaesque bureaucratic
errors as any government agency. (One of them, Maximus, contracts for
both student loan servicing and Medicaid eligibility determination in 13
states <[link removed]>.)
One easy idea to reduce eligibility mistakes would be to impose
"maintenance of effort" rules on companies or states such that if they
kick too many people off erroneously, the companies get booted off
Medicaid themselves, or the state gets financially penalized.
But a better idea would be to federalize the program entirely, and ease
up on the eligibility rules. Roll Medicaid and Medicare into one program
(thus removing control from merciless red-state governors) and loosen up
income and asset tests (especially for retirees). Make enrollment happen
automatically as much as possible, like for anyone under the age of 26
or for anyone on Social Security Disability Insurance. Best of all would
be to put every American onto the program for life, thus making it
impossible to ever lose coverage.
~ RYAN COOPER
Follow Ryan Cooper on Twitter <[link removed]>
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How to Judge the New Industrial Policy
<[link removed]>
A focus solely on near-term GDP overlooks what's being attempted. BY
DAVID DAYEN
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Democracy Under Siege
<[link removed]>
It's alive and well in Central Europe-but alas, in few other places.
BY ROBERT KUTTNER
A Return to Rentiership
<[link removed]>
A new paper shows that rent-seeking by firms with dominant market
positions has exploded since the 1980s. BY LUKE GOLDSTEIN
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