Last year, I admitted a middle-aged patient I’ll call Joe to Columbia University Medical Center. Joe, who was brought in by a neighbor, was profoundly confused and had missed dialysis. We thought the build-up of toxins were clouding Joe’s mind. But dialysis didn’t improve things, and we soon realized dementia was the culprit—and that it was putting our patient in serious danger.
Joe had missed dialysis not once but multiple times and may have lost a kidney transplant after not answering the phone call offering it. We were nervous to send Joe home alone. What would happen after another missed dialysis appointment? What if Joe’s apartment caught fire?
We started to think about nursing homes. Joe had both private insurance and Medicare, yet neither would cover long-term care. Our social workers considered an alternative: Medicaid, the government program that insures more than 75 million low-income Americans.
We did not get very far, because a relative soon offered to live with Joe, a solution we hoped would suffice. Unfortunately, paramedics found Joe unresponsive several months later after breaking down the door. Joe had missed several dialysis sessions. Despite aggressive measures in the intensive care unit, Joe’s brain began to swell. Our patient died. When I look back, I wonder: Could Medicaid have saved Joe’s life?
Joe, employed and insured, was not the typical Medicaid enrollee. But the program is large, and it serves a wide variety of people in need—for now. The health care bills proposed by Republicans could change that. Following the House’s passage of the American Health Care Act last month, Senate Republicans debuted their version of the legislation on Thursday. The Senate version ends the Affordable Care Act’s Medicaid expansion on a slower timetable than the House bill, but beginning in 2025 it institutes a more draconian formula to restrain growth in Medicaid funding. While the details may be different, one basic fact is the same: Either of these bills would decimate Medicaid.
The timing is odd. In the last few years, more evidence than ever before has shown that Medicaid improves access to care, increases diagnoses of chronic diseases, and reduces mortality.
Spend a few days with my patients in Washington Heights and nothing could be more obvious. Most of our patients at Columbia, where I am a resident physician, depend on Medicaid. It pays for their stays. It covers the antibiotics for their pneumonia and beta blockers for their heart failure. And when they need nursing homes, Medicaid funds it. Indeed, Medicaid is the single most important source of funding for long-term care in our country.
One of my colleagues, Dr. Daniel Manson, told me about a young man, Steve, whom he saw in his clinic. Steve’s employer did not provide health insurance. If the Senate’s version of the AHCA becomes law, even more people will be in his situation, because the bill eliminates the requirement for companies with 50 or more employees to provide health insurance to full-time workers. Fortunately, Steve qualified for Medicaid. When he was diagnosed with a brain tumor, Medicaid paid for the drugs that keep his tumor at bay. “Without care,” my colleague wrote to me, “his tumor would have progressed, inevitably causing devastating neurological complications and blindness.”
Stories like Steve’s became more common after the Affordable Care Act passed. The expansion of Medicaid was the law’s most significant component, insuring more people than the individual mandate and state insurance exchanges combined. The ACA made two major changes to Medicaid nationally. It loosened the income requirements for eligibility and allowed childless adults to qualify. The ACA also subsidized this expansion, covering 100 percent of the costs of newly eligible enrollees for the first three years, a figure that will fall to 90 percent in 2020 if the law remains in place.
Some states considered that 10 percent share too burdensome. In 2012, the Supreme Court agreed, allowing states to opt out. Eventually 18 states did, while 32 states and the District of Columbia signed up for Medicaid expansion. This created a natural experiment to test whether Medicaid expansion really worked.
In states that expanded Medicaid, insurance coverage by the end of 2014 had increased at almost twice the rate that it did in nonexpansion states. New York expanded Medicaid years before the ACA, so our enrollment rates were already high at Columbia. Nevertheless, we have seen gains. In 2012, 53.5 percent of people who came to our emergency department had Medicaid. That number increased to 56.7 percent in 2016. During that time, the proportion of uninsured patients in the emergency department dropped by a quarter. As of December, New York as a whole saw a 13 percent increase in Medicaid enrollees from pre-ACA levels. In Kentucky, which took the expansion, Medicaid enrollment has more than doubled. Across the country, Medicaid enrollment has increased by a whopping 11.2 million people.
It is one thing to insure people and quite another to improve their health. New York, Maine, and Arizona all enacted their own Medicaid expansions in the early 2000s, well before the ACA. After their expansion, mortality decreased 6.1 percent more in these three states than in three comparable states that had not expanded Medicaid. In 2008, Oregon used a lottery to select individuals for the Medicaid expansion. This was basically a randomized control trial, our best standard for testing medical interventions. After two years, those randomly selected to join Medicaid had lower levels of depression and catastrophic medical expenditure than did those who were not selected.
None of these changes came close to the magnitude of the ACA’s Medicaid expansion. That expansion has been associated with more cancer screening, surgical care, and even listings for heart transplants. In expansion states, there was a 13 percent increase in the diagnosis of diabetes in 2014, compared with only a 0.4 percent increase in nonexpansion states.
Medicaid can also save hospitals money by reducing the number of uninsured patients. In fact, hospitals in expansion states have reported a decrease in uncompensated care.
AHCA and the Senate’s Better Care Reconciliation Act are bad news for Medicaid. According to the Congressional Budget Office, AHCA as passed by the House would cut $834 billion of Medicaid funding over 10 years. That translates to 14 million fewer people with Medicaid and 23 million fewer people insured overall. When the CBO evaluates the Senate bill, the numbers are unlikely to be much better. They may be worse.
The bills undermine Medicaid in several ways. First, they will limit the federal expansion subsidy to those enrolled in Medicaid before 2020. Second, the AHCA will change the rules by which the federal government supports the program. Instead of federal matching funds that reflect a state’s actual costs, a state will get most of its payments as a fixed amount per enrollee. This amount will grow with inflation, even though health care costs usually grow faster. The Senate bill is even less generous than the House’s because of the way it calculates inflation. Beginning in 2025, it will use a version of the consumer price index that typically provides a lower estimate of inflation. This means that under the Senate bill, Medicaid funding will grow more slowly than it would have otherwise. Worse, states will have the option to opt for block grants, lump-sum payments that the states will manage at will. Block grants provide less oversight and, in most cases, less money. Third, the bills give states the option to exclude unemployed people who are not disabled, elderly, or pregnant from receiving Medicaid benefits. There are a few provisions to roll back specific cuts in Medicaid funding, but the big picture is clear: much less funding from the federal government and many fewer patients covered.
In lieu of a robust Medicaid program, Republicans are offering patients a mix of tax credits to purchase plans on the private market and bigger incentives to use health savings accounts. This is not enough. The tax credits will not cover the cost of comprehensive health insurance plans in many markets. Here in New York, the Kaiser Family Foundation estimated the average cost of individual health insurance to be nearly $5,000 as of 2013. In the House bill, the tax credits would max out at $4,000 while the Senate bill provides credits based on age, income, and the local cost of health insurance. Either version would significantly increase how much most low-income Americans are expected to pay for health coverage, even for plans that are substantially worse than Medicaid.* Health savings accounts might cover a prescription here and there, but they will not pay for expensive hospital stays, especially for low-income patients who aren’t able to save much. The Cleveland Clinic’s public price list puts things into perspective. An intensive care unit bed there costs $5,000 per day, which does not include lab tests, CT scans, and other studies. Most hospitalized patients get two lab tests every day, the complete blood test and the basic metabolic panel; these tests alone cost more than $200 per day at the clinic. Although current enrollees will be grandfathered in, the AHCA and the BCRA remove future federal Medicaid subsidies for people with an income greater than 133 percent of the federal poverty level—for a family of four, that is only $32,319 per year. For many Americans who depend on Medicaid, a week in the ICU costs more than a year’s salary.
If Republicans want to create a health care system that works, they could propose changes to improve Medicaid. Medicaid is important, but it isn’t perfect. For example, many hospitals treat Medicaid patients worse than their other patients. It is a miracle Medicaid—a program without a powerful constituency that serves people who face every disadvantage—works at all. It’s the best option for millions of people, but it could be better.
*Correction, June 26, 2017: This article originally said tax credits for health coverage would max out at $4,000 under the Republican plan. They would only do so under the House bill while the Senate proposal would provide credits based on age, income, and the local cost of health insurance. (Return.)