OP-ED COLUMNIST
Medicaid on the Ballot
By PAUL KRUGMAN
October 28, 2012
There’s a lot we don’t
know about what Mitt Romney would do if he won. He refuses to say which tax
loopholes he would close to make up for $5 trillion in tax cuts; his economic
“plan” is an empty shell.
But one thing is clear: If he wins, Medicaid —
which now covers more than 50 million Americans — will face savage cuts.
Estimates suggest that a Romney victory would deny health insurance to about 45
million people, with two-thirds of that
difference due to the assault on Medicaid.
So this election is, to an important degree,
really about Medicaid. And this, in turn, means that you need to know something
more about the program.
Medicaid
has been more successful at controlling costs than any other major part of the
nation’s health care system. And contrary to what you may have heard, the
great majority of Medicaid beneficiaries are in working families.
There’s a widespread perception, gleefully fed by right-wing
politicians and propagandists, that Medicaid has “runaway” costs. But the truth
is just the opposite. While costs grew rapidly in 2009-10, as a depressed
economy made more Americans eligible for the program, the longer-term reality
is that Medicaid is significantly better at controlling costs than the rest of
our health care system.
How much better? According to the best available
estimates, the average cost of health care for adult Medicaid recipients is
about 20 percent less than it would be if they had private insurance. The gap
for children is even larger.
And the gap has been widening over time: Medicaid
costs have consistently risen a bit less rapidly than Medicare costs, and much
less rapidly than premiums on private insurance.
How does Medicaid achieve these lower costs?
Partly by having much lower administrative costs than private insurers. It’s
always worth remembering that when it comes to health care, it’s the private
sector, not government programs, that suffers from stifling, costly
bureaucracy.
Also, Medicaid is much more effective at
bargaining with the medical-industrial complex.
Consider, for example, drug prices. Last year a
government study compared the prices that Medicaid paid for brand-name drugs
with those paid by Medicare Part D — also a government program, but one run
through private insurance companies. The conclusion: Medicaid pays
almost a third less on average. That’s a lot of money.
Is Medicaid perfect? Of course not. Most notably,
the hard bargain it drives with health providers means that quite a few doctors
are reluctant to see Medicaid patients. Yet given the problems facing American
health care — sharply rising costs and declining private-sector coverage —
Medicaid has to be regarded as a highly successful program. It provides good if
not great coverage to tens of millions of people who would otherwise be left
out in the cold, and as I said, it does much right to keep costs down.
By any reasonable standard, this is a program
that should be expanded, not slashed — and a major expansion of Medicaid is
part of the Affordable Care Act.
Why, then, are Republicans so determined to do
the reverse, and kill this success story? You know the answers. Partly it’s
their general hostility to anything that helps the 47 percent — those Americans
whom they consider moochers who need to be taught self-reliance. Partly it’s
the fact that Medicaid’s success is a reproach to their antigovernment
ideology.
The question — and it’s a question the American
people will answer very soon — is whether they’ll get to indulge these
prejudices at the expense of tens of millions of their fellow citizens.
(Paul Krugman won the Nobel Prize for Economics in 2008.)
(Paul Krugman won the Nobel Prize for Economics in 2008.)
