Tuesday, April 26, 2011

Guess what state has the worst income inequality?

See you guys tonight!


Roxy said...


TJE said...

And spends way more on Medicaid per capita than other states


Patrick_L said...

because all health care costs more in New York- a factor which effects Mediciad, Medicare, AND private health insurance companies.

TJE said...

Mr. L, more homework needed on this one:


Ayush Soni said...

Well if they count towns like these as the poorest in the country, then I'm not surprised New York features such a large gap.


Patrick_L said...

Once again, a conservative policy expert willing to take on the touch challenges of a policy area by talking about… waste, fraud, and abuse. Once again, a link which doesn’t refute my point or provide an alternative explanation of why New York’s Medicaid program costs more. All the author talks about is fraud (a tiny element and unlikely to vary significantly by state) and the federal-state matching funds formula. He implicitly argues that this formula is a problem, even though HIS evidence points against that since New York- with its unusually high costs- actually has a below-average matching funds rate, which means it has less incentive than most states to expand its program. Once again, logic doesn’t appear to be someone’s strong point.

Perhaps the most viable explanation or suggestion the Manhattan author proposed was improving the dysfunctional private health-insurance market and making coverage affordable- something Republicans all over the country are falling all over themselves to do. Oh wait… all I hear is the sound of crickets chirping. For instance, the Republican alternative to PPACA would have only insured an additional 3 million people- less than 10% of the impact of PPACA. Then there’s Ryan’s Medicare voucher proposal, which bends the cost curve… up. I’m sure one day conservatives will develop solutions to health care- probably once the market deteriorates to the point where rich people finally start being affected.

Once again, let’s go through the facts. First, the federal funds matching would encourage states to extend health insurance coverage to more and more residents. (shocking! And a completely objectionable goal. It’s not like states don’t take an axe to everything during a recession). And what depraved results does the formula achieve? In 2011 most states only provided coverage for children under age one up to 185% of the FPL, up to 133% of the FPL for children ages 1 to 5, and up to 100% of the FPL for children over 5 (the last two being the minimum federal requirements- only for infants have most states found the federal minimum level wanting). Only 8 states provided health insurance coverage for infants up to one-year old in a family making over 200% of the FPL, while only 3 states provided coverage for children ages 1 to 19 in families making over 200% of the FPL. The program also covers those elderly and disabled dependent on SSI (which means they have very little assets or income- in most states for those under 85% of the FPL). Only 4 states provided any coverage for this group with incomes above 100% of the FPL- Alaska (109% for individuals, 120% for couples), Vermont (101%, 110% in Chittendon), Nevada (114% for the blind living independently), and Massachusetts (133% for those disabled under-65). For low-income parents, most states restrict eligibility to those below 65% of the FPL- only 3 states and D.C. allow parents making over 200% of the FPL to qualify for the program. For childless adults, only a handful of states have any Medicaid or Medicaid-like program. New York is one- they allow childless adults with incomes within the FPL to qualify for the program. Most states also provide health insurance coverage for pregnant woman under 185% of the FPL- though a handful of states and D.C. provide coverage to pregnant women over 200% of the FPL.

Patrick_L said...

Clearly Medicaid is an offensively generous program. In the U.S., 17% of the country goes without health insurance- clearly Medicaid is far too generous. I can’t say I’m surprised to hear some people making this argument, especially after seeing this poll: http://www.scribd.com/doc/53582911/CBS-News-Poll-Budget-042111 It’s interesting that the on average 20% of all people are less supportive of the government providing health coverage for the poor versus the elderly, but for Democrats the ratio is 15%, for Independents it’s 18%, for Republicans it’s 30%, and for the Tea Party it’s 29%. It’s clear that conservatives don’t just dislike government in general- they in particular hate it for the poor and low-income people. But 47% of Tea Partiers and 55% of Republicans still support government providing health coverage for the elderly.

Interesting sidebar: New York differs significantly from the nation in people’s health insurance status in two ways- % of people in Medicaid and % of people without health insurance. Across the country, 17% of all people go without health insurance while 16% of the country on average is in a Medicaid program. In New York, only 14% are uninsured, while 21% are in Medicaid. Silly New York- thinking the clear fact that many people lack health insurance because they can’t afford it is a problem.

Next, as I said (and a point which Professor Eismeier quickly dismissed because apparently he’s done his homework by reading the latest insightful Manhattan Institute opinion piece featured in City Journal)- health care does cost more in New York, which does effect private health insurance. New York in 2009 had the 11th highest average private group health insurance premium for employer-sponsored coverage in the country, and it had increased by 46% since 2003. New York versus the entire country has higher percentages of children, adults, and elderly in poverty. New York has lower rates of uninsured for children and nonelderly adults under 138% of the FPL, but actually does worse for nonelderly adults making upwards of 138% of the FPL (a good sign that the program’s costs aren’t due to excessively covering more modest income adults). Medicaid’s largest expenses are for long-term care for the elderly and disabled (population pools with eligibility levels that change minimally across states)- but New York actually does a better job in providing this care through less expensive home/personal care versus more expensive and less popular nursing home care. This is a good thing, because New York in particular has high costs for elderly care like nursing homes (average: $118,000 a year) or in the benefits provided by Medicare (don’t forget about dual-eligibles).

Sources: Kaiser Family Foundation, Commonwealth Foundation.

In conclusion, all health care DOES cost more in New York- not just in Medicaid. None of the Manhattan-Institute provided explanations are presented in a compelling way (and most clearly are little changed in New York versus other states). And for the most prominent explanation provided- the federal matching funds formula argument- New York clearly cuts against and disproves, since it's such an unusual cost-outlier but actually has a below-average matching funds ratio so it has less incentive that most states to expand its program.

TJE said...

Patrick, very little in your long post about medicaid in ny. If you are interested in learning more about the subject, you might try this site:


Patrick_L said...

And you Professor Eismeier have failed to acknowledge that you were wrong when you said I needed to do more homework, after I made the point that all health care costs more in New York, which in turn affects private insurance as well. As I’ve amply demonstrated, health care does cost more in New York for all insurers- public or private. Also, as I’ve demonstrated- and all of the links you’ve posted implicitly admitted- New York’s Medicaid problems are its unusually high per-beneficiary costs, not its eligibility requirements. The primary conservative explanation for high Medicaid costs, as amply demonstrated in your Manhattan Institute selection, is the federal funds matching formula- an argument which clearly has minimal explanatory power because New York is such a cost outlier but actually has a below-average matching funds rate. As the documents of your oh so helpful second link make clear, if you actually read them, the majority of New York’s higher costs compared to the national average are explained by the higher overall costs in New York that impact all insurers (private and public). This makes clear, as is true across the country, that the most promising way to achieve cost savings is to actually reform the health care sector- not just piddle around with the finances of the public insurance programs. In addition, that figure ignores that the national average for American health care is over 50% more expensive than other Western nations. Take that into account, and you’ll find that easily two-thirds of New York Medicaid’s potential cost savings would come from the underlying health system- not anything to do with the actual program itself.

Nearly all of the remaining difference in New York’s Medicaid program is attributed to higher spending on the elderly, blind, and disabled (an area, btw, which New York merely complies with the federal minimum standard in terms of eligibility requirements by FPL). What could New York do in those areas? One area is to stop Medicaid from covering people of modest incomes who lack health insurance, but suffer an accident or short illness that results in significant medical bills that enables them to qualify for New York’s Medicaid. Or you could actually reform the health care sector so these people could afford health insurance and not be devastated by very-expensive, short-term medical bills. Your choice.

Moving on, another area that New York could do a better job is limiting asset transfers and spousal abandonment which allows people who could pay for their own medical care to qualify for Medicaid assistance with their long-term care. Here’s the first New York problem that logically would be addressed by modifying the program. New York should also race to the bottom and pick a low-hanging fruit- reduce the number of hours of personal assistance a long-term Medicaid beneficiary can receive each week by putting New York in-line with the national average. Another area of potential cost-saving is that New York provides significant funding through Medicaid for hospitals to train physicians. Let’s toss that- unless we think the political clout wealthy hospitals makes that politically unlikely?

Patrick_L said...
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Patrick_L said...

Next, New York hospitals are less efficient than other hospitals (higher staffing, excessive procedures, failure to follow evidence-based medical protocols, etc.)- partly because New York’s Medicaid program hasn’t adequately flexed its market power (as a very large insurer) to bring costs down by paying providers less. In addition, New York hospitals and physicians encourage unusually high utilization of medical services like specialist referrals, diagnostic tests, and hospital stays for care. Both of these problems (easily grouped as excessive provider clout and supplier induced demand) also plague New York private insurers- Medicaid should become a cost-leader at stamping out these practices. However, you’ll note that this is the specific type of thing conservatives call “rationing” care… when it’s applied to people in Medicare (and if the market responds to Medicare, people with employer-provided health insurance as well). Hopefully conservatives are willing to conform to their standard principles and subject the poor to standards they wouldn’t apply to anyone else- then maybe private insurers will follow past practice and mimic the cost-saving initiative of Medicaid. After all, this is what they’ve done for decades- follow the lead of public insurers like Medicaid and Medicare when they introduce major cost savings into the American health care system. This helps explain why private health insurance has been less effective at cost-control for at least the past decade- they just tend to not lead and innovate as much.

In conclusion, only a minority of Medicaid’s problems and potential cost savings could ever come from restructuring the program itself- the majority is attributable to the underlying health care sector which needs to be completely reformed. (Still waiting on that “replace” part of “repeal and replace.”) Changing Medicaid will do little about that, but since conservatives don’t have a plan for that yet- the logical point for them is to go after the smaller problem that they have ideas for- modifying Medicaid itself. One thing Medicaid could do is take the lead and crack down on provider clout and supply-induced demand, a problem which affects all of the American health care system. Just look at Massachusetts- http://www.boston.com/news/local/massachusetts/articles/2010/01/29/attorney_general_says_clout_drives_up_health_costs/ Next, New York Medicaid could take on the politically powerful hospitals and stop subsidizing their training of physicians (that’ll be the day…). In terms of actual, plausible problems with New York’s Medicaid- they could try to do a better job of preventing wealthy people from gimmicking the system to get Medicaid, and they could cut down the number of personal care hours people receive to put the state in-line with the national average). Or New York could take the moral highroad and follow the state furthest along in changing Medicaid- Arizona. What have they done there? (or proposed and waiting for federal government and state legal permission) Increased cost-sharing, frozen enrollment in a catastrophic care program, eliminated funding for certain ER visits, eliminated health coverage for 136,000 people, etc. What brave and courageous people.

TJE said...

Policy is complex Patrick. Your last posts suggest some understanding that there are many reasons why NYS is an extreme outlier in Medicaid spending-- demographic, econonomic, policy, *political*. But your steadfast defense of the medicaid status quo in NYS would be of little help to Governor Cuomo or Governor Paterson or Governor Spitzer, each of whom recognized problems in the system.

Patrick_L said...

I'm well aware there are many things states could do to improve Mediciad- just as they've been doing for decades without block grants. I'm also aware that the primary problem is the underlying flaws in the American health care system that have been causing it to slowly deteriorate over time as insurnce levels fall, costs increase, and outcomes remain unchanged.

I just think it would be smart for policymakers to address the actual cause or underlying condition, not just treat the symptoms.

TJE said...

Btw PL, NYS is also an extreme outlier in shifting medicaid costs to counties:

"New York State’s Medicaid program leads the nation when it comes to providing Medicaid—public health
insurance coverage—for those who cannot afford to pay for medical care. our Medicaid program serves
nearly five million residents, is rapidly growing and accounts for 40 percent of the total $136 billion State
Since the inception of its Medicaid program in the 1960s, New York State has placed tremendous admin-
istrative and financial responsibility on counties and county property taxpayers. Medicaid is the single
largest, mandated budget item in every county. it consumes, on average, 45 percent of each county’s real
property tax levy. Counties do not set eligibility, determine the benefits or set reimbursement rates for the
Medicaid program. in 2010, counties in New York State will pay approximately $7 billion to help finance
the State’s Medicaid program."

Source: NYS Association of Counties

Patrick_L said...

a county seems like a silly level of government to be interacting with a program like Medicaid- it may be funnelling funds through the county-structure, but there's no way a county would have the sufficient ability, reach, and expertise to handle a health care system where people are going all over the state for their health care every day.