Let’s Take Politics Out of Healthcare

Let’s Take Politics Out of Healthcare

Let’s Take Politics Out of Healthcare

healthcare politics

The federal government’s surprise move against Georgia

In a raw political move, the Centers for Medicaid & Medicare Services (CMS) removed the approval of Georgia’s Pathways to Coverage, labeling the program as “pending.” 

Despite the fact that the COVID-19 vaccine rollout is consuming the resources and attention of the Governor’s office and the Department of Community Health, CMS gave Georgia only 30 days to respond before the federal government might eviscerate the program. In its February 12 letter, CMS targeted the program’s work or other community engagement components and also threatened “review” of other provisions of the program. 

This move by the new administration in Washington, D.C., appears to be unprecedented. Finally secured last fall, the approval was part of an administrative process, which included time for public comments, that took years to develop. 

Pathways to Coverage serves non-disabled adults below the poverty line. It is a critical component of Georgia’s plan to reduce the number of uninsured and make healthcare coverage more affordable, without sacrificing quality of care or causing other serious drawbacks associated with a traditional Medicaid expansion. It is based on the idea of not keeping these adults below the poverty line but moving them above it. 

The Success Sequence provides an outline of how to reverse the cycle of poverty in our communities. GCO uses this as a framework for much of our work.

Let’s focus on helping people instead

Pathways to Coverage is really about helping people. Readers might want to check out my prior blog on this program as well as some of our published research on fixing the healthcare system.

The so-called Affordable Care Act (ACA) has caused havoc for Georgians when it comes to healthcare coverage and costs. The rate of healthcare price increases did not abate but accelerated. As we reported before, our own data analysis confirmed other research by showing that for individual markets, “Georgians suffered average price increases of 70.7% for Bronze plans, 77.3% for Silver plans, and 70.4% for Gold plans” over five years.

We also found that prior to the ACA, the median cost for a health insurance plan on the individual market for a family of four was $5,386 per year. But within six years, the cost varied from $17,550 to $26,081, depending on the level of the plan. 

The bulk of Georgia’s uninsured problem lies not below the poverty line, but above it. Therefore, Pathways to Coverage necessarily links to Georgia’s Reinsurance Program designed to drive down costs in the individual markets. The test of the demonstration project will be to see how well Georgia can move people out of poverty into situations where they have better opportunities and more resources for health coverage, such as coverage through affordable individual markets or, better yet, employer-based coverage. 

America has one of the world’s best and most innovative healthcare systems, if you have insurance to afford it. By far, employer-based and private insurance provides the best coverage. Medicaid has among the worst healthcare outcomes, can trap families in poverty (as we and others have demonstrated), and can be an obstacle in moving to the much-better private coverage. Incentivizing people to improve their circumstances is an important strategy that this demonstration project hopes to prove. 

The Spirit of the Law

The new administration in Washington might feel like they are doing the right thing by attempting to strongarm states like Georgia into Medicaid expansion. However, this action raises concerns. 

First, the question of whether the federal government can mandate states to expand Medicaid was already settled in the negative by a seven-to-two U.S. Supreme Court ruling. Second, removing a critical component of this demonstration project will not likely accomplish expansion but, if followed through, will compromise the effectiveness of the project. Third, it goes against the whole purpose of demonstration projects. 

Pathways to Coverage is an approved—and hopefully remains so—Section 1115 waiver to Medicaid rules, which is found in the Social Security Act. In enacting this section of the law, Congress acknowledged that a one-size-fits-all approach dictated by the federal government is not always the best way to solve our public policy challenges. 

Congress acknowledged this principle again when it enacted Section 1332 of the Affordable Care Act that allows states to come up with alternative plans in coordination with Section 1115 waivers. Georgia took advantage of both these provisions of law in developing its healthcare strategy. 

Finally, demonstration projects allow states to experiment with what works best. Without experimentation, we hinder our ability to discover better ways to run public programs for the benefit of people. 

What’s next

The best overall resolution would be for CMS to reinstate the approval and allow the demonstration to move forward. CMS will monitor the project, of course, but it must let it play out to see if the project will demonstrate a better way. Georgia has a vested interest in making it work. If not, Georgia could choose to modify or abandon the project. Besides, the federal government will have the opportunity to review the results when the waiver comes up for renewal.

Failure to reinstate the approval will likely result in a legal struggle before the courts. Who knows how long such a legal process will take? Instead of using our resources and time to bicker before the courts, we should apply them to seek out the best ways to improve people’s lives. 

*Erik Randolph is Director of Research at the Georgia Center for Opportunity. This blog reflects his opinion and not necessarily that of the Georgia Center for Opportunity.

Breakthrough 2019 – A Sustainable Vision For Helping The Poor

Breakthrough 2019 – A Sustainable Vision For Helping The Poor

Breakthrough 2019 – A Sustainable Vision For Helping The Poor

Is there a solution to poverty? That’s the question GCO president and CEO Randy Hicks discussed with AEI president Robert Doar as a keynote at Breakthrough 2019.

One powerful step forward in the anti-poverty fight is the Success Sequence: Helping as many people as possible attach to employment, stable family lives, and education. And solutions come locally.

“We don’t really succeed in helping people move up unless we have a really great and strong civil society and faith-based institutions helping people on a one-to-one basis,” Robert Doar shared. “Government can write a check. Government can fund a program. But it can’t help a person get a job or help a child learn to read. That happens at a local level in an individual experience.”

The impact of healthcare costs on upward mobility

The impact of healthcare costs on upward mobility

The impact of healthcare costs on upward mobility

For high-income individuals and families, a visit to a doctor’s office is a financial non-event. They typically have robust health insurance to cover the out-of-pocket costs, and their co-pays are low and easily affordable.

But for poor and even middle-income families lacking health insurance—or trapped in plans with poor coverage and high deductibles—a simple visit to the doctor can be financially devastating.  

As the recent government shutdown revealed, nearly 80% of American workers live paycheck to paycheck. Given this reality, it’s no surprise that high healthcare costs are all-too-often the straw that breaks the proverbial camel’s back and drives people facing overwhelming medical costs into bankruptcy.  

 

%

Georgians lack any health insurance

 

The American Dream is at risk   

Tragically, the inability for many to afford quality healthcare is the primary reason why fully 13.3% of Georgians lack any health insurance today. Indeed, the exponentially exploding cost of healthcare significantly discourages poor and even middle-class people from visiting the doctor—resulting in longer term, poorer, and ultimately more expensive health consequences.

The bottom line is that despite its name, the ACA has not improved the health insurance system, nor has it achieved its two primary goals—universal coverage and affordable healthcare.

Indeed, in the nine years since passage of the ACA in 2010, not only is a significant percentage of the population not insured, health insurance premiums have grown 60 percent faster than the general inflation rate—while medical care services have increased 90 percent faster and hospital services more than three times as fast.

Simply put, when 17.9% of our nation’s GDP is spent on healthcare—totaling $3.5 trillion, or $10,739 per person annually—how can people in the lower and middle income levels ever hope to move up the ladder of economic mobility and achieve the American dream?

Will be pushed below the poverty line due to medical expenses

Healthcare costs are devastating for the poor

One study from 2018 in the American Journal of Public Health showed that 7 million people who make above 150 percent of the poverty level were pushed below the poverty line due to medical expenses. And 4 million of that number fell into extreme poverty (50 percent below the poverty line). Other facts throw even more fuel on the fire:

  • Medical debt is a major cause of bankruptcy in the U.S.
  • Poor and middle class people spend a higher percentage of their income on healthcare than the rich do.
  • A significant story—often overshadowed by rising premiums—is the fact that health-insurance deductibles have also risen. This means that even when people need to use their high-cost health insurance plans, they still end up paying more and more out of pocket before their insurance benefits kick in.

Given this reality, it’s clear that when poor and middle-class Georgians are buried under an avalanche of medical expenses they have a much harder time pursuing the things we know increase upward mobility, including getting a better education, which leads to landing a better job with better medical insurance and a greater ability to save money, buy a house, and not be forced to live month-to-month.

 

Encouraging upward mobility through healthcare reform

Here at GCO, our mission is to remove barriers that keep people from thriving. In a very real sense, the overwhelming costs associated with healthcare are a burden that prevents both poor and middle class Georgians from moving upward on the economic ladder and achieving their dreams.

This is why we are calling for a comprehensive set of consumer-driven, market-based reforms to stabilize the current safety net program and achieve universal coverage for all Georgians by:

  • Untethering healthcare from its close association with employment so that people won’t lose their insurance because they lose or change a job.
  • Making shopping for health insurance just like buying any other insurance product so that consumers can identify coverage and price options—and compare apples to apples.
  • Providing subsidies from the government—run by the Georgia Gateway—to allow low-income individuals and families to purchase insurance on the private market. This system would be means-tested by an eligibility engine that eliminates welfare cliffs and marriage penalties.

Thanks to federal waiver applications offered through the Trump Administration that allow states to come up with their own solutions to the healthcare crisis, Georgia has a unique opportunity to enact meaningful health-insurance reform that not only addresses access to high quality insurance coverage, but also keeps families from falling down the economic ladder into poverty because of a medical crisis.

Read more:

A Real Solution for Health Insurance and Medical Assistance Reform

What Does an Ideal Solution to the Health Insurance Crisis Look Like?

Government healthcare benefits create another welfare cliff that hurts the poor

Government healthcare benefits create another welfare cliff that hurts the poor

Government healthcare benefits create another welfare cliff that hurts the poor

Imagine being a worker on government assistance because your job doesn’t quite meet your bills. Then, finally, you get that raise to put you over the top and relieve some stress.

The one catch: You lose assistance needed for things like health insurance. Now, you bring home less than before.

This is called the “welfare cliff,” and it’s a situation for far too many people working to get off government assistance.

And the biggest culprit of this “welfare cliff”? Healthcare. 

A practical example

Picture a single person earning the equivalent of $8.25 per hour in a full-time job with no health benefits. She would qualify for Medicaid under the Affordable Care Act’s expansion rules. But just by earning a five-cent-per-hour raise would disqualify her entirely from Medicare due to the benefit cliff.

What’s more, the welfare system is also discouraging this single mom from marrying. Only in a situation where the dad earns enough to overcome the loss in benefits would marriage be financially worthwhile.

This example shows the negative impacts of welfare cliffs in preventing people from transitioning off assistance, moving up the economic ladder, and creating better lives for themselves and their families. While well-intentioned, these welfare benefits end up trapping people in a low-income existence.

The real tragedy of welfare cliffs is that hard-working welfare recipients who are striving to get ahead find that becoming independent of public assistance is virtually impossible because of the financial hardship they will have to endure.

 

Georgia Welfare Cliff

Disincentives for Work and Marriage in Georgia’s Welfare System

A practical example

Picture a single person earning the equivalent of $8.25 per hour in a full-time job with no health benefits. She would qualify for Medicaid under the Affordable Care Act’s expansion rules. But just by earning a five-cent-per-hour raise would disqualify her entirely from Medicare due to the benefit cliff.

What’s more, the welfare system is also discouraging this single mom from marrying. Only in a situation where the dad earns enough to overcome the loss in benefits would marriage be financially worthwhile.

This example shows the negative impacts of welfare cliffs in preventing people from transitioning off assistance, moving up the economic ladder, and creating better lives for themselves and their families. While well-intentioned, these welfare benefits end up trapping people in a low-income existence.

The real tragedy of welfare cliffs is that hard-working welfare recipients who are striving to get ahead find that becoming independent of public assistance is virtually impossible because of the financial hardship they will have to endure.

 

Georgia Welfare Cliff

Disincentives for Work and Marriage in Georgia’s Welfare System

What’s the solution?

We all want a welfare system that truly serves as a safety net, helping those who can’t help themselves while encouraging able-bodied adults to find work, improve their lives, and form stable marriages and families.

The Georgia Center for Opportunity has proposed welfare reforms that would:

  • Combine programs and reduce confusion and redundancy
  • Not punish welfare recipients for earning more
  • Encourage marriage and family formation

For healthcare specifically, our goal is to create a market-driven system that improves healthcare access for everyone by equalizing risk across the entire insured pool (as insurance is supposed to do), driving down prices while enhancing quality, having health insurance follow people rather than employers, and eliminating welfare cliffs and marriage penalties.

For those who are able to work, the ultimate question is this: Should the purpose of government-sponsored, means-tested healthcare programs, like Medicaid, be to get people back on their feet as they transition into the workforce? Or should the purpose be to provide perpetual benefits, with no end in sight?

Read more: A Real Solution for Health Insurance and Medical Assistance Reform

Read more: What Does an Ideal Solution to the Health Insurance Crisis Look Like?

Expanding Medicaid is not enough to help middle class families in Georgia

Expanding Medicaid is not enough to help middle class families in Georgia

Expanding Medicaid is not enough to help middle class families in Georgia

Some in Georgia are pushing for a full expansion of Medicaid. As the Georgia Center for Opportunity (GCO) team has outlined before, this step would do more harm than good for low-income Georgia families.

But there’s another narrative unfolding that tends to not get much attention: expanding Medicaid doesn’t solve the problem of uninsured middle-class families in the Peach State. Far from it, in fact.

    Georgia lags most of the rest of the nation on health insurance

     

    The un-affordability problem

    Proposals to expand Medicaid would extend the program to households earning 138 percent or less of the federal poverty limit ($35,535 for a family of four). As GCO scholar Erik Randolph writes in a new report (What Does an Ideal Solution to the Health Insurance Crisis Look Like?), nearly 60 percent of Georgians have incomes above that threshold.  

    So, what does that mean in plain language? Simply that even with tax credits available under the Affordable Care Act (ACA) that subsidize the cost of insurance, hundreds of thousands of Georgia families still consider the cost unaffordable. 

    The statistics on who is insured and uninsured in Georgia bear this out:

    • Nearly half (46 percent) of uninsured families of four have annual incomes between $35,535 and $103,000.

    Woman's hands with pills and money in black and whiteA newly released report from the consulting firm Deloitte found that Georgia lags most of the rest of the nation on health insurance:

    • Georgia’s uninsured rate is 14.8 percent, compared to 10.5 percent nationally.
    • Around 28.5 percent of the uninsured population is below the poverty line (478,000 people) compared to 19.6 percent nationally.
    • Minorities are particularly impacted: 33 percent of Hispanics and 15 percent of African-Americans are uninsured, compared to 12 percent of whites.

    While those near or at the poverty level are impacted by the current healthcare crisis, they’re not alone. Even the middle class can’t afford health insurance. Average prices for plans on the ACA exchanges have increased by around 70 percent since 2014. And in some Georgia counties, they’ve more than doubled.

     

    A new system is needed

    Earlier this year, Governor Brian Kemp and lawmakers in the General Assembly took the right step when they passed a bill authorizing healthcare waivers for Georgia. This is a crucial step toward full healthcare reforms that help the truly needy while lifting people out of poverty and encouraging healthy family formation. However, this is not a comprehensive solution because once families are lifted out of poverty, they still face the mounting costs of health insurance.

    The answer comes in the form of a market-based, consumer-directed health insurance system. Under GCO proposals, Medicaid in our state would be fundamentally changed and consolidated with other programs so that the most underserved can access the same health insurance as everyone else. As a result, no one gets trapped in the welfare system.

    These proposals also make health insurance affordable for the middle class, empower consumers to shop for the right plan, and solve the portability problem by no longer tying health insurance to employers.

    In the end, everyone will benefit—poor, middle-class, and rich—under these proposals that bring common sense and sanity back into the healthcare marketplace.

    Read more: A Real Solution for Health Insurance and Medical Assistance Reform

    Read more: What Does an Ideal Solution to the Health Insurance Crisis Look Like?

     

     

     

    The health care crisis is debilitating for those in poverty

    The health care crisis is debilitating for those in poverty

    The health care crisis is debilitating for those in poverty

    A look at the correlation between health care insurance coverage and poverty in Georgia reveals some sobering facts:  

    • 41 percent of uninsured Georgians have annual incomes at or below $35,535.
    • Lack of insurance coverage is one of the prime reasons why life expectancy for those in poor neighborhoods is fully 10 years shorter than in the richest areas. 
    • Premiums in the individual health insurance market have more than doubled since passage of the Affordable Care Act (ACA) in 2010. 
    • For low-income families and those stuck at or below the poverty threshold, healthcare is one of the top expenses and plays heavily into the welfare cliff, which keeps folks mired in poverty. 
    • Despite generous government tax credits, premiums for low-income families on the ACA health care exchanges are still unaffordable. 

    “The health care crisis is a poverty crisis.

    Clearly, America’s failing healthcare system disproportionately impacts the poor. And despite multiple federal and state programs aimed at creating a safety net, the poor still aren’t getting adequate health care. The bottom line is that our health care crisis is a poverty crisis. 

     

    A complicated, fragmented system

    Imagine going to the doctor and not knowing whether your visit will be covered or what you should expect to pay. That’s the exact scenario that plays out for millions of low-income Americans every week. That’s partly because of rather than receiving health care coverage through one unified plan, low-income families in Georgia frequently cobble together fragmented plans.

    For Georgians under the age of 18 living in a family at 138 percent of the poverty level or less, 60 percent have different coverage from their mother and 70 percent have different coverage from their father.  

    And depending on individual circumstances, health insurance can come through a job, individual markets, ACA exchanges, and government programs such as Medicaid, PeachCare, Medicare, TriCare, VA services, and the Indian Health Service—all with different rules for eligibility.

     

    The time is ripe for meaningful reforms in Georgia

    Instead of simply expanding Medicaid and trapping more people in the welfare system, we must explore options that help pull people out of poverty.

    The solution is a consumer-directed market system coupled with a reform safety net program that achieves universal coverage for all Georgians by:  

    • Untethering health care from its close association with employment so that people won’t lose their insurance because they lose or change a job.
    • Making shopping for health insurance just like buying any other insurance product so that consumers can identify coverage and price options—and compare apples to apples.
    • Providing subsidies from the government—run by the Georgia Gateway—to allow low-income individuals and families to purchase insurance on the private market. This system would be means-tested by an eligibility engine that eliminates welfare cliffs and marriage penalties.

     

    A Hope For Georgians

    The good news is that the President’s Administration is encouraging states to come up with their own solutions to the health care crisis through federal waiver applications. This means Georgia has a unique opportunity to enact meaningful health-insurance reform that not only addresses the health care crisis, but also helps pull families out of poverty.

    Read more: A Real Solution for Health Insurance and Medical Assistance Reform

    Read more: What Does an Ideal Solution to the Health Insurance Crisis Look Like?