Inquirer staff writer Don Sapatkin asserts in a straight news article that the Medicaid changes Tom Corbett is demanding will be “money-saving”:
Linking the two issues – a Medicaid expansion envisioned by the Affordable Care Act and money-saving changes in a program that he considers unsustainable – could achieve goals sought by liberals and conservatives. But it will require a delicate balancing act with both parties in Harrisburg as well as the Obama administration.
That sounds nice, but what are the changes Tom Corbett is actually looking at?
Corbett has made clear that he wants to change Medicaid. In recent statements, however, Beverly Mackereth, secretary of the Department of Public Welfare, was more specific about what “personal responsibility” might look like. There might be a “work-search” requirement, for example, and co-pays for emergency-room visits.
That sure doesn’t sound like a money-saving idea. If I have Medicaid for my health insurance and have to start paying a co-pay at the emergency room, when I don’t currently, that makes it more expensive. It might save taxpayers a little bit of money, but nothing significant, and the main effect will be to make things more expensive for Medicaid enrollees.
And if my job just doesn’t pay very well so I qualify for Medicaid, making me waste my time on the completely useless Careerlink website to satisfy a “work search requirement” doesn’t save me any money or time. And if state employees have to spend extra time monitoring my busywork or helping me find a new job, that could end up costing taxpayers more too.
It also doesn’t make sense to say that subsidizing private insurance, instead of simply enrolling more people in Medicaid, saves money:
Corbett has also expressed interest in using federal Medicaid expansion dollars to subsidize private insurance, as Arkansas and Iowa are trying to do. His office has been exploring options with the U.S. Department of Health and Human Services, Mackereth has said, and is discussing possibilities in meetings with members of the General Assembly this week.
Regular readers already know this, but private insurance is significantly more expensive than Medicaid, and does a much worse job of controlling costs despite offering essentially the same access to care.
That is why a Rube Goldberg scheme of subsidizing private insurance plans will not be cheaper than a simple expansion of public insurance. There is no evidence to support this idea. Private plans are more expensive and do not provide better health outcomes. If we have a fixed amount of money to spend on Medicaid or private plans, we’re simply going to get less bang for our bucks with the private plans.
Tom Corbett has an unshakable political belief that private always equals better and cheaper, but there’s just no reason to believe that is the case with health insurance. It is far from clear that state taxpayers would benefit from this scheme, and the insurance plan beneficiaries would get more expensive, less expansive coverage.
The only parties who would benefit from this are doctors as hospitals who would see higher reimbursement rates from the private plans for the same amount of work (pure grift, in other words) and the tea people who get to swaddle themselves in a warm blanket of ideological purity.