Why Paul Krugman Should Go On Medicaid

Why Paul Krugman Should Go On Medicaid

If Paul Krugman thinks Medicaid is so great, he should try it out for himself.
Ben Domenech
By

Paul Krugman wrote recently about how Medicaid is the salvation of the American health care and entitlement system, because it controls costs so efficiently and none of the problems you hear about really matter.

Ah, but you say, Medicaid patients have trouble finding doctors who’ll take them. Yes, sometimes, although it’s a greatly exaggerated issue. Also, middle-class patients would surely be unhappy if transferred from the open-handedness of Medicare to the penny-pinching of Medicaid. But the problems of access, such as they are, would largely go away if most of the health insurance system were run like Medicaid, since doctors wouldn’t have so many patients able and willing to pay more.

Krugman thinks the problems of Medicaid when it comes to access and quality are greatly exaggerated, and that it provides a worthwhile example of how to control health care costs. On the latter, he’s of course completely correct: denying access to care to patients and denying market-value payment to physicians will absolutely control costs.

But what about the rest of it, that access and quality bit? We already see Obamacare-supporting groups complaining about potential access problems in thinly-sliced coverage networks. And that’s within the health exchange marketplace, not the stand in line Medicaid system.

The truth is, as Adam Garfinkle notes, the access problem is one Obamacare exacerbated rather than correcting, particularly given the mandatory Medicaid requirement for those below 100% FPL:

We are slowly (or not-so-slowly) but surely moving toward a much more finely gradated class-based system of healthcare. Compared to where we were before Obamacare passed, the top is moving up and the bottom is moving down faster than ever, leaving a thinner middle where most Americans with employer-provided health insurance have typically been—somewhere in the murk between HMOs and PPOs of various descriptions. Now, those who can afford it will increasingly pay more and get more. Those who cannot afford it will pay less and get less.

We already know that Medicaid fails to deliver on its promise of access to quality care.  John Goodman has been writing for years about the problems the poor are going to face under the Medicaid expansion when it comes to access and quality:

Thirty-two million otherwise uninsured people will try to double their consumption of medical care. Almost everyone with private insurance and all Medicare enrollees will try to increase their consumption of preventive services — promised without deductible or copayment. With no increase in supply, doctors and patients will face a huge rationing problem. There will be up to 900,000 additional emergency room visits and the time price of care (rationing by waiting) will jump substantially at every emergency room, every primary care facility and for most specialty services as well. If everyone in America succeeds in getting all the recommended preventive care, for example, primary care physicians will have to spend more than 7 hours of every working day delivering services to basically healthy people.

Patients whose plan pays below-market rates will be pushed to the rear of the waiting lines; this includes our most vulnerable populations — the elderly, the disabled and poor families on Medicaid. In the meantime, a large flourishing market for concierge services is likely to emerge — draining resources from the third-party payer system and making the rationing problem worse for all who are left behind. In general, the left is obsessed with distributional issues. That’s why it’s so surprising that they passed a law that is going to force middle- and upper-middle-income families to have more insurance than they really want. Once they have it and act on it, they will in the process make access more difficult for the poorest and most vulnerable segments of society.

This gets back to the core failure of Obamacare: a misunderstanding of the purpose of universal health insurance, and the idea that it is a good thing which corrects the real problems in our health care system. For a significant portion of the population, and one which drives an outsized percentage of health care costs, the problems they face require direct delivery of care and social services as opposed to coverage. The problems they face are less about coverage than they are education, poverty, drug addiction and violence, broken families and communities. These are, as it happens, the same people for whom mandates don’t work – they don’t comply, they don’t sign up, most don’t pay or owe taxes, and they show up in the emergency room when they have an issue. But rather than target direct delivery of care to these needy populations, Obamacare shoves them into an already overcrowded Medicaid system, with health outcomes that range from the terrible to the merely below average, and says “here’s a card, now you’re covered.” It’s doubling down on the race to the bottom.

As for Krugman: today, in many Medicaid systems, it’s easier to get an appointment by saying you’re uninsured and promising the doctor $20 cash than saying you’re on Medicaid. If Krugman actually believes that’s not a problem, I propose he ditch his gold-plated health plan immediately, take a hint from the dual eligibility seekers, and go on Medicaid. He’s 60, after all, and the paradise of Medicare isn’t there yet for him. Why not give it a try? New Jersey has one of the most well-funded and generous Medicaid plans of any state, tied for second in the country and actually more generous than Obamacare’s 138% FPL cutoff for parents. Of course, they only pay 29 cents on the dollar compared to private insurance, which is why New Jersey doctors are the least likely in the country to accept new Medicaid patients.

But I’m sure that won’t be a problem for Krugman, except perhaps in the individual sense. We have to keep in mind what really matters, which is the chart.

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