We’ll have more to say about Tom Corbett’s health care plan when the administration releases an actual proposal, but in the meantime here are some thoughts on the speech:
It is not clear that Tom Corbett knows what Medicaid is. Medicaid is an insurance plan for low-income people, people with disabilities, and people who need long-term care, among others. It is not primarily an insurance plan for unemployed people. During the Great Recession, there was a big increase in the number of poor people, and thus more people qualified for Medicaid, so the enrollment numbers increased. The people who would qualify for enrollment with a regular Medicaid expansion though already have jobs, and just don’t make very much money.
So for Tom Corbett to talk about adding a work search requirement to Medicaid (a “Pathway to Independence”) really does not make any sense. Why would we require people who already have jobs to search for jobs? Especially on Careerlink, which is one of the Internet’s most useless websites? This must be a joke.
But unfortunately it is not a joke, because it fits perfectly into Tom Corbett’s Grand Theory of the Great Recession.
Since 2010, Tom Corbett’s understanding of the economic downturn has been that “the jobs are there” but people just don’t want to take them because they are lazy or maybe on drugs or something. Although it has been unclear why so many people would all become methheads at once, or just stop feeling like going to work in droves, Corbett still believes that a sudden scourge of laziness, not a shortage of job openings, is to blame for mass unemployment.
This fake Medicaid expansion plan plugs right into the Corbett theory of the downturn. If he can just get some of these unemployed people who are (not actually) on Medicaid into some of these (greatly reduced numbers of) jobs, then some of them will get employer-provided insurance (lol) instead of Medicaid, reducing the state’s Medicaid outlays.
This all breaks down at step 1, since we’re talking about people who already have jobs. If there were some better, higher-paying jobs out there, people would be taking them. But the jobs aren’t there, so lots of people are stuck in low-wage jobs where they qualify for Medicaid. Maybe if we raised the state minimum wage to $13 an hour or so, we could get some people out of Medicaid by redistributing some of the costs of a decent society onto employers and consumers, but Tom Corbett and the Republicans are extremely hostile to that idea for some reason.
The other idea in the plan that makes no sense is this proposal to subsidize private insurance plans instead of straightforward expansion of the Medicaid rolls. Why would we do that? Because “competition always reduces prices,” Corbett thinks. Actually, competition between insurers increases prices. Health care prices are primarily the result of a political fight between health care providers (doctors, hospitals, pharmaceutical companies) and payers (public and private insurers, and individuals).
The provider side is getting bigger and more consolidated all the time. The payer side is badly fragmented between the large public insurers, some large private insurers, and then a big mess of small private insurance companies and individuals. The bigger the payers are, the better of a job they do on cost control, i.e. the less money they pay to providers. So if we want to pay less, we need less competition between payers, not more.
Medicaid pays less than Medicare pays less than private insurance pays less than individuals. So increasing competition between insurers, rather than expanding the number of people in Medicaid, is going to get us higher prices overall and more health care spending, not less. If we subsidize private plans, like Tom Corbett wants to do, we’re going to pay more and get less.
The CBO agrees. Here’s what they have to say about the effect of a plan like this on federal spending, and it’s much the same for the state level:
For the average person who does not enroll in Medicaid as a result of the Court’s decision and enrolls in an exchange instead, estimated federal spending will rise by roughly $3,000 in 2022—the difference between estimated additional exchange subsidies of about $9,000 and estimated Medicaid savings of roughly $6,000.
There is plenty of other evidence that the “private option” Corbett envisions would cost more and cover fewer people than a straightforward Medicaid expansion, for those who care more about evidence than stroking deeply-held ideological superstitions. That group evidently does not include Tom Corbett, and today’s announcement is just the latest reminder that the Medicaid expansion debate has nothing to do with cost control.