Aaron Carroll on Medicaid Wars

Enough people have linked to this piece that I thought I should write a response, which you will find under the fold…

To start with a general remark.  Often defenders of ACA request some kind of conservative engagement with the policy, rather than voting for the 34th (?) time for outright repeal with no coherent story of replacement.  I’ve laid out a coherent scenario of how ACA could evolve into something which I consider better, and actually with only modest changes to the law itself.  The mandate gets narrowed, the system as a whole evolves into means-tested vouchers (which proponents such as Zeke Emanuel favor), and possibly HSAs are given a larger role again.  I say states will try to limit Medicaid growth, not that they should but that probably they can over the longer run.  Defenders of the current ACA don’t have to favor my analysis, but in fact what I get back is sheer annoyance from Carroll, repetition of Carroll from various others, and an attack from Krugman, with no substantive engagement on the policy proposal at all.

Carroll writes five times that he is annoyed by my piece, but in hardly any of those cases is he disagreeing with any position I took.  Let’s go through them one-by-one:

I get a bit annoyed when people claim that we can’t “afford” more government intervention or, god-forbid, single-payer. That kind of statement willfully ignores the fact that every country that has MORE government intervention spends LESS.

I most definitely did not say this and in fact I mentioned that single payer systems lower cost.  Spending more on Medicaid, however, will not save the U.S. money (the Oregon study shows this), whether or not we can normatively “afford” it.

I get a bit annoyed by the claim that an expansion of government insurance leads to lines and waiting when lots of countries have universal access and less of a wait-time problem than we do.

A significant influx of people into Medicaid, under current institutions, will lead to more queuing.  That is true whether or not you think other countries with single-payer have big queueing problems.  What I wrote was this:

Unfortunately, Medicaid has some of the worst features of single-payer systems. Typically, a single-payer system will bargain down medical prices, thus adding to affordability, but at the risk of having long lines of patients waiting for care. As it stands now, though, the low reimbursement rates of Medicaid already lead to long lines, or an inability to find a good doctor altogether, while the higher reimbursement rates of Medicare and private insurance keep health care costs high.

It’s even carefully worded “…at the risk of having long lines of patients waiting for care.”  Supply elasticities are positive and so single-payer systems do run this risk.  Yet I am clear that in critical regards the systems of other countries get the better end of this deal compared to the United States.

Another bit:

I get a bit annoyed by blanket claims that doctors won’t accept Medicaid. Such statements often ignore the fact that the majority of Medicaid beneficiaries are children and pregnant women. We don’t need all types of doctors to accept Medicaid patients in equal numbers. They also ignore the fact that lots of doctors won’t accept new patients with Medicare or private insurance, either.

It is very difficult to find a good doctor in northern Virginia who takes Medicaid and I speak from personal experience (helping others).  Or try any number of basic websites, with common quotations such as “Finding a Medicaid doctor constitutes a challenge…”  Medicaid dentists are hard to find.  Try calling say the Washingtonian “best doctors” list and see how many of them take Medicaid.  Large numbers of doctors do take Medicaid but overall they tend to be much worse and there are also problems with queuing.  Think about it: why would the lower payers end up first in line?

There is more annoyance:

I get a bit annoyed when people just claim government programs are “unpopular”. Like Medicare? I don’t think so. Is there any evidence that Medicaid is unpopular? I’d like to see it. Personally, I think that the fact that (a) all 50 states have bought in over time and (b) the Supreme Court just ruled that threatening to take it away is “coercive” speaks to the opposite. Additionally, polling shows the opposite of what Tyler (and lots of others) suggest.

I am sorry but this is a total “read fail.”  I am saying Medicaid (not “government programs” or “Medicare”) will become increasingly unpopular.  (In fact I am known for arguing that big government as a whole is quite popular.)  Every day in the newspaper there is handwringing by governors, not all Republican ones, about wishing to limit or escape Medicaid obligations.  A lot of them would prefer to get block grants and spend the money elsewhere (a simple question for Carroll: if Medicaid is so popular with voters, there is no reason to fear block grants to the states, right?  Voters surely will insist that Medicaid spending be kept at current levels or perhaps even increased.)  Daily Kos serves up plenty of evidence for the lukewarm support for Medicaid, as does Ezra Klein: “But, for a host of reasons, Democrats worry that Medicaid is more endangered than people realize.”  Also note how skimpy Medicaid coverage is in many states.  A lot of states don’t really try to cover poor adults, without children, at all.  Frankly this is standard fare, especially on the left, but somehow if I write it he gets annoyed.

If you poll people and ask them whether they favor health care for the poor, of course they will say yes.  The bottom line is this: right now we are borrowing about forty cents of every dollar spent.  As we move toward fiscal balance, which are among the most vulnerable programs?  Defense spending may be cut somewhat, but Medicaid is far more vulnerable than either Social Security or Medicare.  I didn’t know that was under dispute and in fact it really isn’t.

Some more annoyance from Carroll:

I get a bit annoyed at the blanket acceptance of the awesomeness of the free market in health care, when there is no phenomenal evidence of its success. And again, those countries with less free market are cheaper, universal, and often just as good. So why are we always trying to run away from them?

That is another “read fail.”  What did I call for in the column?

We would then have government-subsidized and mandated catastrophic insurance, and a freer market for other health care expenditures. We might even return to a health savings account approach on the noncatastrophic side.

I also note in the column that is not my first best, but we Americans probably cannot get easily to a first best system (for me a Singapore-style system, with single payer on the catastrophic side rather than mandates for private insurance purchase).  My accompanying blog post even noted that the HSAs could be supplemented with government funds, if it was so desired.

The real argument of the column is that ACA will fall apart for political reasons because it creates too many different groups with different treatment.  The “mood affiliation” of the column is something other than celebration of ACA, and so Carroll pulls out all of the old chestnuts and attacks them, rather than responding to the actual argument.  Basically he should go back and reread the piece itself.


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