The Incalculable Health Costs


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For 2008, (latest figure available) Medicaid spending for nursing home care was $56.3 billion, according to CMS. Giant insurer MetLife says the average cost of a year in a nursing home was approximately $80,000 in 2009. And, it said, price rollbacks in other services throughout the country have not affected long-term care service providers. If nursing home care costs increased by only 3 percent a year, by 2011 they would exceed $84,000.  If, for instance,t only 2 percent of the now living 70 million baby boomers are eligible for Medicaid and need nursing home care. Costs to the taxpayers could total uncountable trillions of dollars. Looking far ahead, the number of people 65 and older in America is calculated to double, from 39 million now to 89 million by 2050. Woe be to then-living taxpayers.

Don’t Medicaid patients have to make a co-payment for medial services? Not for birth control planning services, chemotherapy, dental treatment for children, doctor fees for out-patient surgery, doctor visits in a nursing home, emergencies, home services for mentally retarded, disabled or elderly, preventive health education, physical therapy, radiation, or renal dialysis, or if you are in a nursing home, or under 18, pregnant, or getting birth control services. For other care, patients pay $1 or $2 dollar co-payments, or often nothing.

Gripes have come from most states that paying their share of Medicaid will bankrupt them. The new law, however, has the federal government, as I’ve noted, picking up 90 percent of the cost of the expanded Medicaid in future years. Robin Rudowitz, policy analyst with the Kaiser Family Foundation, on National Public Radio, explained: “There’s sole federal financing for those who are newly eligible from 2014 to 2016, and then the federal share phases down to 90 percent by 2020. But, as Alan Weil, executive director of the National Academy for State Health Policy (NASHP), pointed out on the same NPR program even if states don’t have to come up with much money, it still may be money they don’t have, and they worry about whether they can meet the increased demand.

NASHP has noted that “expanding coverage will increase demand for services which will strain the capacity of the health care system already under pressure. “The goals of health reform will not be met if the newly insured find that their coverage is a hollow promise.”

A CMS senior specialist informed me that “the Actuary projects that by fiscal yea 2017, the average Medicaid enrollee is expected to receive about $11,800 in health care benefits annually through Medicaid. Spending per person is projected to increase at an average rate of 6.7 per year through fiscal yea 2017.” This means, at that rate, the average enrollee by 2020 would receive $20,491 gratis. A Medicaid family of four, incidentally, in 2014 is to get about $40,000.

The Cato Institute just published a 52-page study, entitled “Bad Medicine,” explaining many of the costs and consequences of the Obamacare law. The author of the report, Senior Fellow Michael Tanner, writes that the refundable tax credits for the not-so-poor on Medicaid “are expected to total $449 billion between 2014 and 2020…with the credit calculated on a sliding scale” according to income to ease any payment for insurance. But a second credit provides a subsidy for a proportion of out-of-pocket costs. “The net effect of this rather complex formula is that a family” with $30,000 income getting an insurance policy costing $9,435 would get a subsidy of $8,481, and have to pay $947 themselves. “If the same family had an income of $65,000,” they would get a subsidy of $3,358 and pay $6,077 themselves. “As with many tax credits, the phase out of these benefits creates a high marginal tax penalty as wages increase.” Workers who increase their income “could actually see their after-tax income decline as the subsidies are reduced. This creates a perverse set of incentives that can act as a ‘poverty trap’ for low-wage workers.”

Cato Institute’s Tanner points out that childless men “will now be eligible for Medicaid.’ And they are a high-risk, high-cost health care population” Some are living with expensive treatment for AIDs. He recounts Tennessee’s experience when it expanded its Medicaid program to this segment of single men in its population. “Over the next 10 years, Medicaid costs in the other 49 states rose by 71 percent. In Tennessee, they increased by an overwhelming 149 percent. Despite this massive increase in spending, health outcomes did not improve.” The state’s governor called it “a disaster.” Just another example demonstrating that money can’t buy happiness and government money can often buy the opposite. With the Federal Poverty Level increasing each year and the sky-high potential cost of chronic illness and free long-term care for Medicare patients, future costs are necessarily incalculable.

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  • jbtrevor

    Alarming numbers! You missed one that is prevalent in Vermont and growing elsewhere across the country: paying for nursing home level of care in people's own home. If it were just that, perhaps it would be less costly however the 'care' also includes someone to clean your home, shop for groceries, do your laundry, etc.

  • Lfox328

    There may be a need for services for the truly indigent, however, I want to make sure. Any claimant on MY money needs to include in their application the tax returns of their nearest relatives – children, parents. Otherwise, we have more of the same scam that exists now, where patients "gift" their money early to their children, to qualify as "needy". Similarly, even adult children have to prove that their parents are incapable of helping them out, not just unwilling.

  • davarino

    Take care of yourselves folks. Stay in shape and take your vitamins cause it going to get nasty if you get sick. Its going to be long lines, and bandaides and asperin for your ailments. Ah the age of free stuff for everyone. No more responsibilities. Hell I think I will quit working.

  • Lori

    The Program will Only help those who Qualify. And the services they want you to perform and they will put more testing and medications on the people so they can make the buck! People than will live in A society of if you do not ask we will not tell you! Pretty sad when they throw all the paper work at A sick person who is about dead, sign here and sign there! People it is already happening! Sad thing Is once The Government has you it can tell you what you can do and not Do! And that is you take this Medication and you do this test and than we can decide if you are eligible. That is what they do to people on Disability now,And children who have disease,Broken lives. Sad but true.

  • seethesource

    What is the problem with calling medicaid what it is? It is WELFARE, period. I prepaid to get my medicare and still have to pay for Part B and my own supplemental medical policy.
    Medicare and medicaid should not be used in the same sentence.

  • Gerald

    The Muslims are exempt from taking out any kind of insurance on religious grounds. Who then pays for their medical costs? The Muslim community breeds like rats.