An interesting piece, “The Health Policy Election,” found in the latest Journal of the American Medical Association (JAMA), highlights the differences between the Romney and Obama visions for health policy spending for the next two decades in a simple chart. Its authors assert that “voters have a real choice in November” regarding health policy.
I’ll assume for a moment that the provisions of the Affordable Care Act are well known: insurance reforms, coverage expansion, premium assistance, and Medicaid expansion. The authors state:
Romney's proposals generally favor spending reductions, withdrawing federal support for private insurance expansion, drastically reducing Medicaid spending, eliminating Medicare coverage for 65- and 66-year-olds, and restructuring Medicare into a defined contribution program for those currently younger than 55 years. These are major differences and will have enormous effects on all facets of the health system and the number of uninsured, as well as federal costs.
In light of figures demonstrating that health-related spending has become a major driver of federal spending, Romney’s plan would maintain Medicare spending at a level comparable to that envisioned under the Administration’s projections (rising from about 3.25 to 3.75 percent of GDP by 2023) but fix the federal share of beneficiary support and shift the management of rising costs to the private market, leaving beneficiaries to spend their federal premium support among competing private insurance programs.
What’s of greater concern to community behavioral health providers in the Romney plan is its objective of reducing projected Medicaid spending from a current 2% of GDP to a projected 1.5% of GDP by 2023. This would be accomplished by cancelling the Medicaid expansion entirely and holding Medicaid spending to, essentially, 2009 levels. The Romney plan would block grant the funds to states and lift most Medicaid regulations, leaving states to develop, fund, and create their own cost-saving innovations.
Not a pretty picture for community health and behavioral health advocates, is it? But then, you already know that.
The big problem: Costs are shifted, not saved
The big problem with all of Romney’s proposed Medicaid savings—and with any other plan that proposes such “savings”— is that they would only accelerate the current problem of “cost shifting” by hospitals for the rising costs of indigent care.
A 1986 federal law (the Emergency Medical Treatment and Active Labor Act, or EMTALA) requires many hospitals to provide emergency care to the uninsured and indigent. But Bruce Bartlett, a former Reagan and Bush (41) policymaker, asserts in a New York Times piece that EMTALA is hardly a substitute for healthcare reforms and expanded health insurance. He states that, with EMTALA, “all that is happening is a shifting of the cost of caring for such people. To a large extent, they end up being paid by the insured through higher medical bills and insurance premiums.” He says that, in New York, there is a 9 percent surcharge on all hospital bills to cover the cost of caring for indigents.