Monday, June 05, 2006

Bush to Cut Health Care Costs in Short Run by Denying Medicaid to American Citizens

Dear President Bush,

In addition to the 65,000 projected to fall off the rolls from Medicaid premium sharing provisions, how many more American citizens will be dropped should they not have a passport or birth certificate come July 1? The law you signed in February requires anyone receiving Medicaid benefits to prove their citizenship. The problem is millions of Americans don’t have such proof, as 5.7% of the adults surveyed lack the required documentation.

Are people who qualify for Medicaid more likely than the general population to not have a birth certificate or passport? The good news for fiscal conservatives is many more people would be shed from the rolls, saving both states and the federal government significant chunks of money.

Hospitals would be hurt if large numbers of previously insured poor become self pay. Your signature health care strategy, high deductible health plans, turns the private insurance plan virtually into a self pay account until the large deductible is met. Health care providers get hit from two directions with growing patient responsibility.

While the scandalous number of uninsured continues to soar courtesy of American employers, the federal government’s Medicaid plans is the follow up punch for local non profit community hospitals. When hospitals get squeezed financially what do they do? They cut costs by firing people and raise prices. How will a recession in healthcare impact the overall economy? Health care services power 16-18% of the American economic engine. With one or two cylinders misfiring what will happen? More unemployed combined with rapid inflation in such a large sector sounds dangerous to me.

Your plans ensure hospital revenue previously covered by an employer or government source will decrease. Self pay accounts will skyrocket as patients become responsible for their medical bills. Studies show these people will go without care. This will be on your and Congress’ shoulders, despite your best efforts to brush it off as efficiencies.

Have you told the public about Republican efforts to turn their non profit community hospitals into tax paying institutions? Should Senator Grassley get his way, the IRS will come down as hard on community hospitals as it did on credit counseling agencies. What will that do to a struggling non profit hospital, having to pay taxes while already reeling from carrying the enormous weight of unpaid bills and the burden of providing care to all who come?

Do you know why Senator Grassley is pushing the IRS to hound community hospitals? It is because for profit hospitals think the non profits have an unfair advantage. Their trade group, the Federation of American Hospitals made significant key donations to members of the Senate Finance Committee and House Ways & Means committee during the last two election cycles.

Sen. Grassley happens to chair the Finance Committee and is the beneficiary of FAH contributions. What a coincidence! The greater pig at the for-profit money trough is his counterpart in the House, Rep. Bill Thomas. He happens to be retiring and just in time. The history of donations and preferential hearings could lead the FBI to his door to see if there were any incriminating e-mails!

My guess is the for-profits want access to some of those government healthcare funds currently limited to non profit hospitals and community health centers. By blurring the distinction between the two groups, the money trough can be opened to all comers, regardless of tax status. In the Republican future, any health care organization can apply for funding. The myth goes like this. Those with a profit incentive are known to be more efficient, so it would be a better use of the taxpayers’ money. We saw that myth busted right after Katrina where layers of contractors cost the government more money, as each had its profit requirement.

My Karnak scenario is this. Medicaid enrollment is reduced by several million people, safety net hospitals are stressed to the breaking point, many uncovered low income people go without health care, and you get to brag about the money you saved while your for-profit hospital friends pat you on the back celebrating their record earnings.

The best news is poor people don’t vote unless they are really pissed off. How many will feel too bad health wise to turn out in November? And how many won’t have that birth certificate or passport required to vote? That is next, isn’t it?

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