Wednesday, June 29

Liberal proposal to cut growth in Medicaid costs!

In The American Prospect, Matthew Yglesias examines a recent NYTimes article on efforts to restrain the growth in the cost of Medicaid. The Times story claims the most rapidly growing Medicaid cost is for long-term care for middle-class elderly people, and it notes that the current rules encourage people who aren't really poor to hide assets in order to qualify for coverage. Yglesias concludes that "The most respectable way to restrain spending, then, is to rejigger the eligibility rules to make this harder to do."

Wow, a liberal who wants to tighten rules to reduce health costs? What's wrong with this picture? Yes, I did notice that what he literally wrote was to "rejigger the eligibility rules," which could mean almost anything. But OTOH he does add " make this [hiding assets] harder to do," which at least *sounds* like he wants to reduce costs. But this is Yglesias--a hard-left lib. There's got to be a catch.

And sure enough, reading a bit farther reveals it, as he goes on to explain what he (and other liberals) really recommend:
From the liberal point of view this is one big reason why we prefer universal programs to means-tested ones. Means tests have dynamic impacts on behavior, create perverse incentives, and then lead to this kind of arms race between clever families and legislators to determine who does and does not get coverage. Providing a long-term care benefit for everyone would be expensive, but it would be an expense incurred in order to provide people with a valuable service, and would eliminate this sort of distorting impact on people's behavior.

At least he admits that providing long-term care for everyone "would be expensive." (Gee, ya think?) Could that be one of the main reasons we haven't already done it?

So let me see if I'm finally understanding the Lib/Yglesias position:
1) Medicaid costs are skyrocketing, and apparently the "most rapidly growing" factor is long-term care for middle-class elderly;

2) At present, elegibility for coverage is means-tested, which provides an incentive to middle-class elderly to hide assets to qualify for taxpayer-funded care;

3) And the Lib/Dem "solution" is...let's expand Medicaid to cover everyone! This would remove any incentive to hide assets. (Yglesias appears to recognize that setting up rules for getting taxpayer money spurs people to do lots of weird things to get some--what he calls "dynamic impacts on behavior").
But wasn't his original complaint that Medicaid costs were growing too fast?

So wouldn't the action advocated by liberals (at least as represented here by Yglesias) make the problem he headlined worse instead of better?

Just askin'.


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12:19 AM  

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