Wonkbook: Debt negotiators focusing on Medicaid

By Ezra Klein

This is what a lot of health-care advocates were afraid of. Social Security has, to the surprise of many, been untouchable in this year’s various deficit talks and plans. Republicans reached out to touch the third rail of Medicare and got zapped. But Medicaid? Well, the program primarily serves the very young, the very poor and the very disabled. Those aren’t constituencies known for meting out iron-fisted vengeance at the ballot box. And sure enough, Janet Hook and Janet Adamy are reporting that “officials familiar with the talks in both parties say they expect Medicaid to be the biggest source of cuts in federal entitlement programs in whatever compromise emerges.”

That could mean Medicaid is coming in for very large cuts or it could mean Medicare and Social Security is are coming in for very small ones. Either way, the focus on Medicaid is perverse. Medicaid is a much more precisely targeted program than Social Security and Medicare. It’s used by primarily by people without the means or the agency to pursue other forms of coverage. Social Security and Medicare, conversely, serve millions of beneficiaries who hardly notice the programs, and don’t need them.

It’s also much cheaper, per-beneficiary, than Medicare or private insurance. Indeed, it’s probably too cheap. The New York Times today writes up a study in which researchers called doctor’s offices looking for non-emergency appointments for children with Medicaid and with private insurance. Two-thirds of the kids with Medicaid were turned away. Only a tenth of the kids with private insurance were denied appointments. Cut further and children will either wait longer, or go without coverage altogether. Is that really the right way to start addressing entitlements?

Gene Sperling, the director of the White House’s National Economic Council, has assured reporters that the administration wants to avoid “asking those who are most unfortunate or those with the least economic and political power to take the overwhelming bulk of this sacrifice.” Moreover, the administration has to protect Medicaid because about half of the Affordable Care Act’s coverage expansion is routed through the program. But it’s hard to square that with these reports, or with the Democrats full-throated defense of Medicare and relative silence on Medicaid. “The safer Medicare is, the more endangered Medicaid is,” Sen. Jay Rockefeller told me last week. “Reading the tea leaves and being in a lot of meetings over the last couple of days, I worry that people are saying, ‘great, now we can really cut into Medicaid.’”


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