MEDICAID CUTS: One way or another, everyone is affected

By Sherman Thompson Parker

09/22/2005

Contrary to certain stereotypes, most of those without health insurance have a high school diploma, were born in this country and are employed in a low wage job for an employer currently not providing health insurance. In other words, it is not only pregnant single mothers, children, the elderly and the disabled, but, rather, our state's working poor who are left without support if health problems strike.

None of us is immune to the social and economic impact of creating a class of fellow citizens who lack the ability to fulfill basic needs. In Missouri, some 700,000 people lack health insurance. With the state's recent $145 million in cuts to Medicaid, Missouri will lose an additional $235 million in federal matching funds. Instead of being spent here, that money now will be directed to other states such as Massachusetts, New York, California and our neighbor to the east, Illinois.

Medicaid and the state's Children's Health Insurance Program, known as CHIPs, have played a pivotal role in keeping down the number of uninsured Americans, but that will soon change. Missouri's Medicaid cuts are creating more uninsured people, and when they need medical care, they'll be forced to seek it at hospital emergency rooms - a very expensive proposition. In fulfilling their ethical responsibility to provide a minimum level of care, regardless of a person's ability to pay, the hospitals will have no alternative but to build these losses into their cost base, which in turn leads to higher premiums for individuals and businesses paying for private health insurance.

From our high school economics classes, we all remember the rule that these burdens are passed on with a multiplier effect, which compounds the burden at each transitional stage. The result is that we end up paying more than what the original costs would have been, and then on top of that, we see an inflationary effect on insurance premiums, goods and services.

In other words, increasing the number of uninsured people is equivalent to levying a hidden tax on our people and our economy.

Small businesses, corporations, middle-class consumers and the working poor who have health insurance cannot afford this hidden tax and the inflationary pressure on prices it generates. It is evidence of a broken health care system that is neither efficient nor responsive to the needs of the community.

I believe my colleagues in the Missouri Legislature had the best intentions when they approved the cuts in Medicaid benefits. Creating a commission to study the program and recommend reforms is a good first step - but I believe it should have been done before enacting Medicaid cuts, not after.

Instead, we now are forced to tell many Missouri citizens that the safety net they relied on for basic health care no longer exists. One such person is a woman from North St. Louis I'll call Madeline. She's 76 years old, and I've known her all my life. She is a pillar of her community who has worked hard, paid her taxes and raised three children as a single mother. Madeline, who relies on a $1,000 Social Security check each month for income, recently had a serious stroke that forced her to turn to Medicaid for life-sustaining assistance. The new spend-down provisions of the state's Medicaid cuts now force her to choose between paying for health care, groceries, utilities or rent.

It's our job to protect all who pay taxes by fighting poverty in Missouri. I know we can do better than passing the buck. For example, we can explore ways to encourage employers to make affordable private health insurance more widely available. We can cooperate with the federal government to try to control skyrocketing health care costs. We can help local health care providers better coordinate services for the poor and uninsured. And we should consider such options as health savings accounts, association health plans and insurance reform.

It won't be easy. Fixing a broken health care system will take a great deal of time, effort and ingenuity. But how many things in life are more important?



Sherman Thompson Parker, a Republican who represents parts of St. Charles County in the Missouri House of Representatives, is a regular contributor to the Commentary page.

E-mail: Sherman.Parker@house.mo.gov