Editor’s note: This commentary is by Peter Sterling, of Montpelier, who is a longtime advocate for the creation of an affordable and universal publicly funded health care system.
[T]o paraphrase Mark Twain, tales of Medicaid’s demise have been greatly exaggerated.
Recent news reports tell us that the state will have to find $38 million to cover a deficit in Medicaid costs this year and another $58 million next year. Not surprisingly, some suggested immediately that Medicaid benefits should be cut to solve this deficit. This is an ill-advised course of action which would have bitter and lasting consequences for tens of thousands of our most vulnerable neighbors, family members and co-workers.
Medicaid has been one of the country’s most successful safety-net programs since it was created in the 1960s. As one of President Johnson’s Great Society reforms, Medicaid provides low- and no-cost health care to the poorest amongst us. In Vermont, that translates to a family of four living on less than $33,000 a year.
A closer look at this year’s deficit shows that almost half is a result of one-time expenses plus ongoing fixed state liabilities for Medicare (which provides affordable health care to senior citizens) paid to the federal government out of Medicaid’s budget.
Only about $5.4 million of the deficit is actually attributable to more adults becoming eligible for Medicaid under President Obama’s Affordable Care Act, many of whom were previously uninsured because they couldn’t afford private insurance. And let’s be clear: A deficit of $38 million is a lot of money, but it represents just a little more than 2.5 percent of Medicaid’s total cost of $1.5 billion.
Just one penny on sugary drinks like soda, sports drinks and sweetened teas would raise upwards of $35 million a year.
These hardly seem like structural reasons to hack away at a program that has been one of our nation’s most successful initiatives providing relief to the poorest among us.
There are fair and sustainable ways to raise revenue across the state to help people who can’t live without Medicaid, and to keep from exacerbating the cost shift to private insurance. Here’s an idea and one that had wide support in the Vermont House last year. Pass a penny an ounce tax on sugary drinks. Just one penny on sugary drinks like soda, sports drinks and sweetened teas would raise upwards of $35 million a year. It would also have the added benefit of curbing obesity, which is the number one driver of increased health care costs.
This is precisely the kind of proposal we should be exploring and debating, and there are others, I’m sure, that would allow Vermont to continue to be the kind of place we can take pride in.
Helping poor people who are sick, disabled, and elderly get health care when they need it is not just the right thing to do, it’s a wise investment of public dollars.
Cutting benefits or raising out-of-pocket costs for Medicaid recipients will lead many to drop the program. Those that do will still get sick and have no choice, like the rest of us, but to seek medical care. If they can’t pay those bills, they can be burdened for years by medical debt. For those with private insurance, the uncompensated costs of treating former Medicaid recipients who become uninsured will be shifted to our and our employers’ premium contributions. Nobody wins.
The people who are the first to call for cuts to social programs like Medicaid are too often the people who don’t need them, who have never been in a situation where they have to choose between feeding their families or paying for heat and going to the doctor. No one should have to face that choice. Let’s make sure no one in Vermont has to.
