- Comment Policy
- Contact Us
By Joy Schulman
MEDICAID/MEDICARE—it’s all so confusing! What are we talking about??
Recently, Medicare and Medicaid have often been used interchangeably; though they are quite different and historically have been treated as such by the political class.
So let’s clarify: Medicare is the health program for citizens over age 65; or those who are on Social Security Disability because they are no longer able to work. There are no income or asset limitations to being on Medicare. It is a universal entitlement with no stigma attached. It is 100% federally-funded. Those federal funds come partially from mandatory payroll deductions. If you have worked 40 quarters and are eligible for Social Security, or are the spouse of someone eligible for Social Security, at age 65 you will automatically receive benefits. Because of its funding source, Medicare has not been a victim of state budget reductions. Furthermore, though not without complaint about the reimbursement rates, the vast majority of doctors do accept Medicare as payment for services.
In contrast, Medicaid is health insurance for the poor. It has strict limitations on income and assets. Being a Medicaid patient carries a stigma. The reimbursement rates for doctors are so low that many doctors do not accept it, forcing recipients to go to health clinics rather than developing an ongoing relationship with a primary care physician. Medicaid is funded by a combination of federal and state funding, so it always features in state budget battles. Because of the federal contribution there are federal standards and, if any state wants to go below them, they must apply for a federal waiver.
A lesser-known program of Medicaid, although one that uses almost 50 percent of its funding, is Medicaid for individuals in nursing homes. Nursing homes costs a private pay patient nearly $50,000 a year, so even well-resourced people run out of money in the first couple of years—Medicare does not pay for long term care. When an elderly patient has only $1500 in assets, Medicaid takes over payments. About 80 percent of people in nursing homes are on Medicaid. Most nursing homes accept this insurance because of these statistics, and there is not the same stigma attached to Medicaid for nursing home residents. The elderly, who have run out of money, are seen as more deserving and, of course, Medicaid is supporting the whole nursing home industry. This piece is NOT about Medicaid for nursing home residents. It is about Medicaid for the poor. The poor are who New Jersey Governor Christopher Christie is attacking.
The new eligibility standards for Medicaid have come out as part of the proposed state budget and, in fact, would save the state $9 million. However, this proposed plan also forces the state to give up $17 million in matching federal funds. To be more specific about the proposal—this eligibility is for new enrollees and adults only.
Adults already on Medicaid, under an old standard will not lose their benefits; and N.J. children, between Medicaid and Children’s Health Insurance Program, can receive health insurance benefits up to 350 percent of the poverty level or $64,000 for a family of three. Governor Christie has not proposed to reduce children’s benefits. The federal government pays for about 75 percent of the children’s benefits, but clearly that’s not the clear rational since Christie is willing to give up $17 million of federal funds as a consequence of reducing benefits for adults. The Governor’s plan fixes eligibility levels for new adults at less than 30 percent of the poverty level, which is $5,317 for a family of three. Presently, eligibility benefits for such a family are $24, 645, which is 133 percent of the poverty level. To make such a drastic cut a federal waiver is required. It has not yet been requested; yet, will be in July if the state approves these draconian eligibility guidelines.
This is not the first year of Medicaid cuts under the Christie administration. Last year, the adult eligibility for enrollment went from 200 percent of the poverty level, $36,620 for a family of three, to 133 percent. And last year, for the first time in the history of the program in the state, adult legal immigrants were made ineligible for Medicaid. Undocumented immigrants have always been ineligible. The policy change regarding immigrants resulted in the denial of coverage for 8,000 adults; and between last year’s changes and those proposed, it is estimated that 93,000 adults will be denied health insurance, and that denial will affect the enrollment of 18,000 eligible children.
The Patient Protection & Affordable Care Act signed into law on March 23, 2010 by President Barak Obama, and which goes into effect in 2014, takes things in the opposite direction—making insurance available and subsidized for the majority of the 1.3 million uninsured adults in N.J.. The end result of Governor Christie’s plans to only cover children by Medicaid.
So what can we say are the reasons for these cuts? We cannot deny they save the state money, though that money will be much less than projected when sick, uninsured adults show up to emergency rooms with advanced diseases resulting from not seeing a doctor in a timely fashion; and N.J.’s completely state-funded charity care is billed at emergency room, rather than doctor office, rates. The cuts hurt poor adults all over the state of N.J., but will hurt most the adults in the poor urban areas of Essex and Hudson Counties, where the votes swing to Democrats. Is that why the Governor supports this plan? Does Governor Christie want to purposely get into a fight with the federal government over a waiver to make himself a hero to the Republican Party? Does this policy express a philosophy that only children and the elderly deserve government help? So adults of working age, though they are the parents of these children, should not be given any assistance? And immigrants, though they are in this country legally, should not be helped?
These thoughts are only my speculation. What is not speculation: New Jersey is the richest state in the nation attempting to deny its poorest residents a most basic need.
A note on sources: The data and data analysis in this article came from N.J. Policy Perspective, a think tank created in 1997 to rigorously analyze the human consequences of social policy. They are located in Trenton, N.J. and are part of the Economic Analysis Research Network and the State Fiscal Analysis Initiative. They can be found online at www.N.J.PP.org. The political opinions, and any mistakes in analysis, are mine alone. JS
Joy Schulman is a long time labor and civil rights activist. Her activism began as a student in Rutgers, Newark, in 1967, organizing against the Vietnam War and for open admissions for African-American students because of under-representation due to discrimination. She was a leader in the anti-Vietnam War movement at UW Madison from 1969 to 1971. She lived in Milwaukee, Wisconsin from 1971 to 1987, during which time she was staff for Welfare Rights Organization; Milwaukee Public Schools Human Resources Department in support of the De-Segregation Order; District 1199W Health Care Workers Union; and, as a benefit specialist for Legal Action of Wisconsin.
She moved back to New Jersey in 1987 and continued activism around school equity by being on the school board in Highland Park and as a statewide activist for progressive school funding. Joy was staff for CWA representing New Jersey public workers for 11 years. From 2002 to 2005 attended CUNY law school, interned at the Education Law Center in Newark, N.J. and worked as Legislative coordinator for United for Peace and Justice.