GUEST COLUMN: When Medicaid Block Grants and Medicare-for-All Collide

In Def Leppard’s classic, “When Love and Hate Collide,” an immortally despondent Joe Elliott croons an enduring question, “do you have a heart of stone?”  The answer for those who croon and crow about the virtues of Medicaid block grants the answer may be, “yes.”  But have you thought about how some of the same notions could be pinned on Medicare-for-All?

In a recent op-ed, former Governor John Kitzhaber, MD argues that while the Administration’s Block Grant guidance could “save money” as a matter of formal budgeting, such savings would only create higher costs within the system and lead to worse health outcomes.  He notes that the proposal is “a misguided policy that will not save money, expand access or improve the health of those who depend on this program for medical care. Block grants are a meat ax approach to reducing the cost of the Medicaid program to the federal government while doing nothing to reduce the total cost of the care being delivered in the program.”

And it is that high total cost of care and the poor health outcomes resulting from that spending within the entire health care system (not just Medicaid) that creates the link to Medicare for All.  While Medicare-for-All generally addresses who is paying for health care and could likely yield one time savings as an administrative matter, it does not address the high cost and low value of our system and thus, we believe, would lead to significantly higher costs and lower value over time.

Kitzhaber notes, “[h]ealth care is the only economic sector that produces goods and services that none of its customers can afford. This system only works because the cost of medical care for individuals is heavily subsidized — increasingly with public resources — either directly through public programs like Medicare and Medicaid; or indirectly through the tax exclusion for employer‐sponsored health insurance; as well as the public subsidies for those purchasing insurance through the Affordable Care Act exchanges.”

The bottom line is that until we stop merely discussing who pays and shift to policies aimed at improving what we get for the money, we are just shifting deck chairs, so to speak, creating giant opportunity costs, and becoming less healthy.  We believe there is a pathway forward, and 2020 candidates should take note.

*BTW, who remembers that Def Leppard and Tay-Tay did an episode of “Crossroads” together?  Boom.

Guest column by Scott Nelson. Nelson is an attorney at the law firm of K&L Gates LLP  and a former staffer to U.S. Senator Byron Dorgan who fears a loss of humor in American life.

Tyler Axness
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