Bevin should use Medicaid to build a healthier workforce, not to belittle low-wage workers

Angie Patton, health and wellness director at Laurel Grocery Co., and CEO Winston Griffin in the on-site primary-care clinic that is saving the London company money on health care while increasing productivity.
Angie Patton, health and wellness director at Laurel Grocery Co., and CEO Winston Griffin in the on-site primary-care clinic that is saving the London company money on health care while increasing productivity. Bill Estep

It’s hard to find a more complicated thicket than health care finances, yet there are some clear truths: We all end up paying for each others’ health care. The best way to control costs is to prevent disease and expensive medical crises.

With that in mind, dividing Kentuckians covered by taxpayer-funded Medicaid from those covered by taxpayer-subsidized private health insurance, as a Bevin administration spokeswoman seemed to do last week, sheds no light. It does stigmatize as “dependent” people who toil for low wages with only Medicaid to keep them healthy.

In the view of the Bevin administration, which is seeking to erect new obstacles to Medicaid coverage, the dramatic decline in uninsured Kentuckians does not count because 440,000 of our neighbors gained access to preventive care through expansion of the federal-state Medicaid program.

As 31 states have now done, Gov. Steve Beshear used the Affordable Care Act to expand Medicaid eligibility to people making up to 138 percent of the poverty level (that’s $16,394 a year for a childless adult). Kentucky’s uninsured rate for the non-elderly fell from 18.8 percent in 2013 to 6.8 percent in 2015, one of the largest drops in the country, according to the Kaiser Commission on Medicaid and the Uninsured.

Last week, a Bevin administration spokeswoman told The Courier-Journal: “There has not been a historic drop in uninsured — this is misleading” and that “Medicaid is not health insurance — it is a benefit program like SNAP (food stamps) or TANF (Temporary Assistance for Needy Families). ... What we have seen is a historic rise in people on taxpayer-funded Medicaid.”

The implication is that people who enroll in Medicaid because their employers don’t provide health insurance or they can’t afford it are sponging off taxpayers, while people who have private insurance through their employers or individual policies are pulling their own weight.

In fact, the federal government heavily subsidizes private health insurance through tax deductions. The largest break in the entire tax code is the $250 billion annual exclusion of employer-paid health insurance premiums from income and payroll taxes, reports the Tax Policy Center. Workers pay federal taxes on their wages and salaries but not on health care benefits that are part of their compensation. Because this break reduces taxable income, it’s worth more to higher earners.

Among government expenditures for health care, only Medicare and Medicaid exceed the tax deduction for employer-sponsored health plans. Health care premiums paid by self-employed people and other individuals also may be deductible.

In addition to taxpayer subsidies and funding for programs like Medicare and Medicaid, we also pay for each others’ health care when hospitals charge more to make up for losses from patients who cannot pay. Kentucky hospitals have enjoyed a steep decline in uncompensated care since the Medicaid expansion, while emergency room misuse is showing signs of decline as more people gain primary care. The state has along way to go, but trends are encouraging.

Gov. Matt Bevin’s goal of using taxpayer subsidies to move people from Medicaid into employer-sponsored plans is probably unrealistic because many low-wage employers offer no health coverage. The governor also wants Medicaid recipients, even those earning less than $11,000 a year, to pay premiums or co-pays, although research shows they will opt to go without preventive care and medicines.

Look only to London (the Laurel County seat, not the British capital) for a better model. The Laurel Grocery Co., a wholesaler operating in nine states, is saving money and increasing productivity not, as Bevin proposes, by making its 250 employees pay more, but by making primary care more accessible. A workplace clinic and free generic prescription drugs, such as blood pressure and diabetes meds, are producing a healthier workforce.

Rather than trying to save money by excluding people, Bevin should leverage Medicaid to produce a healthier workforce. For every $1 the state spends on the Medicaid expansion, the federal government will kick in $9 to help one of the poorest, sickest states get healthier.

The administration, which has pushed back its self-imposed Aug. 1 deadline for finalizing its Medicaid proposal to make adjustments in response to public feedback, should keep in mind what Laurel Grocery CEO Winston Griffin says: “We’re all in this together.”