Reduce Nursing Home Populations to Limit Coronavirus’ Spread

Why have so many nursing home patients died from coronavirus nationwide? The key to answering that question lies in many of the nation’s leading politicians’ policy responses to the pandemic. Most notably, Gov. Andrew Cuomo (D-N.Y.) issued an ill-conceived order requiring nursing homes to accept COVID-positive patients.

Forcing institutions to accept positive patients “seeded” coronavirus in nursing homes, where it spread like wildfire. Although Cuomo eventually rescinded that measure, the decision was too late to save the thousands of nursing home patients who died before it could undo the damage initially wrought. Last Thursday, in a display of callous indifference to the loved ones of deceased patients desperate for answers, Cuomo called the focus on his order a “shiny object” and “pure politics.”

But the high death toll in nursing homes also reflects underlying policy differences that preceded coronavirus: Some states house more individuals in nursing homes than others. These disparities, coupled with the inherent infection risk present in nursing homes, should provide states new motivation to accelerate the movement of seniors and individuals with disabilities out of institutional facilities wherever and wherever possible.

Differences Among States

As of 2017, more certified nursing facilities operated in Florida than in New York. But the larger average size of New York’s facilities means the state has nearly 35 percent more nursing home beds than Florida — even though Florida has 35 percent more seniors older than age 65 than New York does. New York’s nursing homes average 185.1 beds per facility, the highest in the country by far. With a larger nursing home population and larger facilities, the virus had more room to rampage than in other states with smaller facilities and smaller nursing home populations.

During the past several weeks, the growing death toll in nursing homes prompted state and federal officials to surge resources to facilities, from testing to personal protective equipment to infection control specialists. But policymakers should ask a more fundamental question: Why do we still have so many individuals in nursing homes at all? The spread of COVID is likely reduced by home-based care while providing an environment most patients prefer, and often at lower costs than nursing homes.

Over the past several decades, Congress and states have begun to redirect Medicaid spending from institutional care towards home and community-based services. From 1988 to 2016, the percentage of Medicaid long-term care spending directed toward home-based services grew from 10 percent to 57 percent.

But in some states, the powerful nursing home lobby still thwarts policy efforts that would empty facility beds. As of 2016, for one example, New York spent more on institutional care than Florida and California did combined.

A Better Solution

By contrast, Rhode Island’s global compact, approved in January 2009, consolidated myriad Medicaid waivers into a single effort increasing access to home-based care. The state’s experiment succeeded: The number of individuals receiving institutional care declined 6.2 percent, while those receiving community-based care rose by 25.8 percent. Rhode Island’s rebalancing towards community-based care helped keep overall Medicaid spending flat during a time of enrollment growth, and did so by increasing access to care, not limiting it.

States like Rhode Island that have moved individuals needing long-term care out of nursing homes wherever possible have the potential to see fewer incidents of mass deaths. Indeed, vulnerable populations will still need to take precautions to avoid COVID regardless. But moving seniors out of congregate settings like nursing homes would minimize the risk of a “super-spreader” incident in which a single individual infects dozens or even hundreds of patients.

Congress Inhibits Reform

With its ability to reduce health-care spending and the risk of infection, the coronavirus pandemic should have given states added incentive to transition Medicaid beneficiaries into home-based care — had Congress not gotten in the way. Legislation passed in March giving states an increase in the federal Medicaid match conditioned the additional dollars on states not limiting benefits. As a result, more aggressive attempts by states to direct spending to community-based care — for instance, by capping nursing home slots, or requiring beneficiaries to try home-based care first — could jeopardize states’ additional federal matching funds.

When I served on the congressional Commission on Long-Term Care in 2013, one of my colleagues often said the next person who told him she wanted to enter a nursing home would be the first person to express such a desire. That adage holds as true today as it did seven years ago, and this truth should compel states to promote home and community-based care wherever possible at all times. During the coronavirus pandemic, however, such a transition won’t just give seniors better care in a way that saves health-care costs — it could save seniors’ lives.

This post was originally published at The Federalist.

Don’t Just Bail Out a Flawed Medicaid Program

In recent days, some observers have discussed the possibility of targeted assistance to state Medicaid programs affected by the coronavirus outbreak. Unfortunately, the legislation proposed by House Speaker Nancy Pelosi (D-CA) falls far short of that marker, providing a gusher of new spending with no long-term reforms to the program. Conservatives should insist on better.

The House’s bill, introduced late in the night Wednesday, contains several noteworthy flaws. By increasing the federal Medicaid match for all states by 8 percentage points for the entire public health emergency, it prevents the targeting of assistance to those states most affected by coronavirus cases.

Increasing the federal match for able-bodied adults to 98 percent encourages states to prioritize these individuals over disabled populations, while discouraging states from rooting out fraud. The legislation also precludes states from making any changes to their Medicaid programs for the duration of the bailout, reinstituting the fiscal straight-jacket contained in President Obama’s “stimulus” bill.

Like that 2009 package, Pelosi’s legislation proposes tens of billions in new spending for an already-sprawling Medicaid program without any structural changes. But if Pelosi or conservatives wish to pay for the short-term largesse via long-term changes to Medicaid, they need not look far: President Obama’s budgets included several proposals that, if enacted into law, would change incentives in Medicaid for the better.

One area ripe for reform: Medicaid provider taxes. Hospitals and other medical providers often support these taxes—the only entities that ever endorse new taxes on themselves—because they immediately come right back to the health care industry, after states use the tax revenue to draw down additional Medicaid matching funds. In 2011, none other than Joe Biden reportedly called this form of legalized money laundering a “scam.”

At minimum, Congress should immediately enact a moratorium on any new provider taxes, or any increases in existing provider taxes, cutting off the spigot of federal dollars via this budget gimmick. Lawmakers can echo President Obama’s February 2012 budget submission, which would have saved $21.8 billion by reducing states’ maximum provider tax rate.

That proposal delayed its effective date by three years, “giv[ing] states more time to plan”—which would in this case delay the changes until the coronavirus outbreak subsides. Another positive solution: Codifying the Trump administration’s Medicaid fiscal accountability rule, which includes welcome reforms reining in states’ most egregious accounting gimmicks, effective a future date.

More broadly, Congress should also consider the ways the existing matching rate formula encourages additional Medicaid spending by states. For instance, current law provides all states with a minimum 50 percent match rate, encouraging richer states to spend more on Medicaid. Absent that floor, 14 states—11 of them blue—would face a lower match; Connecticut’s rate would plummet from 50 percent to 11.69 percent.

Gradually lowering or eliminating the federal floor on the match rate, beginning 2-3 years hence, would discourage wealthier states from growing their Medicaid programs beyond their, and the federal government’s, control. Had lawmakers enacted this proposal as part of the 2009 “stimulus,” New York—which would have a federal match rate of 34.49 percent in the current fiscal year absent the 50 percent minimum—might have right-sized its Medicaid program well before the program’s current budget crunch.

Alternatively, Congress could embrace Obama’s budget proposal for a blended Medicaid matching rate. Replacing the current morass of varying federal match rates for different populations could save money, and eliminate the perverse incentives included in Obamacare, which gives states a higher match rate to cover able-bodied adults than individuals with disabilities.

Judging from her initial bid in the “stimulus” wars, Pelosi has taken Rahm Emanuel’s advice never to let a serious crisis go to waste. If she wishes to emulate Obama’s first chief of staff, conservatives should insist that she also enact some of the Medicaid changes proposed in Obama’s own budgets, to begin the process of reforming the program.

This post was originally published at The Federalist.

“Ponzi Pete” Buttigieg Proposes More Unsustainable Entitlements

On the campaign trail for the Democratic presidential nomination, South Bend Mayor Pete Buttigieg tries to portray himself as a moderate politician. By running ads against implementing a single-payer health system, Buttigieg would have voters believe he rejects the radical leftism of socialist Sen. Bernie Sanders.

Don’t you believe it. Buttigieg recently released an aging and retirement plan that proposed massive amounts of new entitlement spending, with very little in the way of specifics to pay for all his ideas. It’s but the latest example of Democrats’ government giveaway train run amok.

CLASS Act ‘Ponzi Scheme’

The first part of Buttigieg’s paper talks about an “historic” new program, Long-Term Care America. The mayor claims this plan would provide aid to seniors “who require assistance with two or more activities of daily living….Benefits would be worth $90 per day for as long as [seniors] need care, and kick in after an income-related waiting period.”

But Title VIII of Obamacare contained language establishing the Community Living Assistance Services and Supports (CLASS) program. Moderate Democrats attacked the proposal as unsustainable. Prior to Obamacare’s enactment, Sen. Kent Conrad (D-N.D.), then the chairman of the Senate Budget Committee, called CLASS a “Ponzi scheme of the first order, the kind of thing Bernie Madoff would have been proud of.” Those concerns ultimately proved correct, as the Obama administration had to shelve the program as unworkable before it ever collected a dime in premiums.

As a Senate staffer conducting oversight on CLASS, and later as a member of the Commission on Long-Term Care tasked with examining possible replacements, I examined the program’s failure in minute detail. But at bottom, the program suffered from the same problem facing the Obamacare exchanges: Too many sick people signing up for benefits, driving up premiums, and therefore driving away healthy individuals.

Obamacare required individuals to pay into the CLASS program for only five years to qualify for benefits. Actuaries believed that people would sign up, pay a few thousand dollars in premiums over five years, and then collect benefits totaling tens of thousands of dollars or more. Just as Obamacare’s pre-existing condition provisions have priced millions of people out of coverage—because individuals can sign up for “insurance” after they develop a pre-existing condition—so too would CLASS have attracted people already suffering from disabilities, who by definition don’t need insurance so much as they need care.

The exchanges have remained somewhat sustainable only because of massive amounts of federal spending on subsidies and bailouts. However, Obamacare forced CLASS to become self-sustaining, without relying on federally subsidized premiums or a bailout. The Obama administration in October 2011 conceded that it could not meet these statutory requirements, and therefore shelved the program. (Congress later repealed CLASS outright in the “fiscal cliff” deal in January 2013.)

Buttigieg’s plan acknowledges none of this history, and makes no mention of solvency or sustainability when talking about his proposed new program. Perhaps limiting it to only those over age 65, and imposing a waiting period for people to receive benefits, as his proposal outlines, will make it more financially sustainable (or less unsustainable). But Buttigieg also proposes a $90 daily benefit, 80 percent richer than the CLASS Act’s $50 per day benefit, exacerbating solvency concerns.

Costly Promises

Buttigieg’s promise of a long-term care benefit says nothing about whether this new federal spending would increase the deficit, your taxes, or both. In that respect, it represents but one of the many costly promises in his retirement plan, including:

  • An end to the two-year waiting period currently required for individuals receiving Social Security disability benefits to qualify for Medicare coverage;
  • An increase in the minimum wage to $15 an hour, and new staffing requirements for nursing homes, all of which will raise costs to the Medicaid program; and
  • An expansion of Social Security benefits—including a new minimum benefit and credit for caregivers—funded entirely by higher taxes on “the rich.”

At present, our federal government faces $23 trillion in debt, and trillion-dollar deficits as far as the eye can see. To put it bluntly, we can’t pay for the government we have now, let alone the new programs Buttigieg and his fellow presidential candidates have proposed.

Buttigieg can try to hide himself in the cloak of the “moderate” mantra all he likes. But his laundry lists of new and unsustainable entitlements represent nothing more than big-government liberalism.

UPDATE: This post was edited after publication, to clarify the nature of Buttigieg’s proposal as compared to Obamacare’s CLASS Act.

This post was originally published at The Federalist.

The Broken Promises of Louisiana’s Medicaid Expansion

Some in Louisiana want to claim that the state’s expansion of Medicaid to able-bodied adults represents a success story. The facts indicate otherwise. Medicaid expansion has resulted in large costs to taxpayers, significant amounts of waste, fraud, and abuse, and tens of thousands of able-bodied adults shifting from private coverage to government insurance—even while individuals with disabilities continue to wait for care. On issue after issue, Medicaid expansion has massively under-performed its sponsors’ own promises:

The Issue: Enrollment

The Claim: “The Department [of Health] had originally based its projections based on U.S. Census data that counted about 306,000 people as uninsured.” – New Orleans Times-Picayune[1]

The Facts:

  • Even though the Department of Health tried to increase its projected enrollment numbers as soon as it made its first estimate, the expansion population has soared well past even these higher claims.[2]
  • As of April 2019, 505,503 individuals had enrolled in Medicaid expansion—65.2% higher than the Department’s original estimate, and 12.3% higher than the Department’s revised enrollment estimate of 450,000 individuals.[3]
  • Medicaid enrollment has declined slightly since April 2019, but only because the Department of Health removed tens of thousands of ineligible individuals from the rolls that were receiving benefits they likely did not deserve.[4]
  • In the spring of 2019, the Department of Health commissioned several LSU researchers to project Medicaid enrollment in future years. The researchers concluded that participation in Medicaid expansion would bounce back from recent enrollment declines to reach an all-time high this year of 512,142 individuals. The researchers also concluded that Medicaid expansion enrollment would continue to increase in future years. Despite spending a total of $71,120 of federal and state taxpayer dollars on this report, the Department of Health has yet to release it publicly.[5]
  • The fact that the Department of Health cited Louisiana’s uninsured population as only 306,000, and yet enrollment has far exceeded that number, further demonstrates that Medicaid expansion has led residents to drop their private insurance to go on to the government rolls—and encouraged people who do not qualify for subsidized coverage to apply anyway.[6]

The Issue: Costs and Spending

The Claim: “In Fiscal Year 2017, Medicaid expansion saved Louisiana $199 million. Beginning July 1, 2017, these savings are expected to surpass $350 million.” – John Bel Edwards[7]

The Facts:

  • Louisiana’s Medicaid expansion has cost far more than expected, placing a higher burden on taxpayers.
  • In 2015, the Legislative Fiscal Office estimated that expansion would cost around $7.1 billion-$8 billion over five years, or approximately $1.2 billion-$1.4 billion per year.[8]
  • For the fiscal year ended June 30, 2019, Medicaid expansion cost taxpayers an estimated $3.1 billion—more than twice the Legislative Fiscal Office’s original estimates.[9]
  • Because most Louisiana residents also pay federal taxes, shifting spending from the state to the federal government does not “save” Louisianans money. Rather, it means Louisiana taxpayers will continue to pay for this skyrocketing spending, just through their federal tax payments instead of their state tax bills.

The Issue: Fraud

The Claim: “Louisiana Medicaid is tough on fraud….When it comes to getting tough on Medicaid fraud, Louisiana is among an elite group of states leading the way by doing the right thing.” – John Bel Edwards[10]

The Facts:

  • Because Louisiana rushed its way into Medicaid expansion without first building a proper eligibility system, the state has spent hundreds of millions of taxpayer dollars providing subsidized health insurance to ineligible individuals.
  • More than a year after Gov. Edwards made his claim about Medicaid fraud, the Legislative Auditor found that numerous individuals with incomes well above the maximum eligibility thresholds had applied for, and received, subsidized Medicaid benefits.[11] One household sampled in the audit claimed income of $145,146—more than Gov. Edwards’ annual salary of $130,000.[12]
  • Belatedly, the Department of Health finally removed approximately 30,000 ineligible individuals from the Medicaid rolls, including 1,672 individuals with incomes of over $100,000.[13]
  • The Medicaid program spent approximately $400 million less in the fiscal year ended June 30, 2019, in large part due to the disenrollments—suggesting that in prior years, Louisiana taxpayers had spent hundreds of millions per year providing subsidized health coverage to ineligible individuals.[14]

The Issue: Efficient Use of Taxpayer Dollars

The Claim: “I know that any misspent dollar is one that could have paid for health care services for those truly in need. My top priority is to ensure every dollar spent goes toward providing health care to people who need it most.” – Health Secretary Rebekah Gee[15]

The Facts:

  • Internal records indicate that Secretary Gee’s own Department knew that tens of thousands of individuals were dropping private coverage to enroll in government-run Medicaid—yet did little about it.
  • For much of 2016 and 2017, the Louisiana Department of Health compiled data indicating that several thousand individuals per month dropped their existing health coverage to enroll in Medicaid expansion.[16]
  • At the end of 2017, the Department of Health stopped compiling data on the number of people dropping private coverage, claiming the data were inaccurate. However, the Department’s stated reasoning for its action suggests that, to the extent the data were inaccurate, they likely under-estimated the number of people dropping private coverage to enroll in Medicaid.[17]
  • Based on the program’s average cost per enrollee, Medicaid has paid hundreds of millions of dollars per year subsidizing the coverage of people who previously had health insurance.[18] This spending comes over and above taxpayer dollars paid to cover individuals ineligible for benefits, as outlined above.

The Issue: Uncompensated Care

The Claim: “Disproportionate share payments to hospitals have decreased as the uninsured population decreased.” – Louisiana Department of Health[19]

The Facts:

  • Uncompensated care payments to hospitals have remained broadly flat since expansion took effect, and by some measures have actually increased.
  • During the three fiscal years prior to expansion, the state paid an average of $1,039,444,880 to Medicaid providers for uncompensated care—$1,011,324,118 in Fiscal Year 2014, $1,000,502,910 in Fiscal Year 2015, and $1,106,507,612 in Fiscal Year 2016.[20]
  • In the fiscal year ended on June 30, 2019, Medicaid spent an estimated $1,056,458,352 on uncompensated care payments—greater than the average spent on uncompensated care in the three years prior to expansion.[21]
  • The meager $50 million in uncompensated care savings between Fiscal Year 2016 and Fiscal Year 2019 does not even begin to match the more than $3.1 billion annual cost to taxpayers of expansion.[22]
  • Even if the Department of Health wants to claim the modest reduction in uncompensated care from Fiscal Year 2016 to Fiscal Year 2019 as “savings,” that means the Medicaid program is spending approximately $62.03 for every dollar it “saves” in uncompensated care payments.

The Issue: Jobs

The Claim: “An analysis by LSU estimates that Medicaid expansion created more than 19,000 jobs and generated $3.5 billion in economic activity in 2017 alone.” – Health Secretary Rebekah Gee[23]

The Facts:

  • Since Medicaid expansion took effect in July 2016, Louisiana’s economy has created only 2,700 jobs—less than one-seventh of the jobs the LSU study claimed expansion would create.
  • In June 2016, the month before expansion took effect, Louisiana’s non-farm payrolls totaled 1,979,100.[24] According to federal data, as of July 2019 Louisiana’s non-farm payrolls now stand at 1,981,800—a meager increase over more than three years.[25]
  • One year before expansion took effect, in July 2015, Louisiana had nearly 10,000 more jobs (1,991,500) than it does today (1,981,800).[26]
  • Since Medicaid expansion took effect, the total labor force within the state has declined by more than 65,000 individuals, or more than 3%—from 2,161,299 in June 2016 to 2,095,844 today.[27]
  • Within days of the LSU report’s release in April 2018, the Pelican Institute published a rebuttal demonstrating that the LSU researchers likely omitted key facts in their calculations, which meant the study made inaccurate and inflated claims about the fiscal impact of Medicaid expansion.[28]
  • Following an exhaustive series of public records requests with LSU, the university finally admitted that the researchers did indeed omit a key data source from their calculations, leading to inflated claims in their study.[29] While the researchers conceded in one document that their 2018 report “overstate[d] the economic impact of” Medicaid expansion, they have yet to admit this error publicly, and the Department of Health has refused to release the document in which they admitted their error.[30]

The Issue: Vulnerable Individuals Waiting for Care

The Claim: “It’s inconvenient that the facts don’t follow this story. [The Department of Health] ended the wait list for disabilities last year in partnership with the disability community. #Fakenews.” – Health Secretary Rebekah Gee[31]

The Facts:

  • While the Department of Health may have changed the name from a “waiting list” to a “Request for Services Registry,” nearly 15,000 vulnerable individuals continue to wait for access to care.
  • The Department of Health’s own website regarding waiver services includes the following passage: “Waiver services are dependent upon funding, and are offered on a first-come, first-served basis through the Request for Services Registry.”[32] The reference to “first-come, first-served” consideration for waiver applicants clearly indicates that vulnerable individuals continue to wait for care.
  • According to information provided by the Department of Health in response to a public records request, as of May 2019 a total of 14,984 individuals were on the “Request for Services Registry.”[33]
  • Since Medicaid expansion took effect in Louisiana, at least 5,534 individuals with disabilities have died while on waiting lists to access care—more than one-quarter of the at least 21,904 individuals with disabilities nationwide who have died while waiting for services under Medicaid expansion.[34]
  • By giving states a greater federal matching rate to cover able-bodied adults than individuals with disabilities, Obamacare has encouraged state Medicaid programs to discriminate against the most vulnerable individuals in our society.[35]

Medicaid expansion has singularly failed to its advocates’ own promises of success. Louisiana should begin the process of unwinding this failed experiment, and put into practice reforms that can reduce the cost of care for beneficiaries, while focusing Medicaid on the vulnerable populations for which it was originally designed.[36]

 

[1] Kevin Litten, “Louisiana’s Medicaid Expansion Enrollment Could Grow to 450,000,” New Orleans Times-Picayune January 20, 2016, https://www.nola.com/politics/2016/01/medicaid_expansion_500000.html.

[2] Ibid.

[3] Healthy Louisiana Dashboard, http://www.ldh.la.gov/HealthyLaDashboard/; Kevin Litten, “Louisiana’s Medicaid Expansion Enrollment.”

[4] Sheridan Wall, “GOP Legislators Renew Attacks on Medicaid Management as Data Emerges on Misspending,” Daily Advertiser April 9, 2019, https://www.theadvertiser.com/story/news/local/louisiana/2019/04/09/gop-legislators-renew-attacks-medicaid-management-data-emerges-misspending/3418133002/.

[5] Chris Jacobs, “The Report the Department of Health Doesn’t Want You to Read,” Pelican Institute, September 26, 2019, https://pelicaninstitute.org/blog/the-report-the-department-of-health-doesnt-want-you-to-read/.

[6] Chris Jacobs, “What You Need to Know about Medicaid Crowd-Out,” Pelican Institute, May 20, 2019, https://pelicaninstitute.org/wp-content/uploads/2019/05/PEL_MedicaidCrowdOut_WEB-2.pdf.

[7] Louisiana Department of Health, “Louisiana Medicaid Expansion 2016-2017 Annual Report,” http://ldh.la.gov/assets/HealthyLa/Resources/MdcdExpnAnnlRprt_2017_WEB.pdf, p. 2.

[8] Louisiana Legislative Fiscal Office, Fiscal Note on HCR 3 (2015 Regular Session), http://www.legis.la.gov/legis/ViewDocument.aspx?d=942163.

[9] Louisiana Department of Health, “Medicaid Forecast Report: May 2019,” June 10, 2019, http://www.ldh.la.gov/assets/medicaid/forecast/FY19MedicaidForecast-may2019.pdf, Table 3, Expenditure Forecast by Category of Service, p. 2.

[10] Louisiana Department of Health, “Louisiana Medicaid Expansion 2016-2017 Annual Report,” p. 7.

[11] Louisiana Legislative Auditor, “Medicaid Eligibility: Wage Verification Process of the Expansion Population,” November 8, 2018, https://lla.la.gov/PublicReports.nsf/1CDD30D9C8286082862583400065E5F6/$FILE/0001ABC3.pdf.

[12] Ibid., Appendix E, Targeted Selection Individual Medicaid Recipient Cases, pp. 27-29.

[13] Sheridan Wall, “GOP Legislators Renew Attacks on Medicaid Management.”

[14] Melinda Deslatte, “Louisiana Medicaid Spending $400M Less Than Expected,” Associated Press June 12, 2019, https://www.nola.com/news/2019/06/louisiana-medicaid-spending-400m-less-than-expected.html.

[15] Rebekah Gee, “Medicaid Expansion, Fighting Fraud, Equally Important,” Daily Advertiser April 21, 2019, https://www.theadvertiser.com/story/opinion/editorial/2019/04/21/medicaid-expansion-fighting-fraud-equally-imoportant/3534502002/.

[16] Chris Jacobs, “What You Need to Know about Medicaid Crowd-Out.”

[17] Chris Jacobs, “Medicaid Expansion Has Louisianans Dropping Their Private Plans,” Wall Street Journal June 8, 2019, https://www.wsj.com/articles/medicaid-expansion-has-louisianans-dropping-their-private-plans-11559944048.

[18] Chris Jacobs, “What You Need to Know about Medicaid Crowd-Out.”

[19] Louisiana Department of Health, “Louisiana Medicaid Expansion 2016-2017 Annual Report,” p. 7.

[20] Louisiana Department of Health, “Louisiana Medicaid 2016 Annual Report,” http://ldh.la.gov/assets/medicaid/AnnualReports/2016AnnualReport.pdf, Table 3, Medicaid Vendor Payments for Budget Programs by State Fiscal Year, p. 5.

[21] Louisiana Department of Health, “Medicaid Forecast Report: May 2019,” Table 2, Expenditure Forecast by Budget Program, p. 1.

[22] Ibid, Table 3, Expenditure Forecast by Budget Category of Service, p. 2.

[23] Rebekah Gee, “Medicaid Expansion, Fighting Fraud, Equally Important.”

[24] Bureau of Labor Statistics, “Regional and State Employment and Unemployment—July 2016,” August 19, 2016, https://www.bls.gov/news.release/archives/laus_08192016.pdf, Table 5: Employees on Non-Farm Payrolls by State and Selected Industry Sector, Seasonally Adjusted, p. 13. The report for July 2016 reflects final (as opposed to preliminary) data for the June 2016 period.

[25] Bureau of Labor Statistics, “Regional and State Employment and Unemployment—August 2019,” September 20, 2019, https://www.bls.gov/news.release/archives/laus_09202019.pdf, Table 3: Employees on Non-Farm Payrolls by State and Selected Industry Sector, Seasonally Adjusted, p. 10. The report for August 2019 reflects final (as opposed to preliminary) data for July 2019.

[26] Bureau of Labor Statistics, “Regional and State Employment and Unemployment—July 2016,” Table 5, p. 13.

[27] Bureau of Labor Statistics, “Regional and State Employment and Unemployment—July 2016,” Table 3, Civilian Labor Force and Unemployment by State and Selected Area, Seasonally Adjusted, p. 11; Bureau of Labor Statistics, “Regional and State Employment and Unemployment—August 2019,” Table 1, Civilian Labor Force and Unemployment by State and Selected Area, Seasonally Adjusted, p. 8.

[28] Chris Jacobs, “Why Expanding Louisiana’s Program to Able-Bodied Adults Hurts the Economy,” Pelican Institute, April 17, 2018, https://pelicaninstitute.org/policy-brief-debunking-pro-medicaid-report/.

[29] Chris Jacobs, “LSU, Department of Health Inflate Claims in Medicaid Expansion Studies,” Houma Today July 27, 2019, https://www.houmatoday.com/news/20190727/opinion-lsu-department-of-health-inflate-claims-in-medicaid-expansion-studies.

[30] Louisiana State University response to Pelican Institute Public Records Act request, September 23, 2019.

[31] @rebekahgeemd, May 20, 2019, https://twitter.com/rebekahgeemd/status/1130459486307667968.

[32] Louisiana Department of Health Office for Citizens with Developmental Disabilities, “Waiver Services,” http://www.ldh.la.gov/index.cfm/page/142, accessed June 15, 2019.

[33] Louisiana Department of Health, response to Pelican Institute Public Records Act request, May 21, 2019.

[34] Nicholas Horton, “Waiting for Help: The Medicaid Waiting List Crisis,” Foundation for Government Accountability, March 6, 2018, https://thefga.org/wp-content/uploads/2018/03/WAITING-FOR-HELP-The-Medicaid-Waiting-List-Crisis-07302018.pdf.

[35] Chris Jacobs, “How Obamacare Undermines American Values: Penalizing Work, Citizenship, Marriage, and the Disabled,” Heritage Foundation Backgrounder No. 2862, November 21, 2013, http://www.heritage.org/research/reports/2013/11/how-obamacare-undermines-american-values-penalizing-work-marriage-citizenship-and-the-disabled.

[36] Chris Jacobs, “Reforming Medicaid in Louisiana,” Pelican Institute, January 30, 2018, https://pelicaninstitute.org/wp-content/uploads/2018/01/PEL_MedicaidPaper_FINAL_WEB.pdf.

Junk “Study” Demonstrates Liberal Think-Tank’s Bias

Why would an organization billed as a “respected source of health care data” publish an analysis with mutually contradictory conclusions? In the case of the Kaiser Family Foundation, the answer is simple: To defend Obamacare—even if the facts don’t align with one’s conclusions.

As conservatives have noted for years, Obamacare encourages states to discriminate against individuals with disabilities—a prime example of how government intervention in the health care system ultimately hurts those the left claims they want to help. Liberals, understanding the political power of such charges, feel compelled to push back on this narrative. While they don’t have many actual facts with which to do so, that hasn’t stood in the Kaiser Family Foundation’s way.

Obamacare’s Discrimination, Explained

If you could gain 50-76 cents for doing one thing, and 90 cents for doing another, which would you choose? I know which I would.

When I served on the Commission on Long-Term Care in 2013, it explored an area of health policy unknown to much of the public: Hundreds of thousands of individuals with disabilities remain on Medicaid waiting lists for home and community-based care. While federal law requires state taxpayers to pay nursing home benefits for all eligible Medicaid patients, coverage of community-based services remains optional, so states can—and do—establish waiting lists to control their Medicaid spending.

These waiting lists preceded Obamacare, so Obamacare didn’t cause the waiting lists per se. And individuals with disabilities on the waiting lists do have their health care needs paid for by Medicaid, even as they wait to become eligible for home-based care (e.g., help with bathing, dressing, etc.). But sheer common sense indicates that states will prioritize coverage of able-bodied adults—for which they get paid a higher match from the federal government—than eliminating their waiting list for individuals with disabilities.

The Flawed Premise

For the past several years, Kaiser has attempted to rebut charges that Medicaid expansion has affected waiting lists for individuals with disabilities. Their studies, including one released in April, claim that there is no relationship between whether a state has expanded Medicaid and increases or decreases in its waiting lists.

However, as I first noted two years ago, Kaiser’s over-simplistic analysis does not begin to consider the many other factors that affect decisions about their Medicaid programs and waiting lists. To use the most obvious example, the average state that has not expanded Medicaid is poorer than the average state that has. Connecticut, with a median income of $73,781 in 2017, has more resources to expand Medicaid to able-bodied adults and reduce its waiting lists than a state like Alabama, which had a median income of $46,472.

If Kaiser wanted to do a thorough analysis, it would control for this variable, and others. For instance, a good econometric analysis would factor in states’ morbidity rates—because states with sicker populations may have more individuals with disabilities needing care—along with the underlying cost of care, because states would have to spend more to reduce their waiting lists in areas with higher prices.

Contradictory Claims

How superficial are Kaiser’s conclusions? The section of its April paper right after the passage claiming no relationship between Obamacare and waiting lists includes this doozy:

Waiting lists are a function of the populations a state chooses to serve and how the state defines those populations; both of these factors vary among states, making waiting lists an incomplete measure of state capacity and demand for [home and community-based services] and not directly comparable among states. [Emphasis original.]

If waiting lists for individuals with disabilities are “not directly comparable among states,” then why did Kaiser in the preceding section claim Obamacare’s Medicaid expansion has nothing to do with waiting lists—a conclusion that by definition involves comparing waiting lists among states?

The question practically answers itself. Kaiser just hopes you won’t notice.

Talking Point versus Research

After more than two months, the researcher, Mary Beth Musumeci, would not deign to defend her “research” with a direct reply. Instead a Kaiser spokesman sent me what amounted to a polite brush-off, replicated in full below:

Thank you for your interest in our work. We appreciate people taking the time to consider our work and provide constructive feedback on it, and our team discussed your comments and ideas.

The data in the brief are presented as a simple, descriptive comparison of trends in wait lists stratified by expansion status, and we also tried to be clear about major limitations of the data, including caveats in state comparisons of wait lists. While we agree that further econometric analysis to assess causality could build on this work and contribute to policy understanding, the posted brief was not an attempt to undertake such analysis.

We appreciate your feedback and will consider it as we continue to develop our work in this area, and we hope our work serves as a useful basis for your own analysis and econometric research to undertake the type of work you suggest in your comments.

I responded with one simple question: Does the Kaiser Family Foundation have any plans to conduct an econometric study on Medicaid expansion and waiting lists? As I noted in my response:

You’ve admitted the limitations of your own analysis to date, but you’ve repeated these types of assertions for several years—without doing the type of in-depth research that you concede would be both warranted and more accurate. Why not?

Kaiser’s communications department responded that they don’t have that type of study planned. I won’t hold my breath for them to conduct this type of econometric study, either. As with the issue of pre-existing conditions, Kaiser won’t ask a question to which it doesn’t want to know the answer. Far better to use a crude and highly flawed “study” to claim that Obamacare hasn’t affected Medicaid waiting lists—the political conclusion the Kaiser analysts want to support.

A supposed “fact check” on the disability waiting list issue two years ago called the Kaiser Family Foundation a “respected source of health care data.” But by issuing mutually contradictory conclusions to maintain a political talking point, and not conducting the in-depth research that they admit the issue of Medicaid waiting lists warrants, Kaiser again reveals itself not so much as a respected source of health care data as a highly liberal one.

This post was originally published at The Federalist.

The Inconvenient Truths of Louisiana’s Medicaid Expansion

In the wake of a wave of stories about the tens of thousands of ineligible individuals who received Medicaid benefits, supporters keep trying to defend Louisiana’s expansion of Medicaid to the able-bodied. But their defenses ignore several inconvenient truths.

First, money doesn’t grow on trees. Health Secretary Rebekah Gee recently claimed that Louisiana’s “Medicaid expansion comes at no additional cost to taxpayers.” Because she believes the federal government will pay all the cost of Medicaid expansion, she thinks Louisiana taxpayers are “off the hook” for the program’s spending. But anyone who had to mail a check to the Internal Revenue Service on April 15 would disagree. By definition, any new government spending imposes a cost to taxpayers, because Louisiana residents pay taxes to Washington just like everyone else.

And Louisiana has seen a ton of new government spending due to Medicaid expansion. In 2015, the Legislative Fiscal Office projected spending on expansion to total $1.2 billion-$1.4 billion per year. In the last fiscal year, Louisiana spent nearly $3.1 billion on expansion—or more than double the Fiscal Office’s original estimates.

Second, the truly vulnerable continue to get overlooked due to Medicaid expansion. Secretary Gee claimed that her “top priority is to ensure every dollar spent [on Medicaid] goes towards providing health care to people who need it most.” But Louisiana still has tens of thousands of individuals with disabilities on waiting lists for home and community-based services—who are not getting the care they need, because Louisiana has focused on expanding Medicaid to the able-bodied.

Since Louisiana expanded Medicaid in July 2016, at least 5,534 Louisiana residents with disabilities have died—yes, died—while on waiting lists for Medicaid to care for their personal needs. Louisiana should have placed the needs of these vulnerable patients ahead of expanding coverage to able-bodied adults—tens of thousands of whom already had private health insurance and dropped that insurance to enroll in Medicaid expansion.

This skewed sense of priorities pervades supporters of Medicaid expansion. One recently claimed that most of the individuals improperly enrolled in expansion “are poor, but not poor enough to qualify for coverage” under Medicaid.

The Louisiana Legislative Auditor’s report suggests otherwise. The 100 Medicaid recipients studied by the auditor, 93 of whom did not qualify for benefits for at least one month they received them, had an average—repeat, average—household income of $67,742. Fourteen of the recipients reported income of over $100,000. One recipient reported income of $145,146—well above Governor John Bel Edwards’ annual salary of $130,000.

The Louisiana Department of Health recently acknowledged that at least 1,672 individuals receiving over $100,000 qualified for Medicaid benefits. Supporters of Medicaid expansion can claim that these six-figure Medicaid beneficiaries classify as “poor,” but hardworking taxpayers forced to foot the bill for these recipients would likely disagree.

Louisiana taxpayers deserve policies that prioritize the most vulnerable in society—individuals with disabilities currently dying on waiting lists—rather than funding benefits for enrollees with six-figure incomes, or able-bodied adults who dropped their private coverage to enroll in Medicaid. They deserve more than claims that money grows on trees, or that expanding dependency will lead to growth and prosperity. They deserve better than Medicaid expansion’s failed status quo.

This post was originally published in the Daily Advertiser.

One Way for Florida’s Legislature to Respond to a Medicaid Expansion Referendum

Last week, Politico reported on a burgeoning effort by unions and other groups to collect signatures on a ballot initiative designed to expand Medicaid in Florida. As the article notes, the effort comes after last fall’s approval of Medicaid ballot initiatives in Utah, Idaho, and Nebraska.

The effort comes as liberals try to extend “free” health care to more and more Americans. But that “free” health care comes with significant costs, and policymakers in Florida have opportunities to make those costs apparent to voters.

‘Free’ Money Isn’t Free

By contrast, the petition being circulated in Florida includes no source of funding for the state’s 10 percent share of Medicaid expansion funding under Obamacare. The failure to specify a funding source represents a typical liberal tactic. Advocates seeking to expand Medicaid have traditionally focused on the “free” money from Washington available for states that do expand. “Free” money from Washington and “free” health care for low-income individuals—what’s not to like?

Of course, Medicaid expansion has very real costs for states, without even considering the effects on their taxpayers of the federal tax increases needed to fund all that “free” money from Washington. Every dollar that states spend on providing health care to the able-bodied represents another dollar that they cannot spend elsewhere.

I have previously noted how spending on Medicaid has crowded out funding for higher education, thus limiting mobility among lower-income populations, and encourages states to prioritize the needs of able-bodied adults over individuals with disabilities, for whom states receive a lower federal Medicaid match.

Taxes Ahead? Oh Yeah, Baby

Proposing a state income tax to fund Medicaid expansion would certainly make the cost of expansion readily apparent to Florida voters, especially the retirees who moved to the Sunshine State due to its combination of warm weather and no individual income tax. Voters would likely think twice if Medicaid expansion came with an income tax—which of course lawmakers could raise in the future, to fund all manner of government spending.

Prior efforts suggest that making the costs of Medicaid expansion apparent to voters appreciably dampens support. Utah approved its ballot initiative, which included a sales tax increase, with a comparatively small (53.3 percent) approval margin. In Montana, a referendum proposing a tobacco tax increase to fund a continuation of that state’s Medicaid expansion (which began in 2016) went down to defeat in November.

New Taxes Are an Uphill Battle

Liberal groups already face challenges in getting a Medicaid ballot initiative approved in Florida. The state constitution requires 60 percent approval for all initiative measures intended to change that document, a higher bar than advocates for expansion have had to clear elsewhere. Of the four states where voters approved Medicaid expansion—Maine, Nebraska, Utah, and Idaho—only the margin in Idaho exceeded 60 percent, and then just barely (60.58 percent).

Disclosure: While the author served on the health care transition advisory committee of Florida Gov. Ron DeSantis, the views expressed above represent his personal views only.

This post was originally published at The Federalist.

Exclusive: Inside the Trump Administration’s Debate over Expanding Obamacare

Last August, I responded to a New York Times article indicating that some within the Trump administration wanted to give states additional flexibility to expand Medicaid under Obamacare. Since then, those proposals have advanced, such that staff at the Centers for Medicare and Medicaid Services (CMS) believe that they have official sign-off from the president to put those proposals into place.

My conversations with half a dozen sources on Capitol Hill and across the administration in recent weeks suggest that the proposal continues to move through the regulatory process. However, my sources also described significant policy pitfalls that could spark a buzz-saw of opposition from both the left and the right.

The Times reported that some within the administration—including CMS Administrator Seema Verma and White House Domestic Policy Council Chairman Andrew Bremberg—have embraced the proposal. But if the plan overcomes what the Times characterized as a “furious” internal debate, it may face an even tougher reception outside the White House.

How It Would Work

After the Supreme Court made Medicaid expansion optional for states as part of its 2012 ruling upholding Obamacare’s individual mandate, the Obama administration issued guidance interpreting that ruling. While the court made expansion optional for states, the Obama administration made it an “all-or-nothing” proposition for them.

Under the 2012 guidance—which remains in effect—if states want to receive the enhanced 90 percent federal match associated with expansion, they must cover the entire expansion population—all able-bodied adults with incomes under 138 percent of the federal poverty level (just under $35,000 for a family of four). If states expand only to some portion of the eligible population, they would only receive their regular Medicaid match of 50-76 percent, not the enhanced 90 percent match.

The Internal Debate

The August Times article indicated that, after considering partial expansion, the administration postponed any decision until after November’s midterm elections. Since that time, multiple sources disclosed to me a further meeting that took place on the topic in the Oval Office late last year. While the meeting was originally intended to provide an update for the president, CMS staff left that meeting thinking they had received the president’s sign-off to implement partial expansion.

Just before Christmas, during a meeting on an unrelated matter, a CMS staffer sounded me out on the proposal. The individual said CMS was looking for ways to help give states additional flexibility, particularly states hamstrung by initiatives forcing them to expand Medicaid. However, based on my other reporting, I believe that the conversation also represented an attempt to determine the level of conservative opposition to the public announcement of a decision CMS believes the president has already made.

Why Liberals Will Object

During my meeting, I asked the CMS staffer about the fiscal impacts of partial expansion. The staffer admitted that, as I had noted in my August article, exchange plans generally have higher costs than Medicaid coverage. Therefore, moving individuals from Medicaid to exchange coverage—and the federal government paying 100 percent of subsidy costs for exchange coverage, as opposed to 90 percent of Medicaid costs—will raise federal costs for every beneficiary who shifts coverage under partial expansion.

The Medicare actuary believes that the higher cost-sharing associated with exchange coverage will lead 30 percent of the target population—that is, individuals with incomes from 100-138 percent of poverty—to drop their exchange plan. Either beneficiaries will not be able to afford the premiums and cost-sharing, or they will not consider the coverage worth the money. And because 30 percent of the target population will drop coverage, the partial expansion change will save money in a given state—despite the fact that exchange coverage costs more than Medicaid on a per-beneficiary basis.

Why Conservatives Will Object

I immediately asked the CMS staffer an obvious follow-up question: Did the actuary consider whether partial expansion, by shifting the costs of expansion from the states to the federal government, would encourage more states to expand Medicaid? The staffer demurred, saying the actuary’s analysis focused on only one hypothetical state.

However, the CMS staffer did not tell me the entire story. Subsequent to my “official” meeting with that staffer, other sources privately confirmed that the actuary does believe that roughly 30 percent of the target population will drop coverage.

But these sources and others added that both the Medicare actuary and the Congressional Budget Office (CBO) agree that, notwithstanding the savings from current expansion states—savings associated with individuals dropping exchange coverage, as explained above—the partial expansion proposal will cost the federal government overall, because it will encourage more states to expand Medicaid.

For instance, the Council of Economic Advisers believes that spending on non-expansion states who use partial expansion as a reason to extend Medicaid to the able-bodied will have three times the deficit impact as the savings associated with states shifting from full to partial expansion.

Because the spending on new partial expansion states will overcome any potential savings from states shifting from full to partial expansion, the proposal, if adopted, would appreciably increase the deficit. While neither CBO nor the Medicare actuary have conducted an updated analysis since the election, multiple sources cited an approximate cost to the federal government on the order of $100-120 billion over the next decade.

One source indicated that the Medicare actuary’s analysis early last summer arrived at an overall deficit increase of $111 billion. The results of November’s elections—in which three non-expansion states voted to accept expansion due to ballot initiatives—might have reduced the cost of the administration’s proposal slightly, but likely did not change the estimate of a sizable deficit increase.

A net cost of upwards of $100 billion, notwithstanding potential coverage losses from individuals dropping exchange coverage in current expansion states, can only mean one thing. CBO and the Medicare actuary both believe that, by lowering the cost for states to expand, partial expansion will prompt major non-expansion states—such as Texas, Florida, Georgia, and North Carolina—to accept Obamacare’s Medicaid expansion.

Who Will Support This Proposal?

Based on the description of the scoring dynamic my sources described, partial expansion, if it goes forward, seems to have no natural political constituency. Red-state governors will support it, no doubt, for it allows them to offload much of their state costs associated with Medicaid expansion onto the federal government’s debt-laden dime. Once CMS approves one state’s partial expansion, the agency will likely have a line of Republican governors out its door looking to implement waivers of their own.

But it seems unlikely that Democratic-led states will follow suit. Indeed, the news that partial expansion would cause about 30 percent of the target population to drop their new exchange coverage could well prompt recriminations, investigations, and denunciations from Democrats in Congress and elsewhere. Because at least 3.1 million expansion beneficiaries live in states with Republican governors, liberals likely would object to the sizable number of these enrollees who could decide to drop coverage under partial expansion.

Conversely, conservatives will likely object to the high net cost associated with the proposal, notwithstanding the potential coverage losses in states that have already expanded. Some within the administration view Medicaid expansion, when coupled with proposals like work requirements, as a “conservative” policy. Other administration officials view expansion in all states as something approaching a fait accompli, and view partial expansion and similar proposals as a way to make the best of a bad policy outcome.

But Medicaid expansion by its very nature encourages states to discriminate against the most vulnerable in society, because it gives states a higher match for covering able-bodied adults than individuals with disabilities. In addition to objecting to a way partial expansion would increase government spending by approximately $100 billion, some conservatives would also raise fundamental objections to any policy changes that would encourage states to embrace Obamacare—and add even more able-bodied adults to the welfare rolls in the process.

Particularly given the Democratic takeover of the House last week, the multi-pronged opposition to this plan could prove its undoing. Democrats will have multiple venues available—from oversight through letters and subpoenae, to congressional hearings, to use of the Congressional Review Act to overturn any administration decisions outright—to express their opposition to this proposal.

A “strange bedfellows” coalition of liberals and conservatives outraged over the policy, but for entirely different reasons, could nix it outright. While some officials may not realize it at present, the administration may not only make a decision that conservatives will object to on policy grounds, they may end up in a political quagmire in the process.

This post was originally published at The Federalist.

Three Elements of a Conservative Health Care Vision

Recently I wrote about how conservatives failed to articulate a coherent vision of health care, specifically issues related to pre-existing conditions, in the runup to the midterm elections. That article prompted a few Capitol Hill colleagues to ask an obvious question: What should a conservative vision for health care look like? It’s one thing to have answers on specific issues (i.e., alternatives to Obamacare’s pre-existing condition regulations), but what defines the vision of where conservatives should look to move the debate?

Henceforth, my attempt to outline that conservative health-care vision on a macro level with three relatively simple principles. Others may express these concepts slightly differently—and I take no particular pride of authorship in the principles as written—but hopefully they will help to advance thinking about where conservative health policy should lead.

Portable Insurance

Conversely, conservatives believe in insurance purchased by individuals—or, as my former boss Jim DeMint likes to describe it, an insurance policy you can buy, hold, and keep. With most Americans still obtaining health coverage from their employers, a move to individually owned coverage would mean individuals themselves would decide what kind of insurance to purchase, rather than a business’s HR executives.

Conservatives should also promote the concept of portable insurance that can move from job to job, and ideally from state to state as well. If individuals can buy an insurance policy while young, and take it with them for decades, then much of the problem of covering individuals with pre-existing conditions will simply disappear—people will have the same insurance before their diagnosis that they had for years beforehand.

I wrote approvingly about the Trump administration’s proposals regarding Health Reimbursement Arrangements precisely because I believe that, if implemented, they will advance both prongs of this principle. Allowing employees to receive an employer contribution for insurance they own will make coverage both individual and portable, in ways that could revolutionize the way Americans buy insurance.

A Sustainable Safety Net

As it is, the Medicare program became functionally insolvent more than a year ago. The year before Obamacare’s passage, the Medicare trustees asserted the program’s hospital insurance trust fund would become insolvent in 2017. Only the double-counting included in Obamacare—whereby the same Medicare savings were used both to “save Medicare” and fund Obamacare—has allowed the program to remain solvent, on paper if not in fact.

Reasonable people may disagree on precisely where and how to draw the line at the sustainability of our entitlements. For instance, I hold grave doubts that able-bodied adults belong on Medicaid, particularly given the way Obamacare’s expansion of Medicaid has encouraged states to discriminate against individuals with disabilities and the most vulnerable.

But few could argue that the current system qualifies as sustainable. Far from it. With Medicare beneficiaries receiving more from the system in benefits than they paid in taxes—and the gap growing every year—policy-makers must make hard choices to right-size our entitlements. And they should do so sooner rather than later.

Appropriately Aligned Incentives

Four decades ago, Margaret Thatcher hinted at the primary problem in health care when she noted that socialists always run out of other people’s money. Because third-party insurers—in most cases selected by HR executives at individuals’ place of business rather than the individuals themselves—pay for a large share of health expenses, most Americans know little about the price of specific health care goods and services (and care even less).

To state the obvious: No, individuals shouldn’t try to find health care “deals” in the ambulance on the way to the hospital. But given that much health care spending occurs not for acute cases (e.g., a heart attack) but for chronic conditions (i.e., diabetes), policymakers do have levers to try to get the incentives moving in the right direction.

Reforming the tax treatment of health insurance—which both encourages individuals to over-consume care and ties most Americans to employer-based insurance—would help align incentives, while also encouraging more portable insurance. Price transparency might help, provided those prices are meaningful (i.e., they relate to what individuals will actually pay out-of-pocket). Giving individuals financial incentives to shop around for procedures like MRIs, or even surgical procedures, also would place downward pressure on prices.

This post was originally published at The Federalist.

How AARP Made BILLIONS Denying Care to People with Pre-Existing Conditions

On Wednesday, the U.S. Senate voted to maintain access to short-term health coverage. Senate Democrats offered a resolution disapproving of the Trump administration’s new rules regarding the more affordable plans, but the resolution did not advance on a 50-50 tie vote.

Because short-term plans need not comply with Obamacare’s restrictions on covering prior health ailments, Senate Democrats used the resolution to claim they will protect individuals with pre-existing conditions. But what if I told you that, in the years since Obamacare passed, one organization has made more than $4.5 billion in profits, largely from denying care to vulnerable individuals with pre-existing conditions?

You might feel surprised. After all, didn’t Obamacare supposedly prohibit “discrimination” against individuals with pre-existing conditions? But what if I told you that the organization raking in all those profits was none other than AARP, the organization that claims to represent seniors? Then the profits might make more sense.

Obamacare and Pre-Existing Conditions

Even though an article on AARP’s own website states that, as of 2014, “insurance companies [are] required to sell policies to anyone, regardless of their pre-existing medical conditions,” that claim isn’t quite accurate. Obamacare exempted Medigap supplemental insurance plans from all of its “reforms,” including the prohibition on “discriminating” against individuals with pre-existing conditions.

As a 2011 Washington Post article noted, individuals can apply for Medigap plans when they first turn 65 and become eligible for Medicare. “However, when Congress created this protection in 1992…it exempted disabled Medicare beneficiaries under age 65, a group that now totals 8 million people.”

In other words, the most vulnerable Medicare beneficiaries—those enrolled because they receive Social Security disability benefits—often cannot obtain Medigap coverage due to pre-existing conditions. And because traditional Medicare does not provide a catastrophic cap on patient cost-sharing (Medigap plans often provide that coverage instead), disabled beneficiaries who want to remain in traditional Medicare (as opposed to Medicare Advantage plans offered by private insurers) may face unlimited out-of-pocket spending.

The Post article conceded that Obamacare “does not address this issue. A provision to provide disabled Medicare beneficiaries better coverage was dropped from the legislation during congressional negotiations because it would have increased Medicare costs, according to a House Democratic congressional aide.” That’s where AARP comes in.

Why Didn’t AARP ‘Show Congress the Money’?

In July 2009, the Congressional Budget Office (CBO) analyzed a House Democrat bill that, among other things, would have made Medigap coverage available to all individuals, regardless of pre-existing conditions. CBO stated that the Medigap provisions in Section 1234 of the bill would have raised federal spending by $4.1 billion over ten years—a sizable sum, but comparatively small in the context of Obamacare itself.

Contrary to the anonymous staffer’s claims to the Washington Post, if House Democrats truly wanted to end pre-existing condition “discrimination” against individuals with disabilities enrolling in Medicare, they had an easy source of revenue: AARP. As Democrats were drafting Obamacare, in November 2009, the organization wrote in a letter to Rep. Dave Reichert (R-WA) that AARP “would gladly forego every dime of revenue to fix the health care system.”

Since that time, AARP has made quite a few dimes—about 45,090,743,700, in fact—from keeping the health care system just the way it was.

Billions in Profits, But Few Principles

A review of AARP’s financial statements shows that since 2010, AARP has made more than $4.5 billion in income from selling health insurance plans, and generating investment income from plan premiums:

AARP makes its money several ways. As the chart demonstrates, a large and growing percentage of its “royalty” money comes from United Healthcare. United Healthcare sells AARP-branded Medigap plans, Part D prescription drug coverage, and Medicare Advantage insurance.

However, as a 2011 House Ways and Means Committee report made clear, in AARP receiving royalty revenues, not all forms of coverage are created equal. While the organization receives a flat fee for the branding of its Part D and Medicare Advantage plans, it receives a percentage (4.95 percent) of revenue with respect to its Medigap coverage. This dynamic means Medigap royalties make up the majority of AARP’s revenue from United Healthcare, giving AARP a decided bias in favor of the status quo, even if it means continuing to discriminate against individuals with disabilities.

AARP’s Deafening Silence

So if in the seven years since Obamacare’s enactment, AARP has earned more than enough in profits and investment income to offset the cost of changes to Medigap, and AARP publicly told Congress that it would gladly forego all its profits to achieve health care reform, why didn’t AARP make this change happen back in 2010?

AARP occasionally claims it supports reforming Medigap, normally in response to negative publicity about its shady business practices. But by and large, it avoids the subject entirely, preferring to cash in on its Medigap business by flying under the radar.

As I previously noted, in the fourth quarter of 2016 AARP lobbied on 77 separate bills, including such obscure topics as lifetime National Park Service passes, but took absolutely no action to support Medigap reform.

So the next time a liberal Democrat wants to get on his or her high horse and attack conservative policy on pre-existing conditions, ask why they support AARP making $4.5 billion in profits by denying care for individuals with disabilities. Then maybe—just maybe—one day someone could get AARP to put its money where its mouth is.

This post was originally published at The Federalist.