Of Mice and Medicine: How Investing in Medicaid will Create Jobs

A new report by the Commonwealth Fund highlights the dangers lawmakers face when they approach health care policy without the bigger picture in mind.

By Yvonne Yen Liu Sep 13, 2011

As a follower of debates around health care policy, I often feel as if I’m watching three blind mice fumble about, trying to identify this enormous behemoth in their midst. 

 "It’s all about expansion of insurance coverage!" shrieks one, "We need to make sure that everyone has coverage under an insurance plan, one purchased in the marketplace.  Punishing them if they don’t, just like car insurance." 

 "No," screams another mouse, "What good is insurance if it only buys you shoddy care?  We need to invest in community health clinics, so that everyone has access to the primary care that they need!" 

 "Au contraire," the third mouse spoke up, "The problem is rising costs, because people are not paying into the system, taxpayers end up bearing the brunt.  Society should just let the uninsured die."*

All three mice, like the back and forth between the President, Democrats and Republicans, bicker furiously to extend their particular perspective to the whole.  But, one thing they can all agree on: something has to give.  And, because the word of the day, post-Labor Day, has been about jobs after the summer’s craze for deficit reduction, even Democrats are cozying up to cuts to Medicare and Medicaid, in a manner previously unthinkable, ostensibly, to fund job creation. 

Obama, in his jobs speech to Congress last week, said spending cuts would fund his $47 billion plan to resuscitate the U.S. economy, including "modest adjustments to health care programs like Medicare and Medicaid."  He added, "We have to reform Medicare to strengthen it."  What that means exactly is still unclear, but he hinted, ominously, that the cuts will be deeper even than the $1.5 trillion that the Congressional Supercommittee is charged with slashing.

Cuts to Medicaid and Medicare would be devastating to communities of color.  People of color comprise more than half of the 50 million Medicaid recipients.  As Amara Nwosu wrote previously, a report released last month by the Alliance for a Just Society found that existing disparities in health care access and quality of care would be exacerbated if Medicaid was slashed. 

What Obama and Congress don’t acknowledge is the beast in the room: the increasing number of people losing coverage or any recourse to health care because of being jobless, most of them people of color.  A new report by the Commonwealth Fund found that the number of underinsured adults increased by 80 percent, from 16 to 29 million, since the start of the Great Recession. Lacking or having inadequate coverage is often due to the loss of a job, because most in this country get our health insurance through our employer. Moreover, one out of every two adults, that’s 81 million people, were either underinsured or uninsured in 2010.

Shocking, but not surprising.  We know more people of color are unemployed than whites and for longer periods of time.  Being jobless leads not only to economic woes, but also emotional and physical ones.  I wrote previously about how incidents of chronic health conditions increase dramatically for those who lose their jobs.  We also know that neighborhoods with the highest foreclosure rates, mostly residents of color, correlate with poor health outcomes.

And, this monster is growing, despite itself, in dimensions unthinkable by the blinded mice.  The Affordable Care Act changed health care financing by moving pots of money previously allocated to safety net hospitals, to cover their debt incurred by treating uninsured patients, towards expansion of private insurance coverage.  As a result, across the nation, hospitals and emergency room departments, places of last resort care for the millions of jobless and uninsured as well as recent and undocumented immigrants, are closing their doors. Guess where most of these hospitals are located?  You got it: urban communities of color, mostly of those living in poverty.

If we’re talking about jobs, we know that investment in health care creates more opportunities, particularly for workers of color who can’t find work in our shrinking manufacturing base.  Numbers crunched by our friends at the Health Rights Organizing Project and the Political Economy Research Institute found that Medicaid spending actually creates jobs and stimulates the economy.

So, let’s address the elephant in the room: Medicaid + Medicare + increased support for community clinics, as well as safety net hospitals = a healthy, happy and prosperous populace.  Take away any of the factors of the equation and you get the ugly monster that we’re looking at now, a Congress with blinders on, and a President too mousy to speak up.


* A popular opinion, apparently, among attendees of last night’s GOP debate.