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Life Health > Health Insurance > Health Insurance

LTCI Watch: Why Medicaid?

By Allison Bell

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So, why the heck don’t we cancel Medicaid and give the tax money spent on the program to the poor, as Bloomberg columnist Megan McArdle suggested in a recent column?

Two reasons are a selfish interest to live and to have the freedom to leave our homes.

Right now, for example, South Korea is facing an outbreak of Middle East respiratory syndrome (MERS), a vicious killer cousin of the common cold. The country has recorded nine MERS-related deaths, closed about 900 schools, and put about 3,000 people in quarantine.

Last fall, we were running similar articles about Ebola in Africa. At some point, in the future, we’ll probably run similar articles about a killer flu in the United States.

Maybe we’ll be able to cover one of those outbreaks up close, because we’ll have the bad bug. We’ll be able to get art for our coverage by going through our selfies.

The lesson is that, as costly and troubling as conditions like diabetes and cancer are, infectious disease is still a serious threat. There are scientists who continue to investigate the possibility that even the “diseases of affluence” may have something to do with infections.

The United States set up Medicaid partly to protect poor people against conditions that might afflict them, but partly in the hope that providing them with a basic level of care, whether they want it or not, will reduce the likelihood that their conditions will afflict the rest of us.

The second reason to have Medicaid is that we’re squeamish.

We, as a nation, hate to see gum, soda cans or slugs on the sidewalk, let alone dead people.

We may be more enthusiastic than we used to be about assisted suicide, but we still seem to see that as an option for patients who really want it, not a standard course of treatment. 

One result of our squeamishness: The U.S. government has become a giant source of public long-term care insurance (LTCI). Private LTCI issuers argue otherwise, but, of course, most Americans are broke enough after spending a few months in a nursing home to have little hope of leaving anything to their “heirs” (bill wranglers), anyway. Medicaid is their go-to source of coverage.

Ben Bernanke, the former Federal Reserve chairman, reminded audiences every chance he got that one of the main long-term risk factors facing the United States is the need to prepare for caring for an aging population.

Standard & Poor’s had one rating analyst expressing frustration Wednesday about LTCI issuers that promise him, “This time it’s different,” then follow up by having to conduct the umpteenth review of the adequacy of LTCI reserves.

But then, at about the same time, S&P had other analysts who decided to affirm the AA+ sovereign credit rating of the United States, without mentioning anything about aging or health policy other than that labor force participation might decrease, and that Congress was functional enough to pass a Medicare payment reform bill. 

Imagine that: The United States has an AA+ rating. Some of the people on S&P’s sovereign rating team have a great sense of humor.

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