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Thursday, October 27, 2016

Sometimes it seems like the world is divided into two kinds of people: Those who understand what it’s like to live without much money and those who make it harder to live that way — even if they have good intentions.

Seattle business owner Dan Price is at the head of the class in the first category. The founder of Gravity Payments, a credit card payment processing company, became a media celebrity this week after telling his employees that he would raise salaries for three years until everyone was making at least $70,000. That means about 70 people will get raises and 30 of them will see their pay double, The New York Times reported.

Price based his decision on talking to friends about coping with rent increases and credit card debt on $40,000 a year, according to the Times, and on a 2010 happiness study by psychologist Daniel Kahneman and economist Angus Deaton. They found that about $75,000 was the point at which people experienced maximum emotional well-being in their day-to-day lives.

More money enabled people to buy more things but did not do much to improve their moods, the authors wrote. By contrast, they said, less money increased the frequency and intensity of stress, sadness and anger, and exacerbated “the emotional pain associated with such misfortunes as divorce, ill health, and being alone.”

These researchers are not alone. Consider the 2013 book Scarcity: Why Having Too Little Means So Much, by economist Sendhil Mullainathan of Harvard and psychologist Eldar Shafir of Princeton. The pair found that stress about not having enough money can subtract 13 IQ points from your mental capacity — a more dramatic dip than losing a whole night of sleep.

The Medicaid health insurance expansion in the beleaguered Affordable Care Act was in its original design a way to ease stress born of scarcity, in this case too much money to qualify for traditional Medicaid but not enough to pay for private insurance. The beneficiaries would be nowhere close to the $40,000 that Price’s friends found hard to live on. This expansion was meant for people with income of up to $16,243, or 138 percent of the federal poverty level.

The Supreme Court ruled in 2012 that the expansion had to be optional. Since then, some states have adopted individualized plans never envisioned by the law’s Democratic authors. Others have not expanded Medicaid at all, leaving millions in a coverage gap between traditional Medicaid and new ACA subsidies to help people above the 138 percent line buy private insurance.

Montana is currently on track to become the 29th state to expand Medicaid to the group in the gap, and that’s great news. What’s not so great is that its plan is likely to be complicated, discourage enrollment, and penalize the poor by requiring premium payments. This is the pattern in several states dominated by conservatives. People must have skin in the game, they say, take personal responsibility for their health costs.

That’s a fine principle. In real life, it creates hardship. In Montana, for instance, the new Medicaid enrollees will have to pay 2 percent of their annual income for premiums, or up to $32 a month for an individual. It doesn’t sound like much, but that’s a tank of gas or two weeks of spaghetti dinners.

Furthermore, research shows that fewer people enroll when they have to write monthly premium payments or go through a complicated administrative process. And the new rules certainly are complicated. “It seems to me that Indiana now has at least six different sets of benefits and cost-sharing rules for non-disabled adults in its Medicaid program,” Joan Alker, executive director of the Georgetown University Center for Children and Families, wrote in January. One of her blog posts was headlined “Indiana Agreement Wins the Award for Bureaucratic Complexity and Red Tape.”

If the point is to cover more people, this is not optimal. If the point is to depress enrollment to save money down the road, when states will have to start picking up a small fraction of the cost, that is contrary to the spirit of the law. If the point is to make sure people aren’t getting something for nothing, that bears further examination. According to the Kaiser Family Foundation, two-thirds of the 4 million in the coverage gap as of last fall had jobs — 43 percent full-time, 23 percent part-time. You could argue that the real recipients of something for nothing are their employers, who aren’t giving them health insurance or paying them enough to buy it.

Democrats are so grateful that Republicans are agreeing to any form of expansion that both the Obama administration and state legislators are going along, as they should. But it’s clear from research into what improves people’s lives and prospects that Dan Price is going in the right direction — and some of these Medicaid plans are taking a counterproductive right turn.

Follow Jill Lawrence on Twitter @JillDLawrence. To find out more about Jill Lawrence and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at 

Photo: Images Money via Flickr

  • Daniel Jones

    What they get wrong with any aid is the “aid” part.

  • TZToronto

    Hey, Blue State jerks! Make it a single-payer system in which everyone is covered by the state! Very simple. Oh wait. I’m dreaming. It’s not going to happen in the USA for years, until the far right die off and stop denying people what they need to live. With a single-payer system, taxes would rise, but insurance premiums would fall–probably a wash. Oh, and don’t allow any private plans to compete with the public one. Take profit out of the system, and see how much better health care would be. . . . It would be gratifying to see the Koch bros lining up with everyone else for a flu shot or a colonoscopy.

    • dtgraham

      I think Vermont is working on that right now. They’re getting ready to go all single payer in 2016 or 2017 [can’t remember which]. Amazing, I know. They brought in gay marriage too. Must have been from all those years touching Canada.

      You’d think that in time there would be copy cat blue states following Vermont’s example.

      • TZToronto

        The reason I say Blue State jerks is because we know the Red states won’t consider it for fear of losing their ultra right-wing, anti-socialist base. So what’s the hold-up, Blue people? Once people get to know single-payer, they’ll never give it up. The problem is that it won’t work to its potential unless all 50 states have a single-payer system that’s reciprocal.

        • dtgraham

          It’s clearly going to have to be done on a state by state basis in my view. Many of the U.S. states have populations and economies that match and exceed a lot of countries around the world. California’s population and GDP are both roughly equal (just slightly higher) to Canada’s for example, so it’s certainly doable.

          One problem would be the number of Americans from out-of-state (foreigners?) that would be in your single payer state at any one time. That would likely be far in excess of the foreign nationals that would be present if those individual states were autonomous countries. You’d need to find a way to deal with the out-of-state citizens who used your state’s single payer hospital services when visiting. It could be a little unwieldy but it hardly seems like an inextricable problem.

          It would probably have to be the bluest of the blue states to do this, at least at first anyway. It would likely be too controversial to get off the ground in states with some purple mixed in. In the compromise, bargaining, American system the political right would fight like tigers to sabotage it. You’d need states with strong Democratic parliamentary majorities and a politically homogenous population that would buy in. California and Massachusetts come to mind, besides Vermont obviously. Maybe you can think of others.

          • TZToronto

            Even the Canadian system us not a true single-payer system. Each province runs its own system, but each (with the exception of Quebec) accepts the plans of the other provinces. (Quebec bills the patient, but other provinces’ plans reimburse the patient.) So if you have, for example an OHIP card (Ontario Health Insurance Plan) and get sick in Alberta, your treatment Is covered. Alberta bills Ontario, and the patient doesn’t see a bill. However, not everything is covered identically in all provinces. So if your treatment in Alberta wouldn’t be covered in Ontario, then you’d end up paying. For the most part, though, coverage is reciprocal. Now, how that would translate to a mixed system in the US, I don’t know.

          • dtgraham

            I thought that portability and accessibility were two of the five principles of the Canada Health Act that applied everywhere. Canadians arriving from another province to take up residency in Quebec were supposed to be covered by the plan of their province of origin for 3 months following their registration in Quebec. I don’t work in the healthcare field but that’s how I read it. I didn’t know anything about Quebec billing a patient, only to reimburse the patient later. That seems like it would violate the CHA. I’ve used health care services in provinces other than my own (after running marathons) and never saw a bill. Not Quebec though, I’ll admit.

            “Blue states first, then watch people in the other states demand the same coverage.” Logically that makes a ton of sense, but the recent Medicaid expansion gives me pause to reconsider that. I know that Medicaid only covers a minority of people but, nevertheless, you never know when life might reduce you to Medicaid coverage. Red states haven’t accepted the ACA Medicaid expansion (mostly) and yet I don’t see them beginning to turn blue. They still seem to be polling as Republican as ever, and voting that way in 2012 and 2014.

            Full single payer coverage for everyone might be a very different matter though. Hard to say.

  • howa4x

    I can’t see what the problem is for red sates. The Fed is picking up the bill so it doesn’t cost them anything so this is more about the distain that the GOP has for the working poor. In republican minds the working poor aren’t smart enough to make more money so let’s punish them for asking for help. This is the same mind set that made republicans vote against social security, Medicare and Medicaid. To republicans corporate welfare is fine and giving tax cuts to people who don’t need them is great, but helping out struggling Americans is verboten.