The Poor Are Different From You and I (Gwen Moritz Editor's Note)

by Gwen Moritz  on Monday, Sep. 17, 2012 12:00 am  

Gwen Moritz

My job requires me to maintain a laser-like focus on the issues of interest to business executives, but sometimes I wonder if my audience is a bit too exclusive. At the Health Care Reform Symposium that our company sponsored last week, Peter Banko, CEO of St. Vincent Health System, repeatedly had to remind the audience that a whole lot of Arkansans are barely scraping by.

Banko was on a luncheon panel with Arkansas Insurance Commissioner Jay Bradford, state Sen. Jonathan Dismang, R-Beebe, and John Selig, director of the state Department of Human Services. When a member of the audience asked the panel whether Medicaid recipients could be required to pay higher copays or adopt healthier lifestyles, Selig wonkishly explained that the federal government, which provides most of Arkansas' Medicaid funding, limits the kind of restrictions that states can place on recipients.

But Banko told the audience that health care providers have trouble collecting copays and deductibles even from patients who aren't poor. (That reminded me of a utility executive who complained about perpetually late payments from Chenal Valley addresses. But I digress.)

The truth is, the vast majority of Medicaid recipients in Arkansas are people who aren't making many of their own lifestyle decisions anyway. They are children, the frail elderly in nursing homes and the disabled. Other than temporarily pregnant women who would otherwise be uninsured, there just aren't many able-bodied adults covered by Medicaid in Arkansas because our state is among the least generous in that respect. (Only 4 percent of Arkansas' Medicaid budget, as of fiscal 2009, was spent on adults who were neither disabled nor elderly. The national average was 14 percent.)

Banko also pointed out that eating "fresh vegetables from Whole Foods" is a lot more expensive than eating off the dollar menu at McDonald's - too expensive for, say, a single mother earning $10 an hour (less than $21,000 a year, before payroll deductions like Social Security and Medicare). Arkansas Business readers may have some nostalgia about eating ramen noodles in college, but that's hardly the same as trying to feed a family.

Then Banko said something that nearly knocked me off my chair: He said that some of his own employees - 6 percent, he said - simply couldn't afford the employee share of St. Vincent's group health insurance premium. This was astonishing because the working poor are working for someone, but I can't remember the last executive who acknowledged that fact. (St. Vincent responded by lowering the premium for low-wage workers and raising it for the highly paid.)

Last week the U.S. Census Bureau issued new poverty statistics, and while Arkansas has moved up to No. 44 among the 50 states and the District of Columbia, our poverty rate (17.6 percent) is still 19 percent higher than the national average (14.8 percent). And poverty is miserably poor by any standard. In 2011, the poverty line for a parent and two kids was $18,123 and $22,811 for two parents and two children. Getting by even at 133 percent of poverty, the income level that would be covered by expanded Medicaid, could be charitably described as struggling.

Just hours before Peter Banko made his comments, Gov. Mike Beebe announced his firm support for expanding Medicaid as allowed (but not required) by the federal health care reform act now universally referred to as Obamacare. Having been assured that the state could later un-expand coverage if it became too expensive, Beebe took what seems to me the only humane position.

It also seems to me to be the pro-business position, and not just in the global sense that millions of additional federal dollars flowing into Arkansas will be a good thing. Those low-wage workers who would be eligible for Medicaid coverage under the expanded program will be healthier and more financially secure at no cost to their employers.

Republican lawmakers, whose votes will be needed to get the supermajority required to approve expansion, are right about this: It would be hard to take that benefit away in the future. But Arkansas should cross that bridge when and if we come to it. As attendees at the symposium were reminded, like it or not, health care reform isn't going away. Arkansas should make the most of it.

(Gwen Moritz is editor of Arkansas Business. Email her at GMoritz@ABPG.com and follow her on Twitter @GwenMoritz.)

 

 

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