Tom Corbett to PA's Working Poor: "Drop Dead!"

Part 4. What We Can Do

On Tuesday, February 5, PA Governor Tom Corbett stated that at this time he cannot recommend accepting $38 billion in federal funding to expand Medicaid, thereby denying medical assistance to more than 700,000 Pennsylvanians. So far, I've discussed empirical studies demonstrating that Medicaid improves health and saves lives, the costs and benefits of Medicaid, how those costs and benefits are distributed in Pennsylvania, and the governor's stated reasons for rejecting Medicaid expansion.

The conclusion to this series has proven to be the most difficult to write. I've already had to change the “tomorrow” in part 3 to “next time.” It's time to tie the loose ends together.

First, let me try to justify the rude title of these posts. As previously noted, the Sommers, et al, study contains an estimate of the number of lives saved by Medicaid expansion.

Results correspond to 2840 deaths prevented per year in states with Medicaid expansions, in which 500,000 adults acquired coverage. This finding suggests that 176 additional adults would need to be covered by Medicaid in order to prevent one death per year.

Granted, this is just an estimate. The real number may be somewhat higher or lower, but both mortality and Medicaid enrollment statistics in this country are usually pretty accurate. Corbett's decision will deny health insurance to 719,000 Pennsylvanians whose income is between 46% and 100% of the Federal poverty level. This too is an estimate based on 2010 census data. Using these two estimates, we can compute the number of lives per year that would be saved by Medicaid expansion.

719,000/176 = 4085

I think we can safely estimate that Corbett's decision sentences approximately 4000 Pennsylvanians to death per year, at least for the first five years (the duration of the Sommers study). These lives will be lost in order to save the state (by Corbett's estimate) $4.1 billion over eight years, while simultaneously turning down $37.8 billion in Medicaid funds from the Federal government.

Gov. Tom Corbett

As if to add insult to injury, Corbett has been extremely generous to Pennsylvania's corporate class. His budget projects that corporate tax revenues will drop $311 million (-5.9%) in 2013-14, due mostly to rate cuts in the capital stock and franchise tax beginning in 2014. He proposes to gradually phase out this tax. He also proposes to gradually eliminate the corporate income tax beginning in 2015. Corbett has pledged $1 billion in corporate welfare to Shell Oil to attract a $5 billion ethane cracker plant to Western Pennsylvania. (These are not saltines; they are dirty petrochemicals.) This plant will create hundreds of jobs, far fewer than Medicaid expansion. And Act 13, which imposes a minimal “impact fee” on natural gas drillers, has been described as “the nation's worst corporate giveaway.” Meanwhile, the Governor is not proposing to close tax loopholes, such as the Delaware loophole, which allows two-thirds of Pennsylvania corporations to completely avoid income tax.

I would argue that the humanitarian and economic arguments in favor of Medicaid expansion are overwhelming. In addition, Medicaid expansion would be easy to incorporate into a single-payer system, should the state or the nation move in that direction. I suggest that as health care advocates we immediately begin to lobby for Medicaid expansion with all the enthusiasm we can generate.

The economic logic of Medicaid expansion is so strong, and there are so many powerful economic interests that support it, I think that we will ultimately find ourselves on the winning side of this debate. Here are some of the reasons to be optimistic:

• Governor Corbett's announcement rejecting Medicaid expansion contained the hedge words “at this time,” suggesting that he may be open to changing his mind.
• He will face serious pressure from hospitals that, instead of gaining new customers, face financial losses as a result of having to provide medical services to the uninsured (“forced charity”). Other segments of the health care industry, such as pharmaceutical and medical equipment companies, are also seeing dollar signs disappearing.
• Since Medicaid expenditures ultimately circulate throughout the economy, it's likely that Chambers of Commerce and other business interests will come out in favor of expansion.
• Public opinion data collected last Summer showed 49% of Americans favor of Medicaid expansion in their state and 43% opposed. The number in favor should increase as the costs and benefits become more clear.
• The fact that several other Republican governors who initially opposed expansion, such as Govs. Brewer of Arizona, Kasich of Ohio and Snyder of Michigan, have decided to accept it has cast Corbett in the role of an ideological extremist.
• Since Pennsylvania Democrats who have spoken out so far seem to be unanimous in their support of Medicaid expansion, it may take only a few high profile Republican defectors to convince the Governor that he doesn't have majority support.
• I hedged my statement by saying “ultimately.” Even if it isn't decided to expand Medicaid this year, there is nothing to prevent Pennsylvania from accepting it in the future, should Gov. Corbett not be re-elected and the political balance of power in Harrisburg change.

However, there is no justification for complacency. The stakes for Pennsylvania's working poor are too high.

I've previously reviewed research showing that wealthy people have the greatest influence on political decisions in this country, the influence of the middle class is much less, and the influence of the poor is virtually nonexistent. This suggests that the occasional successes progressive activists have are usually due to our interests temporarily coinciding with those of much more powerful economic forces. For example, passage of the Affordable Care Act itself may have had little to do with providing health care to uninsured Americans, except insofar as this provided the cover story for a massive transfer of wealth from the government to health insurance, pharmaceutical, and other health care corporations.

Medicaid expansion is another instance in which our preference coincides with that of important segments of the economic ruling class. Our support may make a difference; we will never know for sure. But even if Medicaid expansion occurs for reasons having nothing to do with anything we say or do, this is an excellent opportunity for health care advocates to renew their faith in the effectiveness of progressive activism.

I expect more sophisticated analyses of the costs and benefits of Medicaid expansion to become available soon. Meanwhile, if you would like to reprint this analysis or if you want me to edit it down to meet your needs, please let me know.

You may also be interested in reading:

Tom Corbett to PA's Working Poor:  "Drop Dead!" (Part 1)

Tom Corbett to PA's Working Poor:  "Drop Dead!" (Part 2)

Tom Corbett to PA's Working Poor:  "Drop Dead!" (Part 3)