Last Thursday, Governor Ned Lamont announced a plan under which the state would give $20 million to a non-profit which, in turn, would use the money to buy $2 billion in uncollectible unpaid medical bills from the state’s hospitals, and, then forgive the debt.
That would seem a good deal, with such a small cost to forgive so much debt.
Yet, at one cent on the dollar, it is a huge $1.98 billion loss for the state’s hospitals. But they appear to be willing participants, because they haven’t been able to collect this debt and may already have written it off.
The Bernie Sanders of the world will rejoice, because the debtors will wind up having received essentially free health care.
But we should remember the donation-seeking credo of the non-profit Connecticut Mirror newspaper which broke the story: “Free to Read. Not Free to Produce.”
This medical care may wind up being free to these patients, but it was not free for the hospitals to provide. There is no such thing as “free.” Someone always has to pay.
This is where the rest of the state’s citizenry should pay attention, because they are the ones who will pay. The hospitals won’t take a $1.98 billion loss; they will recoup the money by raising prices charged bill-paying customers, whose health insurance premiums will escalate as a result. It is called “cost-shifting.”
Ned Lamont may be using just $20 million of federal money from the American Rescue Plan this time, but the next time – do you doubt that there will be a next time – he will have to get the money from taxpayers. And maybe the hospitals will want 10 or 20 cents on the dollar.
This is not even remotely the way it is supposed to work, even within our very imperfect national and state health care system.
The patients in this case are most likely poor citizens. The poor in this country are supposed to be covered by Medicaid. Medicaid should be paying the lion’s share of the $2 billion in bills. Medicaid, by the way, is a joint federal-state program under which the federal government bears most of the cost.
Why is Lamont stepping in with state money to pay even a trivial percentage of these costs, when, likely, Uncle Sam should be paying the full amount? Connecticut taxpayers should demand an answer.
Indeed, there are many unanswered questions at this point. Lamont announced his proposal with only the sketchiest of information.
Who are the debtors who aren’t paying their bills?
Poor citizens are eligible for Medicaid. So are poor “lawfully present” non-citizens. That leaves poor unlawfully present non-citizens, right?
Yet, maybe the debtors are citizens and lawfully present non-citizens, who are simply not enrolled in Medicaid. Why aren’t they? Is the enrollment process so irretrievably dysfunctional in Connecticut that $2 billion has accumulated of bills that should have been covered by Medicaid. If so, fix the enrollment process!
Maybe these debtors are eligible, but have refused to enroll, because they do not want to pay the extremely modest premiums, co-pays and deductibles charged by Medicaid… nor the hospital bills in question.
There are some very basic unanswered questions. How did this debt accumulate? In which hospitals? For what kinds of treatment? Over what period of time?
Undoubtedly, the $2 billion figure is made up of “list prices” that virtually no one actually pays, since Medicaid has price caps for all the services it covers, as does Medicare, and private health insurers negotiate large discounts from list for the beneficiaries they cover.
For those unfortunate citizens who do not qualify for Medicare or Medicaid or Obamacare and do not have employer-provided health care coverage and cannot afford an unsubsidized individual health insurance policy, “list prices” are a nightmare. Does this describe the debtors who owe the $2 billion?
Maybe the debtors were not poor, but rather insured people who sustained a medical disaster which has buried them with co-pays and coverage limits? The solution here is not free health care, but rather supplemental catastrophic coverage.
Lamont needs to provide answers. If Medicaid is not operating the way it should, Lamont should tell us.
If Medicaid is the problem and this proposal goes forward, then this year’s $2 billion may turn into next year’s $3 billion. Why should anyone bother to enroll in Medicaid, if they can just go to the hospital, receive treatment and wait for the bill to be forgiven.
There’s no difference between free health care for which no bill is rendered and health care for which the bill that is rendered is almost automatically forgiven. Both are pure socialized medicine.
Of all states, deeply indebted Connecticut is the last state that should be experimenting, without federal help, with socialized medicine and its enormous costs.