Health Care/Joan Retsinas

The Scrooge Award

It's only summer, and already contenders are lining up for the Scrooge Award, given to the governmental office that most emulates the Great Miser. He raised frugality to a virtue -- one that trounced the other virtues, like compassion.

The first contender is a surprise: the federal government. Frugality doesn't come to mind in a word-association test with "federal government"; think deficit, tax cut, war, bonanza (for drug companies, defense industries and millionaires). But the administration has tapped into a vein of frugality. Medicare will be adding a drug subsidy -- a limited one, but a subsidy nonetheless. Yet many Medicare enrollees already get a food stamp subsidy. Two subsidies for the poor! How profligate! So this Scrooge-contender opted to reduce food stamps for people getting drug subsidies.

Two months ago enrollees poor enough for food stamps cheered: The federal government was going to help with their drug tab. That cheering was premature. The federal government will help with drugs, but will ratchet down food stamps. Robert Pear (New York Times, May 7) described the tradeoff, taken from the Medicare guide.

Imagine a Medicare enrollee with a monthly income of $798 from Social Security. Assume that the enrollee pays $51 a month for 3 medications. Under the new Medicare plan, she will pay a $3/month co-pay for each prescription. Her monthly drug tab will drop, from $51 to $9 -- a $42 saving. Not much by Enron standards, but presumably she will be happy. At that income, though, she's been getting $27 a month in food stamps. A double-boondoggle! The feds rush in -- and that enrollee's food stamp stipend will drop to $10. Her net savings, thanks to a thrifty Uncle Sam, will fall to $25 a month.

New Hampshire vies with the feds for the Scrooge award. Medicaid is a costly insurance program for people who are poor enough to qualify. (States set the eligibility levels.) States and the federal government share the tab; the federal government pays more to poorer states. This year the federal government pared its commitment to Medicaid -- leaving states to pick up the shortfall.

Most states have proposed the usual balance-the-budget measures -- raising eligibility levels to serve fewer people, limiting payments to providers, reducing the benefits themselves. Cutting programs for poor people comes easily to bureaucrats. After all, the poor can't hire lobbyists to protest cutbacks.

New Hampshire took frugality more seriously: It has proposed charging premiums to very poor people, even the penniless. Other states have charged premiums, but haven't charged the poorest of the poor. Federal law prohibits charging this sector. New Hampshire's Health and Human Services Commissioner, though, is bold: Why not charge the very poor? Under his proposal, families with no income would pay $10/month/per child, up to a maximum of $30. Families with minimal income would pay $20/month/child, up to $60. The state would save $12 million a year (0.1% of its budget).

At first, this plan seems absurd: If people have no money, how can they afford to pay for care? What if the poor bypass seeing a physician because they have no insurance? The government launched Medicaid to promote a healthy populace. New Hampshire's premiums may make sick residents sicker. Scrooge would be impressed: While he thought the poor should go to poorhouses, he never proposed charging them rent.

Of course, New Hampshire's charge-the-poor initiative is just a suggestion. The state legislature has not yet approved the plan. If legislators back off, the federal government will win the Scrooge award.

The ultimate Scrooge winners, though, may be the American taxpayers, who have made it clear that Scroogian policies will not endanger elected officials. The solons who raise taxes risk defeat in the polls, not the ones who trounce on the poor.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email

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