HEALTH CARE/Joan Retsinas

Medicaid and The Minimum Wage: Scylla and Charybdis

Pity the Republican governors who rejected the chance to expand Medicaid under the Affordable Care Act. They are trapped, unable to escape the Government they profess to loathe.

Seventeen governors rejected the advances of Uncle Sam, even when he offered initially to pick up the full tab for the extra Medicaid enrollees. (Five governors are still considering the option.)

The free ride didn’t matter. The governors still responded: “Never.” Big Government was, in the end, Big Government; and these Governors spurned the quasi-socialist outreach, regardless of the number of their residents who would remain without health insurance. Perhaps the governors espied election-year advantages in clinging to small-government principles. Perhaps they feared a more right-wing opponent in the coming election. Perhaps they thought that their states could insure these uninsured people, somehow, without Uncle Sam. Optimistically, they may have expected Fast Food Nation and all the other enterprises built on the low-wage labor of mostly part-time workers to give those workers health insurance. Whatever the governors’ rationale, they clung with a Pyrrhic intensity to their principles: no additions to their Medicaid rolls.

Not surprisingly, those governors’ uninsured constituents are dropping into the “Medicaid gap”: too poor to get subsidies under the Affordable Care Act policies, too “rich” to get insurance under Medicaid. “Rich” of course is a bizarre term to describe people working sometimes two minimum wage jobs, eking out a living, hoping that Food Stamps and rental subsidies will keep their families afloat.

In the upcoming elections, as these principled solons tout the low taxes, the high employment, the fiscal rigidity of their states, expect an opposition to counter with misery statistics: number of people without insurance, number of people denied care, morbidity figures. Maybe an enterprising reporter will spotlight the tale of a man with diabetes who has a limb amputated. The suggestion will be that with medical oversight, he might still be walking on two feet. Or the tale of a woman whose breast cancer was detected too late for treatment. Surely the “red” states will yield a few such tales.

But ironies abound in the bizarrely complex world of Obamacare.

One solution – one that would delight a cynical Uncle Sam – would be to raise the minimum wage. If only those minimum-wage workers earned more money, they might nudge upward into the Affordable Care Eligibles camp. In short, they could get health insurance under the Act, with subsidies tied to their still-low incomes. They would no longer fall into their states’ “Medicaid” gap. A win-win: The Governors would not need to fret that the number of uninsured in their states had risen. And those states’ Medicaid rolls would not have risen either. But the legions of employers dependent on low-wage labor are not rushing to raise the minimum wage. They have lobbied to stall any such legislative initiatives. So those Governors, committed to spurning Uncle Sam, will have to enact their own government fiats to force employers to pay more money to workers.

Indeed, the Affordable Care Act may even indirectly prompt a back-door increase in wages. Some employers in states that refuse to expand Medicaid may end up paying a hefty penalty per employee, which amounts to a per-employee increase in labor costs – analogous to a boost in wages.

Uncle Sam might be chuckling as governors navigate between the Scylla of Obamacare and the Charybdis of minimum wage increases.

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

From The Progressive Populist, May 1, 2015

Blog | Current Issue | Back Issues | Essays | Links

About the Progressive Populist | How to Subscribe | How to Contact Us

Copyright © 2015 The Progressive Populist
PO Box 819, Manchaca TX 78652