Single-payer versus opponents of Medicaid: Analysis of an attack

Two updates to "The Setting" posted 1/22/14. Anne Scheetz
The moral basis of the single-payer movement is that health care is a human right. We are committed to social solidarity: Everybody in, nobody out; one nation one health plan; equal access to high quality health care for every person. 
The economic basis of the single-payer movement is a commitment to evidence-based public policy, system planning to provide care where it is needed, elimination of the profit motive from medical decision making, and elimination of unnecessary bureaucracy. Automatic enrollment of every person in a single system is the most efficient way to organize care, and the only way to contain health care costs.
In this article I examine a particular conservative attack on Medicaid that is explicitly about cost and implicitly about the moral foundations of a health care system. I believe that analysis of this attack can inform our understanding of moral and practical opposition to single-payer health care so that we can better advance our agenda.
This article documents the setting of the attack; the attack; the people and groups responsible for the attack; other coverage of the issue; themes of the attack; opposing themes from the single-payer movement; conclusions; and additional sources of information.
The setting

In 2012, the Illinois legislature passed the 450 page SMART Act (the Save Medicaid Access and Resources Together Act),  which cut benefits to people with Medicaid. Active support for the Act was bi-partisan; it was signed by Democratic Governor Pat Quinn; and the administration and legislators of both parties have promoted it as a good thing.
[Addendum 2/22/14: The Black Caucus voted against the SMART Act. Tabulated votes here, and here. This article includes quotes from some black legislators. Thank you to Judy King for bringing this to my attention.]
Following the SMART Act, in June 2013, the state of Illinois awarded a contract to a private for-profit company, Maximus Health Services, to do Medicaid redetermination reviews (review each case yearly to determine whether the client is still eligible for services), with the goal of saving money by removing ineligible people from the Medicaid rolls. A September 17, 2012 article in the State Journal-Register reported on this action: "How much money that might save is only a guess. The bipartisan group of lawmakers who crafted the Medicaid reform package agreed to a target of $350 million."
The state employees' union, Council 31 of the American Federation of State, County and Municipal Employees (AFSCME), filed a grievance, claiming that the contract was illegal; that the work being contracted out to Maximus should be performed in-house by state employees.
On June 20, 2013, arbitrator Edwin H. Benn issued an opinion and award on the grievance in favor of the union. Among his findings:
  • the state violated its contract with AFSCME by the way in which it awarded the contract
  • Maximus had failed to perform as promised
  • AFSCME, using figures provided by the state, provided convincing evidence that the state would save more than $18 million per year by performing the redetermination work in-house instead of contracting it out to Maximus.


On September 17, 2013,  at a House Appropriations Committee hearing (part of which I attended) in Chicago:

  • AFSCME Executive Director Henry Bayer gave evidence that the reason state employees were behind in redeterminations in the first place was that the legislature had failed to appropriate money to hire enough people to do them
  • AFSCME re-affirmed and explained the basis for their claim that the state would save money by doing redeterminations in-house
  • Julie Hamos, director of the Illinois Department of Healthcare and Family Services (HFS), announced that the state would appeal the arbitrator's ruling, referring to the lawsuit and the arbitrator's decision as "pesky"
  • Most of the questions and comments from legislators demonstrated their support of the Maximus contract, or at least their wish that the controversy would go away
  • One legislator, LeShawn Ford, asked whether the state was not trying to expand [rather than restrict] access to Medicaid [through the Medicaid expansion under the Affordable Care Act]

    The state's testimony was supplemented by a report available here, dated September 2013; it is unclear how or when this report might have been available to reporters. [Update 1/23/14: Note from Judy King: With respect to public access to HFS' method for determining cost savings from the project, it was posted on October 24, 2013.]

    By December 1, 2013, the state (which had gone ahead with an appeal) had decided to abide by the arbitrator's decision, as reported in the press. 

    On December 17, 2013, arbitrator Edwin Benn signed a supplemental order to the June 20 opinion and award, outlining how work on redeterminations would be apportioned, from that point on, between Maximus and state workers. 


    The attack

    A September 18, 2013 Illinois Watchdog article entitled: "Illinois will continue Medicaid purge despite union lawsuit" (although the union had not tried to stop the "purge") quoted Hamos on the state's plan to appeal the arbitrator's ruling, and claimed that the ruling "would force the state to essentially stop its Medicaid scrubbing program, which is being done by a private contractor." This despite the fact that they also quoted Henry Bayer of AFSCME as saying that the state could save "millions" by doing the redeterminations in-house (the article also did not say that the arbitrator agreed with this, nor that the arbitrator had found fault with Maximus's performance). 

    On November 4, 2013, KMOV TV in St. Louis aired a segment entitled "Audit reveals half of people enrolled in Ill. Medicaid program not eligible." Senator Bill Haines of Alton was quoted: "It says that we've had a system that is dysfunctional. Once people got on the rolls, there wasn't the will or the means to get them off.” The segment also quoted Ted Dabrowski of "The Illinois Policy Institute think tank:" “Illinois is one of the most mis-managed states in country-- lists of reasons-- findings shouldn't surprise anyone.” Not mentioned: the grounds for the arbitrator's decision; the union's claim that the legislature had made it impossible to get ineligible people off the Medicaid rolls by not appropriating money for staff; problems with Maximus performance. Not quoted: anyone from AFSCME. Not questioned: whether the initial Maximus audit report was accurate. 

    A November 6 blog entry by Guy Benson on the site Hot Air was entitled: "Good news: Up to half of Illinois' Medicaid enrollees aren't eligible for the program." It attacked AFSCME for its lawsuit, and bemoaned the state's lack of money. Not mentioned: the legality of the Maximus contract; the financial grounds of the arbitrator's decision. Not questioned: whether the initial Maximus report was accurate. Not quoted: anyone from AFSCME. 

    On December 1, the Quincy Journal reported as follows: "Illinois is rewarding a private company that has found more than 200,000 people who should not be enrolled in Medicaid by pulling the firm off the job." The Journal quotes Maximus supporters Representative Patti Belloc, Illinois Watchdog,. and the Illinois Policy Institute. Not quoted: anyone from AFSCME. They provide links to the AFSCME website and to a September HFS report.

    On December 2, 2013, a Chicago Tribune editorial attacked the state's new decision to honor the arbitrator's decision, making no mention of the arbitrator's finding that the state would save money by performing the work in-house. The editorial board recommended: "The state doesn't have to roll over. It should press its court appeal, not negotiate a surrender."

    A December 18 Illinois Watchdog article claimed. "But lawmakers say the private company, Maximus, was 'a stunning success' and should have never been fired." They quote two lawmakers, Republicans Patti Belloc and Dale Righter. "Instead [of paying Maximus $37 million], Bellock said Illinois is going to spend tens of millions of dollars more to hire 500 new unionized, public employees." Not mentioned: comparative total costs of Maximus contract versus hiring state employees. Not quoted: anyone from AFSCME. The article concludes: "Illinois must now go on a hiring spree. Maximus has been told its last day on the job is April 30."


    Who are the attackers?


    • The Illinois Policy Institute (IPI), referenced by KMOV TV and the Quincy Journal, is a 501c3 corporation that describes itself as a nonpartisan research organization. Its 501c4 counterpart, Illinois Policy Action, describes itself as a nonpartisan social welfare organization that advocates for the free market ideas developed by IPI. It is one of a network of "free market think tanks"--"at least one in every state"--called State Policy Network (SPN). (See additional information below, under "Other coverage.")
    • KMOV TV in St. Louis: I could not find anything on their website that gives information about their editorial leanings or policy. Their coverage of this issue speaks for itself. 
    • The Quincy Journal  appears to be a local newspaper and news source; it also provides links to sources labeled "The Left" (The Nation, Firedog Lake, Crooks and Liars, etc.) and "The Right" (American Spectator, Fox News, Hot Air, etc.)  
    • Blogger Guy Benson is a conservative talk show host who has his own show on Fox News.
    • The Chicago Tribune is a conservative newspaper owned by the Tribune Company
    • The Heritage Foundation (referenced by Benson) describes itself as a think tank "whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense."
    •, referenced by the Quincy Journal, is a project of the Franklin Center for Government and Public Integrity, whose website is hereThe latter's mission: "to spotlight waste, fraud and misuse of taxpayer dollars by state and local governments." Watchdog claims to "dig deep into investigations;" and to use a "state-specific approach." Illinois Watchdog is their Illinois affiliate. Among their other concerns: fraud in unemployment benefits.Their frame on individual corporate tax breaks: "Republicans and conservative groups have long questioned the wisdom in having state government pick winners and losers." 
    Other coverage:
    On July 30, 2013, the (Springfield) State Journal-Register, in an article entitled "Future of Medicaid-eligibility contract in doubt," reported on the arbitrator's decision, quoting representatives from both HFS and AFSCME; and on August 7 it published an editorial doing the same. From the editorial: "And Maximus’ error rates are worth examining." The concluding paragraph: "But if the state of Illinois is going to outsource such a large and expensive project, it must ensure there is a spirit of trust, cooperation and good faith among all parties involved...."

    An August 20, 2013 article in Crain's Chicago Business, entitled "Trimming Medicaid Moves Slowly," provided details of disqualifications to date; and quoted, among others, "activists for Medicaid recipients." 

    A September 17 article in the State Journal-Register gave a factual account of that day's hearing; the article included the union's upheld claim of savings from doing the redeterminations in-house.

    Progress Illinois is in a class by itself; it's the only media source (to my knowledge) that focused specifically on the opponents of the Maximus contract. Examples of their coverage:


    • "Chicago activists speak out against public service cuts, offer alternatives," July 9, 2013, here
    • "Activists want an immediate end to Illinois' Medicaid privatization contract," August 15, 2013, here


    Progress Illinois also published an article about IPI that quoted multiple sources with varying points of view. It references a report, available here, about IPI and SPN, that traces the organizations' ties to the right-wing pro-corporate American Legislative Exchange Council (ALEC) and other groups with a similar agenda. (Information on ALEC and single-payer health care here.) One of IPI's funders is the right wing Cato Institute.  

    Steve Edwards, a retired AFSCME worker, posted a Facebook comment challenging the Tribune editorial (re-posted at the bottom of the article, here); the Tribune published on-line a letter from ISPC and PNHP member Anne Scheetz that did the same.


    Themes of the attack:

    Access to health care:

    • This September 2013 report from HFS states in part: "Forty percent of the first 105,000 people cancelled had no claims filed on their behalf in the six months before their cancellation." That is, 60% of enrollees who were canceled had used care in the past six months but are deemed no longer eligible.
    • Being ineligible for Medicaid is treated as equivalent to not needing Medicaid: Example from the Chicago Tribune: "Every dollar spent on people who are ineligible for benefits is a dollar that could have been better spent on essential state services." From the IIlinois Watchdog article: "Bellock, however, said it is the people who are in the Medicaid system who truly need the benefits that are the biggest losers [when ineligible people are not disenrolled]."

      Cost to taxpayers:

      • Blogger Guy Benson bemoans the cost of Medicaid, but says nothing about AFSCME's claim, upheld by the arbitrator, that doing redeterminations in-house will cost less than the Maximus contract.
      • The Chicago Tribune claims to be concerned with cost; but ignores the question of how the cost of in-house redeterminations compares with the cost of the Maximus contract. It also ignores the cost of the further litigation that it recommends. 
      • The Illinois Watchdog article says, "Instead [of paying Maximus $37 million], Bellock said Illinois is going to spend tens of millions of dollars more to hire 500 new unionized, public employees." Not mentioned: the union's claim, upheld by the arbitrator, that the state would spend less by doing the work in-house. 
      • No savings to taxpayers result from cancelling enrollment for people who do not use services, unless they are enrolled in managed care. In the latter case, the state is paying insurance companies more money than they are supposed to get--one of the reasons getting redeterminations done quickly is important. This line of argument is included in this HFS document. [Had Illinois not forced Medicaid enrollees into managed care, this issue would not arise.]


      • Guy Benson in his blog entry calls Medicaid: "the massive, costly federal healthcare program for America’s indigent." Also, "Within the last few months, it’s been (a) exposed as an empirical failure by the most comprehensive study ever done, and (b) expanded hugely by Obamacare, natch." The claim that Medicaid is "an empirical failure" is traced back to an article in Forbes ("Information for the world's business leaders") about Oregon Medicaid. The reference to Obamacare (the Affordable Care Act, or ACA) is to the fact that most sign-ups for health insurance after its roll-out were for Medicaid. The blog entry about ineligibility begins "Good news."
      • The Heritage FoundationMedicaid is a prime example of government’s inability to outperform—or even keep up with—the private sector. Policymakers should reform Medicaid to allow Medicaid patients access to private insurance in a consumer-driven market
      • The wording of the title of the SMART Act is itself an attack on Medicaid and the people who receive it: "saving Medicaid" implies that the legislation is for the benefit of those people, whereas in fact it takes away necessary benefits, and also that there are no other means available to "save" the program; "together" implies that this somehow involves all of us (including legislators)--although only poor people, their families, and those who care for them are directly hurt and by any accounting are hurt by far the most.
      • Again, from the Benson blog: "Medicaid is the textbook definition of "junk" coverage. Yet they’re [Obamacare supporters] also resolutely in favor of doubling down on this failing government program— which provides genuinely horrible access and lousy care.  It’s almost as if results and evidence don’t matter to the Party of Science." The link from "horrible access" is to a Heritage Foundation article about worse outcomes among people with Medicaid compared to those with private insurance.
      • The Benson blog speaks of "massive waste and fraud;" corporations are not mentioned as a source of such abuses.  
      • The Illinois Policy Institute's position on Medicaid includes the following: eligibility standards are too loose, allowing people who are not actually in poverty to enroll (no definition of "poverty" is given; no discussion of cost of living related to income or of the cost of health care; no evidence is given for their claim); patients should be given a "choice" among provider networks and managed care organizations; insurance plans should be given "flexibility" in their benefit designs. 
      • [Note: Right wing think tanks demand that Medicaid enrollees be given access to private insurance in a consumer-driven market. This is exactly what the ACA/Obamacare also claims to do. Right wing think tanks consistently attack the ACA/Obamacare.]


      • The Benson blog entry, referring to the Maximus contract: "The early findings of an ongoing review of the Illinois Medicaid program revealed that half the people enrolled weren’t even eligible." Maximus's findings are not examined,, but are treated as definitive.
      • The Quincy Journal: "Illinois is rewarding a private company that has found more than 200,000 people who should not be enrolled in Medicaid by pulling the firm off the job." And: "the same job that Maximus has been successfully working at for more than a year." 
      • None of the attackers addresses the issue of Maximus's performance or cost--Maximus gets a free ride.
      • The Illinois Policy Institute does not list any policy statements on corporate responsibility or accountability, corporate tax breaks, privatization, or income inequality.

      Organized labor

      • Benson's blog refers to: "Big Labor."
      • Illinois Watchdog (September 18) refers to "AFSCME boss Henry Bayer" instead of using his title, which is Executive Director. 
      • Illinois Watchdog (December 18) calls the hiring of state workers (accepted by the arbitrator to cost less than the the private contract) "a hiring spree."
      • The attackers consistently fail to mention the arbitrator's finding that the Maximus contract violates the state's contract with AFSCME.  
      • The Illinois Policy Institute's position, here, is that Illinois labor law empowers "government unions" at the expense of "taxpayers."  [Public employees are apparently not recognized as taxpayers.]

      Beyond health care:

      The Illinois Watchdog article: “Maximus is also looking at (the SNAP program) and they’ve removed thousands and thousands of people off that,” Bellock added. Nearly 2 million people in Illinois are on food stamps." HFS on Maximus scope of work here


      Opposing themes form the single-payer movement 

      The single-payer movement maintains that health care is a human right. Everyone needs access to health care. 

      A national or state single-payer health program would save governments and individual taxpayers billions of dollars; it is the only way to contain costs.

      Medicaid creates an enormous wasteful bureaucracy not because it is a government program but because it requires dividing people into those who are eligible and those who are not.

      Medicaid provides access to some health care for people who would not otherwise be able to get it, and it protects people from financial distress. It is, however, no where near good enough. 

      Physicians for a National Health Program Policy Fellow Don McCanne summarized the study of Oregon Medicaid this way: "The Oregon Experiment unequivocally demonstrates that Medicaid improves access to care and provides considerable financial protection for the low-income population that it serves. Although it was not powered to demonstrate statistically significant improvements in health outcomes...." and concludes finally: "these numbers are still not good enough. With a well-designed single payer system, we could do much better."

      States' budget problems are not due to rising costs of Medicaid, but rather to declining revenue, according to a report from Georgetown University's Health Policy Center for Children and Families, here.

      Equal access to health care is an aspect of social justice.



      This and other attacks on Medicaid are not about cost. Even within the narrow parameters created by the attackers for this discussion, evidence that state employees can do redeterminations more cheaply than Maximus was ignored.  

      The attacks are anti-government when government is helping people; pro-corporate (they do not propose to hold Maximus accountable even for fulfilling the terms of its contract); and anti-labor (they demand that the state break its contract with the union, and ignore evidence that state workers can do a better job than the private contractor).

      The attackers routinely ignored information that was readily available; in no case did they perform any "deep investigations."

      The attackers attribute waste, fraud, and corruption to people who are trying to get health care, which they need whether they meet the state's eligibility criteria or not, but not to a corporation that fails to fulfill its contract.

      This controversy reveals that the economic basis of the SMART Act is unsound. The legislature decided how much money they wanted to save, and assumed they would save it, without adequate data (the data didn't exist). Medicaid enrollees are paying for this self-deception.. 

      The profit motive has no place in the determination of eligibility for any public benefits, just as it has no place in the provision of health care. Investor-owned for-profit corporations are responsible to their investors, not to the taxpayers, not to clients. Corporations engage in illegal activity routinely, and treat penalties as a cost of doing business;; they will be encouraged to do this especially when the people they hurt face numerous obstacles to fighting back. Public employees doing this work are responsible to the public, and required to obey the law.  

      The cost of health care cannot be addressed outside of a single-payer system. All attempts to contain cost that do not eliminate health insurance companies from the financing of health care are doomed to failure. Only the single-payer movement is willing to acknowledge this fundamental fact. 

      Where are the people? Who are the people who are disenrolled from Medicaid, legitimately or illegitimately? How will they get health care? For legislators, for the attackers, even for the more neutral press, these people seem scarcely to exist except as they are deemed to be trying to get something they have no right to; certainly they are not worthy of consideration, certainly they are not part of "we are one." As former caseworker Steve Edwards has said, he has met people who sought benefits but did not qualify; he has never met anyone who sought benefits but didn't have legitimate needs.

      The entire enterprise of denying people access to health care is immoral. It is essential that the single-payer movement continue to speak out about this always. It is essential that we continue to seek out those who will join us in the struggle to make health care as a human right a reality. It is also essential that we support those whose right to health care is most in jeopardy and who are fighting back.


      Background sources:

      HFS website description of the Illinois Medicaid Redetermination Project, and links to quarterly reports, here

      HFS report on the methodology for calculating cost savings from the Redetermination Project here. Quotes:


      • Savings have been less than some legislators hoped but in line with HFS' forecasts because most of the people cancelled are relatively low users of Medicaid services. Forty percent of the first 105,000 people cancelled had no claims filed on their behalf in the six months before their cancellation. So far, annualized savings on these clients are about $44 million (just in the first 5 months: April - August). This is a per month savings per cancelled client of $58.
        • Seventy five percent of the cases cancelled are because the client has failed to respond to the letter asking for additional information. When the electronic data sources do not yield enough information to confirm eligibility, a letter is sent to the client seeking additional information. Clients likely don't respond to the letter either because they know they are no longer eligible, or because the mail never reaches or is opened by them.
        • The improvement in enrollment integrity is essential for the transition to managed care. Under the current system, Medicaid pays only for services actually used. Under managed care, the State will pay a capitation whether or not services are used. We will realize substantial cost savings by keeping eligibility files clean.


        AFSCME report from December 18, "Arbitrator's order will end wasteful outsourcing."

        The Illinois Center for Tax and Budget Accountability (CTBA); a report entitled "Flawed tax policy is the primary driver of Illinois' Recurring General Fund Deficits" could not be accessed on January 10, 2014, but may be available later at the link above. . 


        The SMART Act, from page 1:

        Section 5. Purpose. In order to address the significant spending and liability deficit in the medical assistance program budget of the Department of Healthcare and Family Services, the SMART Act hereby implements changes,improvements, and efficiencies to enhance Medicaid program integrity to prevent client and provider fraud; imposes controls on use of Medicaid services to prevent over-use or waste; expands cost-sharing by clients; redesigns the Medicaid healthcare delivery system; and makes rate adjustments and reductions to update rates or reflect budget realities.
        My thanks to Steve Edwards, Judy King, Kathy Powers, and Tom Wilson for referring me to various documents. All errors are mine alone. This article represents my research and opinions, and has not been approved by ISPC.
      Anne Scheetz is a physician who retired from clinical practice in 2010 in order to volunteer full-time working for single-payer health care. She is a member of PNHP and ISPC.
      [This document is also published as an article where you can leave comments, here. The Editor.]


        Post about us!