The Real-Life Costs Of Shrinking The Democrats’ Big Spending Plan

Poor people need insurance. Seniors need dental care. And there may not be money for both.

A discernible, long-simmering tension among some generally like-minded Democrats has spilled into public view in the past few weeks. It’s about two health care initiatives in President Joe Biden’s “Build Back Better” legislation ― and the likelihood that there won’t be enough money to fully fund both.

One is a proposal to insure as many as 2.2 million Americans living below the poverty line, or just above it, in a dozen, mostly Southern states. These people are supposed to get coverage through an expanded version of Medicaid, the government program for low-income populations, thanks to extra federal funding that the Affordable Care Act has made available. But the GOP officials who run those states have refused to take the money.

Now Democrats are talking about having the federal government fill this “Medicaid gap” by somehow covering these people directly. And nobody is pushing for that approach more visibly than House Majority Whip James Clyburn (D-S.C.), who has promoted it as a way both to reach some of America’s most vulnerable people and to address long-standing racial disparities in health status.

“This is a moral issue for all Americans,” Clyburn wrote in an op-ed for Black Press USA this week. “I don’t want this President and this Congress to ignore existing racial inequities.”

The other proposal would bolster Medicare, the federal insurance program for the elderly, by adding vision, hearing and dental benefits. The lack of these features means extra costs for seniors, and puts the program at a disadvantage relative to privately run Medicare Advantage plans that have been drawing away more enrollees.

Sen. Joe Manchin (D-W.Va.) has pressed to limit the size of the Build Back Better bill, in ways that would force leaders to scale back key proposals -- and likely eliminate some altogether.
Sen. Joe Manchin (D-W.Va.) has pressed to limit the size of the Build Back Better bill, in ways that would force leaders to scale back key proposals -- and likely eliminate some altogether.
Bill Clark via Getty Images

The most high-profile advocate for this initiative is Sen. Bernie Sanders (I-Vt.), partly because he sees it as a step toward his ultimate goal: creating a “Medicare for All” program that would seamlessly and generously cover people of all ages. But he has also emphasized the chance to help seniors who currently can’t pay for their dental care. Many live in pain and ultimately require tooth removals. Some end up with even more serious medical problems.

“This, to me, is non-negotiable,” Sanders said at a press conference this week.

Sanders wasn’t directly addressing Clyburn with those remarks, just as Clyburn wasn’t addressing Sanders. The two are allies, broadly speaking, long dedicated to the cause of guaranteeing health care as a basic human right.

But fully funding the two programs, alongside yet another provision to shore up the Affordable Care Act, would cost hundreds of billions of dollars over the next decade. That would be a lot even in the context of the $3.5 trillion legislation Democratic leaders initially envisioned, let alone something closer to $1.5 trillion, which is what holdout Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) have been demanding.

The dilemmas Biden and Democratic leaders face over which health care programs to fund are the same ones they face as they contemplate what to do with other Build Back Better initiatives, like those that would underwrite early childhood programs, housing assistance and alternative energy. Is it better to fund fewer programs at higher levels, or more programs at lower levels? To target scarce funds toward those who need the most help, or to invest in universal programs that might be simpler and touch more people directly?

There are no easy answers to these questions, because every Build Back Better proposal has powerful supporters and sound political logic. And every one addresses a real need.

A Glimpse Into The ‘Medicaid Gap’

For Clyburn, and many of his allies in Congress, filling the “Medicaid gap” isn’t simply a matter of principle. It’s also a way to help constituents.

Roughly 13% of South Carolina’s non-elderly population had no health insurance as of 2019, according to the U.S. Census Bureau. That figure was several points higher than the national average, and it probably underestimated the number of uninsured in Clyburn’s district, which includes some of Columbia and Charleston’s poorest neighborhoods.

Studies over the years have documented the hardships people face when they have no insurance. Stuart Hamilton, a South Carolina pediatrician and founder of the Columbia-based Eau Care Cooperative Health system, has seen them firsthand ― often when treating people who are in the advanced or even fatal stages of a disease because they never got basic care.

“Heart attacks go up, strokes really go up, especially in the near-elderly with untreated blood pressure,” said Hamilton, who retired from active practice three years ago. “And it’s all preventable.”

Lack of insurance also affects people’s finances, by saddling the uninsured with crushing medical bills or making it difficult for them to hold down jobs ― as Jeff Yungman, a staff attorney with a Charleston-based homeless organization called One80Place, explained in an interview.

“So many of the people we see here in the shelter, it’s not because of drug abuse or mental illness,” he said. “It’s because they haven’t had appropriate health care and they have health issues that have forced them not to be able to work and not to be able to pay their rent.”

“Heart attacks go up, strokes really go up, especially in the near-elderly with untreated blood pressure. And it’s all preventable.”

- Stuart Hamilton, Columbia-based pediatrician, on people living in the "Medicaid gap"

In theory, many of these people are eligible for disability payments. In reality, Yungman says, many struggle to get those payments because they don’t have the documented medical history that applications require.

“If you say you have a bad back, you have to show that you’ve been seeing a doctor for a bad back,” Yungman said. “And a very high percentage of these folks ... they can’t afford a doctor, they can’t afford to go to the clinics, they can’t afford to buy the medication. So we’re hamstrung trying to get them approved for benefits.”

It’s not hard to imagine what a difference Medicaid would make for such people.

Researchers have repeatedly found that people who get Medicaid are healthier, end up more financially secure and get more access to care, relative to people with no insurance. One especially definitive paper found that Medicaid expansion saved one life for every 200 to 300 adults who got coverage ― which means, in theory, that bringing expanded Medicaid to states that don’t have it could save a few thousand lives every year.

“It’s hard to imagine a health policy that would do more good dollar-for-dollar than ensuring people below the poverty line can go to the doctor without worrying about how they’re going to pay for it,” Matthew Fiedler, a fellow from the USC-Brookings Schaeffer Initiative for Health Policy, told HuffPost.

Two Causes, Two Iconic Champions

Strengthening Medicaid’s life-saving potential, plus the allure of extra federal funding, has been enough to entice GOP leaders in states like Arizona and Michigan to expand the program. But the resistance among South Carolina state officials remains strong, to the great frustration of Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center.

“We are constantly hearing from people who reach out to our office and say, ‘I can’t get health care, what do I do, I applied for Medicaid and I got turned down,’” Berkowitz said.

But if the prospects for action from officials in states like South Carolina haven’t changed, the possibility of federal action has ― and not simply because Democrats finally control both the presidency and Congress for the first time in a decade. They owe their Senate majority to the wins in Georgia by Jon Ossoff and Raphael Warnock, both of whom made health care a focus of their campaigns. Warnock has become the Senate’s most vocal advocate for filling the Medicaid gap.

House Majority Whip James Clyburn (D-S.C.) has said getting insurance coverage to low-income uninsured people in non-expansion states should be a top priority, especially given the potential to address racial inequities.
House Majority Whip James Clyburn (D-S.C.) has said getting insurance coverage to low-income uninsured people in non-expansion states should be a top priority, especially given the potential to address racial inequities.
SAUL LOEB via Getty Images

But the critical push has really come from the House. And Clyburn is as responsible for that as anybody, casting a Medicaid gap plan as a way to help poor people gain wealth, to shore up the finances of struggling rural hospitals and ― especially ― to promote racial equity. Of the 2.2 million uninsured people who would be eligible for Medicaid if their states expanded, nearly 60% are Black or Latino, according to estimates from the Center on Budget and Policy Priorities.

Clyburn’s moral authority ― as a longtime civil rights advocate and the second ever African-American to serve as whip ― goes a long way toward explaining how the Medicaid gap is still in the policy mix for Build Back Better. So does Clyburn’s clout with the White House, where everybody remembers the pivotal role his endorsement played in helping Biden win his party’s South Carolina 2020 primary and, eventually, the Democratic nomination.

But Sanders has his own kind of authority, as a progressive champion whose persistence and organizing success has forced Washington to take his ideas seriously. He also has his own sway with the White House ― in part, again, because of his role in the 2020 primaries, when he passed up opportunities to beat up on Biden as too moderate. Later, Sanders worked with Biden on a joint agenda. It didn’t insist upon Medicare for All, but included several proposals related to Medicare.

The most well-known of these, a proposal to lower the eligibility age, has basically fallen out of the legislative conversation ― in part because lawmakers struggled to deal with politically fraught topics like how to avoid undermining existing employer insurance for people who like it. In response, Sanders and his top allies, like Rep. Pramila Jayapal (D-Wash.), have pushed even harder for adding benefits, especially dental.

“Last time I checked, your teeth are part of your body — and should absolutely be covered by Medicare,” Jayapal tweeted in late August. “Let’s get this done.”

Teeth, Health And Politics

Advocates and policy experts have been warning for months that, given the likely fiscal constraints on a spending bill, funding both Medicare dental and a Medicaid gap plan was likely to be difficult. And as the possibility has become more real, Clyburn has presented the trade-offs in increasingly stark terms ― seizing on the fact that a Medicare dental benefit would cover all recipients, even wealthy ones, and warning of its racial implications.

“What is the life expectancy of Black people compared to white people?” he told Axios’ Caitlin Owens earlier this month. “I could make the argument all day that expanding Medicare at the expense of Medicaid is a racial issue, because Black people do not live as long as white people ... If we took care of Medicaid, maybe Black people would live longer.”

By and large, supporters of Medicare dental have refrained from publicly responding to such statements. Nor have they downplayed the importance of reaching people in the Medicaid gap ― partly because they, too, feel strongly about insuring low-income people in places like South Carolina.

At the same time, they bristle at the idea that the dental benefit has less value, given widely documented problems with dental care among the elderly.

Almost half of Medicare beneficiaries have no dental coverage at all, according to estimates from the Henry J. Kaiser Family Foundation, and the proportions are even higher for Black (68%) and Hispanic (61%) Medicare beneficiaries. Even those with policies frequently have co-pays, yearly caps on coverage or both.

Sen. Bernie Sanders (I-Vt.) has pushed hard to add a dental benefit to Medicare, noting the large number of seniors who currently lack dental insurance.
Sen. Bernie Sanders (I-Vt.) has pushed hard to add a dental benefit to Medicare, noting the large number of seniors who currently lack dental insurance.
Win McNamee via Getty Images

As a result, poorer seniors end up going without dental care until problems become acute, requiring extractions or creating dangers in other parts in the body, since an infection in a tooth can spread via the bloodstream. It happens that way all over the country, and it happens that way in South Carolina.

“We definitely have quite a few people from an older population, people with Medicare but no dental insurance, who come in,” said Dallaslee Ruquet-Emrich, senior manager of health services at East Cooper Community Outreach, a social services organization that serves low-income communities to the east of downtown Charleston. “A lot of times they didn’t know they had such serious problems, until it’s too late.”

“It’s pretty woeful, the discrepancy between what older people need and what they can afford,” said Mark Barry, who manages the East Cooper dental clinic. “You see people at the end of the game ... they have periodontal disease or they have abscess teeth or they have broken-down teeth that need to be taken out. And so many of those things could have been prevented.”

The reality is that most Democrats working on health care, and most advocates working with them, would vastly prefer to take both steps, filling in the gaps of Medicaid and Medicare alike, as Eliot Fishman, senior director of health policy at Families USA, recently told HuffPost.

“The same low-income communities where women are dying or getting hospitalized after childbirth, and children are losing Medicaid due to eligibility paperwork, are the communities where adults have no access to health care in non-expansion states,” Fishman said. “And they are the same communities where a third of seniors are losing all of their natural teeth.”

That’s one reason Democratic leaders have discussed downsizing the initiatives somehow, so there would be enough funding in Build Back Better for both. That could mean funding the Medicaid expansion for only a few years or scaling back the dental benefit (by, for example, charging higher premiums, leaving higher out-of-pocket costs and limiting it to prevention at least for the initial years).

“A lot of times they didn’t know they had such serious problems, until it’s too late.”

- Dallaslee Ruquet-Emrich, East Cooper Community Outreach, on dental problems among the elderly in Charleston.

There are also some policy tweaks that could make things a lot easier. Fiedler, from USC-Brookings, proposed a change to the dental policy formula that could dramatically reduce its cost without affecting benefits.

These are the same sorts of options that Democrats are contemplating as they figure out how to fund other programs in Build Back Better, despite all the pressure to spend less. But every option has serious drawbacks.

“Sunsetting” the Medicaid expansion after, say, five years could mean the program’s renewal would depend on approval from a future Republican Congress or Republican president ― neither of which feels like it could be counted upon, given recent history. And reducing the dental benefit could leave seniors with such high costs that they would get frustrated with the coverage, or at least find it underwhelming.

The Big Questions About Build Back Better

Lurking behind this is a question that applies to everything under consideration in Build Back Better: whether it even makes sense to try and fund so many options, rather than focusing on a small handful and doing them well.

There’s an argument that spreading the money too thinly will create a bunch of unsatisfactory initiatives that simply fuel cynicism about government, without actually making a big impact on any problems. There’s also a counterargument that change in the U.S. is always incremental ― and that scaling up existing initiatives is easier than launching new ones.

Politics is a big consideration, too, and that’s by necessity. Democratic leaders want to create programs that will survive future, almost inevitable attempts at defunding or repeal by Republicans ― and, ideally, restore the faith in the public sector that has waned over the past few decades. Democrats would also like something they can show voters in 2022 and 2024, as proof they can govern.

But figuring out which policies would best accomplish those goals is complex, as The Washington Post’s Paul Waldman and Greg Sargent noted recently. A dental benefit for Medicare would reach many more people, targeting benefits at older Americans who vote in high numbers ― and many of whom might not otherwise vote Democratic. Filling the Medicaid gap would matter in states where Democrats have struggled, and let the party’s newly elected Georgia senators deliver on a signature promise.

And all of that assumes the policies work as well as advocates hope. Creating new benefits for Medicare would be complex under the best of circumstances, as would devising a federal stand-in for Medicaid. If lawmakers are crafting these policies on the cheap, they may try to save money in ways that ultimately undermine program effectiveness.

The one clear thing is that the choices would be a lot easier if Build Back Better had more funding ― which is precisely what Manchin and Sinema are arguing against.

Those two (and a handful of other Democrats quietly agreeing with them) object to some of the specific policies in the legislation. They also argue that the cost of all these new programs is more than the government, and by extension the taxpayers, can afford.

Those are fair arguments, with which plenty of Americans agree. But when it comes to basic health care for the poor, dental care for the elderly or any of the other items in Build Back Better, inaction can have costs of its own.