HEALTH CARE/Joan Retsinas

Rich States, Poor States, Cheap States

Justice Louis Brandeis called states "laboratories of democracy." States, though, are looking more and more like laboratories of cheapness.

States have Brigadoon moments -- think of the presidential party conventions, where delegates from "the great state of X" rise to throw their state's support to a favorite son.

Outside the conventions, many states are not so much "great" as beleaguered. They struggle with competing demands from warring constituencies; and the poor are the weakest of fighters.

Consider Medicaid, the program that provides medical insurance for low-income families. Before 1965, when states were solely responsible for public insurance, many states assumed no responsibility for health insurance, interpreting "states' rights" as the right to ignore their poor residents. Still other states provided minimal benefits, and paid minimal fees to providers. And some states hewed eligibility, benefits, and payments to segregationist doctrines.

So Congress designed Medicaid in 1965 as a state-federal partnership. Although Uncle Sam sets floors for eligibility, benefits and payments, states have leeway to raise that floor. Since states pick up a percentage of the tab (roughly half, with poorer states paying less), this seemed fair to the law's architects. In contrast, Congress designed Medicare, which covers seniors, as a federal program: whether you live in Idaho or New York, the rules are the same.

Forty years later, when enthusiasm for federal programs is at a nadir, and politicians are wooing citizens from the "great states," particularly the great states with lots of delegates, Public Citizen's Health Research Group ( has re-examined Medicaid. Their conclusions shatter the sanguine assumption that this state-federal partnership takes care of the poor. States may be laboratories of democracy, but they are not laboratories of beneficence.

Eligibility is a crucial measure of effectiveness: an insurance program aimed at the poor should cover most of the poor. But stringent and cumbersome eligibility rules can weed out people -- on the one hand, sparing the budget, on the other hand, dumping more people into the ranks of the uninsured. The Health Research Group constructed an index of "eligibility" and ranked each state according to this index. The top score was 350. States have considerable latitude: a person eligible for Medicaid in Rhode Island, the top-ranked state, would probably not be eligible in Alabama, ranked 50th. Yet even Rhode Island did not score 350: it scored 296.8. As for Alabama, it scored 91.6. The lower the score, the tighter the net. In some states, very poor people won't get onto the Medicaid rolls.

Scope of services was the most complex index, since it factored in not only the "optional," non-mandated services (like rehabilitation), but the cost-sharing and time-limitations imposed on different categories of enrollees. The top score for scope of services was 200, marking the most expansive scope. New York (score 158.3) ranked the highest; Mississippi (66.8), Oklahoma (71.7) and Alabama (71.9) brought up the rear.

Reimbursement is important: in states that pay sub-market fees physicians may refuse Medicaid patients. Alaska, Delaware and Nevada scored highest; New Jersey, New York and Rhode Island scored lowest.

The final index -- quality of care -- was the most difficult to construct; the Research Group used nursing home quality-of-care data. They found that the top-ranked states (Massachusetts, Rhode Island, Ohio, Florida, Nebraska) still scored low, while the two lowest-ranked states (Idaho, Oklahoma) earned negative scores.

Overall, the Health Research Group considered eligibility the key measure, and weighted it accordingly. From this mega-measure, Massachusetts emerged, for beneficiaries, as the "best"; Mississippi, the worst.

The rankings are no surprise. Periodically different groups issue report cards on education, pollution, health care, welfare benefits and services to children; and some states emerge as "better" than others. Not surprisingly, poorer states generally score lowest.

This summer, all the presidential wanna-bes are trekking across this country's great states, courting delegates. The standard stump speech decries bloated or heartless or inefficient (fill in the adjective) "big government" and praises state initiatives. Even great states, though, have been less than great in helping poor residents.


From The Progressive Populist, August 1, 2007

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