Sunday, May 1, 2011

The New York Times: The Ryan Plan for Medicaid

Whatever you call this, it's not reform and -- except to its victims -- it's not serious. It is a thinly disguised way for the federal government to wash its hands of the health care needs of 60 million Americans by driving them further into poverty.

The real problem with Medicaid is that it is being overwhelmed by an economy that generates poverty as rabbits generate more rabbits. Today, more than 60 million Americans receive Medicaid, and many economists and sociologists argue that the United States' antiquated definition of poverty keeps as many as 30-60 million more from Medicaid eligibility.

The GINI coefficient has measured income inequality since the 1920s. Without going into a lengthy statistical discourse, the closer a country's measurement to zero, the less its disparity in income.  Sweden has the lowest GINI coefficient (23); the US measure of 45.7 is markedly higher than any country in western Europe, higher than that of Jamaica, equal to Uganda's. Moreover, in the last fifteen years the European Union has declined slightly (from 31.2 to 30.4) while America's has grown from 40.8 to 45.7.

To truly reform Medicaid, the US must reduce the number of people who need it by implementing policies that build the middle class instead of eroding it.