May 17, 2021
One slogan indelibly fixed in my mind from my days organizing with the National Welfare Rights Organization were “Mas Dinero Ahora!” or “More Money Now!” It’s a wonderful surprise after so many dark nights for lower income families that “show me the money” and real talk about the value of cash payments is finally, once again, a hot topic. Families across the country undoubtedly have July 15th circled on their calendar with phone alerts set to ring off as well, as the date the Biden administration has promised the per child cash supplements will hit their bank accounts.
I can remember countless lonely arguments in the late sixties and seventies, where I would try to hold onto my position that more money, over and above anything else in the alphabet soup of programs and plans, would be the gamechanger. An economist, Amy Finkelstein from MIT, and her colleagues have now backed up our simple demands with some hard research. Unfortunately, she is forced to make the case while presenting the Hobson’s choice between expanded health insurance coverage and cash payments, when the administration and the rest of us paying attention would love to have both and more of the same. Nonetheless, her argument is that as much as we might want it all, politics and budget constraints might force us to choose, and, if so, the numbers are clear: cash wins.
Her studies found that “The benefit of Medicaid coverage received by a newly insured adult is less than half what the coverage costs taxpayers, which is about $5500 a year.” The reason is straightforward. Many lower income families are already getting much of this care, paid for by other local and healthcare sources, even though uninsured. They estimate that 60% of government spending is redundant here.
Our own work in studying hospital charity care is that much of the increased health expenditure this money is going to their bottom line, since expanded Medicaid under Obamacare has in fact led to less charity care by nonprofits regardless of their tax exemptions. What family wouldn’t prefer to get $5500 cash money rather than what MIT is estimating to be $2200 in increase health insurance benefits? None. Period.
We don’t need to subsidize hospitals, when the advantages of direct subsidies for lower income families are so huge. The benefits in family stability, educational achievement, mental health improvements, better nutrition, safer and more secure housing, family self-sufficiency, and general well-being make more money now the clear winner. We want both, more cash and more health coverage, but if we can only have one, the argument remains the same as it was fifty years ago: Mas Dinero Ahora!
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