Obama Administration Archives : Wade Rathke: Chief Organizer Blog

Hardball on Disproportionate Share Might Equal State Expanded Medicaid

New Orleans When the archly conservative National Journal asks whether the Obama Administration is preparing to play hardball with Florida over $1 billion in Medicaid funding that is set to expire later this year for “disproportionate share,” the heart quickens as people, meaning most rational and sentient beings, committed to better health care for all, stand to cheer, “Right on, let’s play two!” The “disproportionate share” situation unleashes a potentially powerful lobbying force inside the Taliban camps supporting the governors who have stood at the hospital door, blocking the expansion of Medicaid to lower income families as part of the Affordable Care Act, so there’s hope at home, and maybe in Washington.

Here’s the story in a nutshell.

“Disproportionate share” funding is the additional money paid by the feds to a state to subsidize hospitals who are providing a disproportionate share of care to lower income patients, and thereby expected to lose more money in because of uninsured care for such families. Living in Louisiana, another state with a huge lower income population and a similar coming shortfall of three-quarters of a billion, we all know about “disproportionate share” hospitals because giving them a hand to get started and rake in the extra Medicaid is one of the things that got former Governor Edwin Edwards in so much trouble and eventually in the federal pokey. Texas is another state in the billion dollar club with disproportionate share payments timing out soon.

The hope for us and the fear expressed by the National Journal is that the Center for Medicaid and Medicare Services (CMS) has already told Florida that there is no way they are going to renew the disproportionate agreement without changes. Senator Bill Nelson, Democrat from Florida, quoting other conversations indicated that the CMS position was essentially why should they pay for something twice? Here! Here! To some degree, hands on the purse strings are already tied, since to fund the Affordable Care Act support Congress had already cut disproportionate share payments by over $18 billion from 2014 to 2020. The Republican recalcitrants have a problem because you can’t rob Peter to pay Paul, if Paul has already lost his money.

Experts say CMS has leverage. CMS seems to say they are trying to be reasonable. We should say, as loudly as possible, that it is definitely hardball time. The National Journal and others aren’t surprised that the Florida legislature is now debating finally expanding Medicaid. Seems like it is time for some Obama Administration squeeze plays at the plate. They must know that they can’t reward these naysayers, and they absolutely know that lower income families need the additional Medicaid support, so this shouldn’t be about politics, but basic morality.

Organizers everywhere have been looking for a way to rekindle the Medicaid expansion fight. Here’s a handle and there are a lot of public and private hospitals that are our potential allies on this one. Now that Obama is starting to be more of the President that we hoped he might be, this seems like one where he should be clapping from the box seats while all of us are cheering from the stands to get the most we can with our leverage now. I’m for having Secretary Burwell start throwing everything with heat and mixing in a lot of brush-back pitches and maybe a few bean-balls at these hard heads and hearts.

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Almanac Singers – Roll The Union On by Pete Seeger

Bank Redlining Increasing and Wealth Plummeting in Minority Communities

New Orleans The Federal Reserve report on the continued decrease in lending to African-American and Hispanic families is unambiguous. In 2013, 4.8% of total home loans were to African-Americans, 7.3% were to Hispanics. In 2012, the numbers were only marginally better at 5.1% and 7.2% respectively. As recently as 2006, before the real estate meltdown the numbers were almost 50% higher when combined, exceeding 20% of the total loans.

The other thing that is clear in the total failure of the Obama Administration to provide any real relief to so many homeowners is that citizen wealth for these same families has plummeted, putting more families underwater, owing more than the value of the loans in black and brown communities. While home values have declined about 10% in white communities, values have dropped by 20% in predominantly African-American neighborhoods and 26% in Hispanic-majority communities. It is virtually impossible not to conclude that banks are neither loaning, nor are they providing relief in such communities. If that’s not redlining, then let’s come up with a new name for it, because whether you say tomATo and I say toMAto, it’s all the same thing.

Reading the Wall Street Journal on this issue the only other thing that is crystal clear is that everyone responsible wants to point the finger somewhere else, usually at the government, rather than their own behavior, and muddy the water as much as possible, rather than moving to fix the problem with more rational policies and programs. The banks want to claim that they are raising credit scores higher than required because they don’t want to pay billions of penalties for their criminal behavior in robbing and fleecing both rich and poor. Does that sound like taking responsibility for your crimes and endeavoring to do better? Hardly!

And, how can blaming the lack of lending or relief to minority neighborhoods on these homeowners when every indication is that the roots of the securitization scandals were deeply set in speculation and largely white, middle-income and suburban communities? Count on the head of the Mortgage Bankers’ Association to voice the racism inherent in these new, whitewashed policies. David Stevens, their CEO, says the hammering of minority communities is “just simple math…tightening the credit has an unusually high impact on minority borrowers.” Stevens and the MBA are the lobbyists for bankers and banking in Washington, DC, so this is scary. They seem not to have gotten the memo that underlies the Federal Reserve report required by the Community Reinvestment Act and Home Mortgage Disclosure Act, which is the fact that they are supposed to be proving that they are doing better and doing everything possible to increase lending in minority areas, not just show up, and sign the attendance list.

Home ownership for lack of any better plan in place is still the largest source of wealth for lower income and minority communities so this level of inaction, blame shifting, and rationalizing puts the heavy fist of bankers on the scale to further increase the shift of inequality between the rich and poor, towards the rich. The underlying racism insures that lower income, minority communities by damn stay that way.

It’s not simple math. It’s simple racism, and that’s what the Federal Reserve is supposed to be stopping, not enabling, and it’s what these reports are supposed to be exposing for action, not simply noting in passing.