We have people pull up at the pharmacy window in a BMW and say they can't afford their co-payment."
--Mississippi Gov. Haley Barbour, Feb. 27, 2011
Haley Barbour's colorful remark, made to The Washington Post while attending a National Governors Association meeting in Washington this week, recalls Ronald Reagan's description of a "welfare queen" living high on government largess, driving a Cadillac. In Reagan's telling, she bilked the government out of $150,000, when the actual case involved $8,000.
The Mississippi Republican, who is mulling a presidential run in 2012, worked for Reagan as director of the White House Office of Political Affairs in 1985-1986. Could Barbour have picked up some tips from the Great Communicator? Reagan's anecdote ultimately was deemed exaggerated and aberrational, but it created a lasting image that fed popular distrust of the welfare system.
Let's see if there is any basis for Barbour's claim.
The Facts
Medicaid provides health coverage for about 53 million lower-income Americans and is a shared responsibility of the federal government and states. The federal government picks up, on average, about two-thirds of the costs and sets the minimum rules for which groups of people must be covered and what medical benefits must be included.
Governors of both parties say they cannot afford the current Medicaid system because of the fiscal difficulties stemming from the recession. It was in this context that Barbour made his comment. He is pleading for the federal government to allow states to have the flexibility to expand cost-sharing measures with Medicaid enrollees -- a point he also made in an appearance Tuesday before the House Energy and Commerce Committee.
"The problem is, federal regulations do not allow a provider to deny services to an individual on the basis of the individual's ability to pay. In addition, no cost-sharing measures can be imposed on many Medicaid enrollees, including children," Barbour told lawmakers.
Two days of inquiries to spokesmen for Barbour yielded no evidence or explanation for his statement, so we can't tell if his assertion about the BMW-driving patient is based on a documented study, an anecdote from a single pharmacist or a figment of Barbour's imagination. We presume we would have received an answer if there were something to back up the statement.
At the hearing, Rep. Janice D. Schakowsky (D-Ill.) asked Barbour about the BMW statement, but two witnesses said he did not provide an explanation. Unfortunately, there is no transcript yet available of the hearing.
Let's try a little bit of deductive reasoning.
Mississippi provides some of the lowest Medicaid benefits to working adults in the nation. A parent who isn't working can qualify only if annual family income is less than 24 percent of the poverty line. Working parents qualify only if they make no more than 44 percent of the federal poverty level. Seniors and people with disabilities are eligible with income at 80 percent of the poverty line. Pregnant women do better -- they're eligible with income up to 185 percent of the poverty level.
Translated from the federal poverty guidelines, that means a working Mississippi couple with one child could earn no more than $8,150 a year and still qualify for Medicaid, seniors and people with disabilities could earn no more than $8,700, and a pregnant woman could earn no more than $20,000 a year.
Meanwhile, the German-engineered BMW is a pretty fancy car. Edmunds.com says that new BMW car prices range from nearly $30,000 to more than $120,000. That seems out of the price range of someone making $8,000 a year.
Checking used BMWs worth less than $5,000 in Mississippi on Yahoo Used Cars finds 10 available within 300 miles of Jackson, the state capital -- but all carrying lots of miles. Four grand, for instance, would get you a 1996 BMW 328i with 237,000 miles on it. But even that, for many of Mississippi's Medicaid recipients, would be half a year's salary.
The Pinocchio Test
Given that you have to be rather poor to get on Medicaid in Mississippi, it seems highly unlikely the state has many Medicaid recipients driving around BMWs, even used ones. Note that Barbour said "we have people" -- suggesting this is not a rare event.
The failure of Barbour's aides to provide any documentation for this claim is rather suspicious. At least Reagan's anecdote was based on a real, though poorly remembered, newspaper article. We would welcome further explanation from Barbour, but until then this qualifies as a whopper.
Four Pinocchios
UPDATE, 1:45 PM:
We now have a transcript of the Schakowsky-Barbour exchange at the congressional hearing but it does not shed much light, except Barbour suggests "providers" have reported this problem to him.
REP. SCHAKOWSKY: Thank you.
Governor Barbour, you have talked about the reason that infant mortality rates, et cetera, are up in Mississippi, and also, you were talking about -- in terms of Medicaid, "we have people pull up at the pharmacy window in a BMW and say they can't afford their co-payment."
Well, first of all, let me say that the federal government has made fraud in Medicare and Medicaid a top priority and has for the first time really put resources into doing that. But would you say that Mississippi uniquely -- because other states -- it's really provider fraud that is the bulk of the fraud that goes on in Medicare and Medicaid, asking for reimbursements of care that really wasn't given, or prescription drugs.
Would you say in your state it's your people who are defrauding, the big problem in fraud?
GOV. BARBOUR: Congresswoman, in -- my understanding is that that's not considered fraud, that in the federal rules if a person says they can't afford to pay the co-payment, the provider can't challenge it. And, of course, the sad thing about that for us is the state doesn't save any money. It's the provider who gets shorted. But I report that because providers report it to me. It is not my understanding that that is, quote, "fraud" under the federal law. We have really done a good job of tamping down on our error rate, including fraud.
REP. SCHAKOWSKY: So you do -- so it's really people trying to cheat the -- you know, it's not -- it's not about -- it's about poor people or not-so-poor people trying to cheat the system that's been the big problem?
GOV. BARBOUR: We certainly had a problem at one time of people who were not eligible being on the program, and it was the state's fault because the state was not following the rules. But do we have provider fraud? Yes, ma'am, we do, and we also have waste from providers as well.
REP. SCHAKOWSKY: Which all of us I think agree we have to go after.