Catch-22 Policies: Medi-Cal and Transplants
I ran across a situation recently that required me to figure out how the Medi-Cal program – California’s implementation of the Medicaid program, which provides government-funded health insurance to low-income people – handles people who have received transplants. What was happening was so illogical and ill-conceived that I was astounded to find out that it was exactly what the regulations and structure of the program wanted to happen. This is an example of state and federal policy just Not Making Sense.
Not all low-income people can qualify for Medicaid, but have to have a “linkage” to the program in addition to being poor. One of the linkages is have a disability that meets the Social Security Administration’s (SSA) definition of “disabled”: having a physical and/or mental impairment that prevents the individual from engaging in “substantial gainful activity” for at least 12 months. “Substantial gainful activity” just means work where the individual is earning a certain level of wages that SSA thinks is enough to support themselves, a fixed dollar amount that SSA adjusts every year. So, basically, a person has to be completely unable to work for at least a year in order to be eligible. Once they start getting Medi-Cal on the basis of disability by proving they meet that standard, the program will periodically re-evaluate them to see if their condition has improved and if they could now return to work. If the Medi-Cal program thinks the person’s disability has improved, they’ll be cut off the program and no longer have access to health insurance.
This reflects the underlying policies and values that caused the program to exist – policymakers want people to work and support themselves and will only step in to provide benefits if there’s some compelling reason the person is unable to do so. (Note: I have a lot of problems with those assumptions and am not endorsing them myself, just outlining what we can assume the policymakers believed and intended.) So, if a person is later able to support themselves through work, we’ll cut off the benefits because there’s no longer a compelling reason for them to not be supporting themselves.
It’s easy to anticipate a number of potential problems with those policies, mainly around the cyclical nature of many disabilities. But I want to focus on specifically is people who have received organ transplants. When a person needs a transplant, they will certainly meet the disability standard and be able to get on Medi-Cal. Someone in dire need of a kidney or liver transplant is not going to be working 40 hours a week – they are likely going to be in the hospital for a lot, if not all, of their time. So they’ll get Medi-Cal coverage, which will pay for the transplant surgery and hospitalization and all that sort of thing.
After the transplant, time goes by. SSA says they will assume someone will continue to be disabled for one year after a transplant operation, but after the first 12 months, the Medi-Cal program will start evaluating the person to see if they continue to meet the disability standard. Most times, people won’t, because recovering from transplant surgeries is difficult and takes a long time, even if there’s no significant complications or organ rejection problems. So people continue to be covered by Medi-Cal.
Now, some more time goes by. And for some people, the transplant has resolved their underlying health problems. (This certainly isn’t true for all transplant recipients.) They’ve recovered from the transplant surgery. They’re doing well. And when Medi-Cal comes around to re-evaluate their disability, the may not meet it anymore. They may not be so severely impaired that they’re unable to do any work at all. And for most people, this would be a good thing. They’re getting better. They’re improving. They have more ability to function, to care for themselves, to be independent. And most of them are immensely excited about and proud of that progress. They have worked hard for it.
But it can mean that their Medi-Cal gets cut off. That their health insurance goes away entirely. And this is an enormous problem, because no matter how well someone has recovered from transplant surgery, she has to keep taking immunosuppressant anti-rejection drugs so her body doesn’t begin to reject the transplanted organ. And my understanding is the vast majority of transplant recipients have to keep taking anti-rejection medications for the rest of their lives. So when a transplant recipient’s health insurance gets cut off – how are they supposed to afford those expensive immunosuppressants? The Transplant Recipient’s International Organization estimates that “the average annual cost for immunosuppressive medications for kidney transplant recipients is approximately $11,000.” Transplant Living estimates the costs to be even higher, ranging from $17,200 to $27,500 per year, depending on which organ was transplanted.
For transplant recipients cut off Medi-Cal for disability reasons – which means they are still poor enough to qualify for the program – those costs are completely beyond reach. This is especially true because the person has likely also just lost eligibility for cash benefits from Social Security for no longer meeting the disability standard – so they must go out and figure out how to start earning enough to pay for rent, food, utilities, transportation, and the medication costs. And if they can’t manage to get enough money for the drugs? Their body will start to reject the transplanted organ, and they’ll go into kidney failure, or liver failure, or heart failure, or other organ failure. At which point they will go back to the hospital, extremely ill, and go back on the transplant list . At which point they will be so sick they can get back on Medi-Cal, which will pay for their hospitalization and the next transplant surgery.
Obviously, this is immensely cruel. Requiring someone who has just managed to recover from the first transplant surgery to abandon their medical treatment so they get increasingly sick, potentially fatally sick, to undergo another invasive and traumatic transplant surgery – if an organ even becomes available! – is beyond inhumane. But even from a purely economic perspective, it makes no sense. Certainly immunosuppressant medications are expensive – expensive enough that people can’t afford them without help, so it’s not without cost for the Medi-Cal program to pay for them. But organ failure and transplantation are way more expensive in comparison. Looking at a kidney transplant, the 30 days of hospitalization during pre-transplant organ failure cost $16,700; organ procurement costs are $67,500; admission during the transplant procedure and recovery is $92,700; the physician for the transplant surgery is $17,500; the post-transplant admission is $47,400; and then the immunsuppressant drugs cost $17,200. A report by Milliman Research (pdf) has even higher numbers, estimating the cost of a liver transplant at $523,400.
I think there are compelling arguments for a policy change that fit within my values and priorities – to avoid human suffering – but this cost data suggests a strong argument for a policy change that fits within the values of those in power – reducing costs. To make this argument to those people, I would analogize: if you buy a house, you put in maintenance, you don’t just abandon it to fall apart. It makes sense to put in upkeep and maintenance on property to protect the value of the property. The Medi-Cal program is buying these people organs, it should maintain those organs. But that’s not what the program rules say should happen. That’s not the policy.