Faustian Bargains & Extractive ‘Mutual Aid’

by Keith Taylor

I want more social programs for those in poverty and in the working class. The features of such programs should include elements of

  • policy align to the social problem
  • individual and collective empowerment
  • economic opportunity (ideally through forms of equity)

Imagine my dismay around the recent reporting around the profiteering from California’s Medicaid expansion, Medi-Cal:

some insurance companies are reaping spectacular profits off the taxpayer-funded program in California, even when the state finds their patient care is subpar.

A unit of Centene Corp., the largest Medicaid insurer nationwide, raked in $1.1 billion in profits from 2014 to 2016, according to state data obtained and analyzed by Kaiser Health News. Anthem, another industry giant, turned a profit of $549 million from California’s Medicaid program in the same period.

Overall, Medicaid insurers in the Golden State made $5.4 billion in profits from 2014 to 2016, in part because the state paid higher rates during the inaugural years of the nation’s Medicaid expansion under the Affordable Care Act. Last year, they made more money than all Medicaid insurers combined in 34 other states with managed care plans.

It would seem that no matter who is in power, when government programs for the marginalized are expanded we are forced into a Faustian Bargain demanding the rich get richer. Billions of taxpayer dollars, diverted from programming that could empower marginalized Californians. This is serious money that -from a health access perspective- could have

  • Increased quality of patient care
  • Provided health care at cheaper rate
  • Created new, cost-competitive health insurers owned by the consumer

Instead, policymakers used the same tried-and-true model that persistently fails to elevate the marginalized while enriching the already rich. We clearly need a welfare system that looks more like mutual aid instead, as opposed to extractive models leeching off of the poorest and most vulnerable.