Social Impact LIVE: Naomi Zewde on Health Care and Poverty in America
Richard Hara is joined by guest Dr. Naomi Zewde to discuss her research on how Medicaid expansion can help reduce poverty rates.
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Richard Hara: Hello. I’m Richard Hara and this is Social Impact LIVE, a weekly conversation with members of the Columbia School of Social Work community. I’m joined today by Dr. Naomi Zewde, who most recently has been a postdoctoral research scientist at our center on poverty and social policy, at the School of Social Work. For the last two years, correct?
Naomi Zewde: Correct, yes.
Richard Hara: Right, but moving on now to the City University of New York, to their graduate school of Public Health and Health Policy. Is that correct?
Naomi Zewde: Yeah, that’s right.
Richard Hara: Okay, great. As an assistant-professor. So, welcome, Professor Zewde.
Naomi Zewde: Thank you. Thanks for having me.
Richard Hara: Okay, great to have you here. Dr. Zewde’s work has focused on the economic effects of private and public health insurance. For example, how the Affordable Care Act and Medicaid expansion has affected rates of poverty in the United States. She’s also analyzed how Baby Bonds, a proposal championed by presidential candidate Cory Booker and others might affect or mitigate the racial wealth gap between white and black young adults. So, obviously, she’s done tremendous work. Her work has been cited in Forbes Magazine and in the Washington Post, and clearly speaks to current issues in American politics. So, I am looking forward to a wonderful discussion today of those issues and just a reminder, we will reserve 10 minutes or so, later in the program, for questions and answers, but before we turn, you know, to our discussion, I just would like to ask you, Dr. Zewde, could you tell us a little bit about your personal journey, how you came to do this kind of research in the first place?
Naomi Zewde: Sure. So, I, I am from Houston. My parents are from Ethiopia and growing up, we used to go and visit and I would see that like I really appreciated the way of life. It was slower and it was really peaceful, in a way, but there was always this… it just occurred to me that like medical care is very expensive and so, people who live close to the land, it would be difficult. Like, how is it possible for them to be able to afford health care, cutting edge medical technology? So, I was interested in kind of how do we design a society where everybody can have access to health care? So, I did my undergraduate degree in anthropology and global health. I did a master of public health and health systems management, and it was kind of about how to design a hospital or how to manage and run a hospital facility, but I really wanted to know more than that at the society level, kind of, how do we allocate these kinds of like important access for people. So, so I studied the ACA and the way I got into Baby Bonds, actually, was because, you know, I was looking at these high deductible health insurance policies in the Affordable Care Act and finding that the idea behind it was supposed to be to protect your wealth, but for a lot of people, what they need is to protect their health. You know, they need to see a doctor, right? And you know, high deductible health insurance policy wasn’t really improving people’s assets. And so I wanted to look at a policy like what kind of policy would we need that actually could improve the asset position of people, and you know, and I came across this idea of Baby Bonds, and it was an existing policy idea, but I wanted to look in the data to see kind of what would be its impact, if we actually did this.
Richard Hara: Okay. So, so we’re not looking necessarily at the root causes of poverty, right? We’re not coming up with any grand explanations of why we have inequality in a society and so on. So, Baby Bonds, as a proposal, is meant to do, to do what?
Naomi Zewde: It’s meant to… I mean, so that’s right. Of course, the causes are varied, and especially in the United States, there is the legacy of slavery and there are… it’s just capitalism. If you don’t do anything, if you leave it alone, it’ll create inequality. So what Baby Bonds does though is, it’s what it is, is a universal trust fund. Federally funded, universal trust fund for every newborn baby in the United States.
Richard Hara: Okay.
Naomi Zewde: So, they get, you know, everybody gets something but those whose parents have the least wealth get the most, up to $50,000.
Richard Hara: So it starts with an initial, I guess, deposit, right?
Naomi Zewde: Correct.
Richard Hara: Into every child’s account, and then based on their family income, every year there is an amount that’s put in or…?
Naomi Zewde: It’s just… the way that it’s designed, in this proposal, is that it would all be given at the time of their birth.
Richard Hara: Okay, and compounding interest, I guess.
Naomi Zewde: Correct. So, it would grow over time and then they can’t touch it until they become a young adult, 22 or 25, something like that. Yeah.
Richard Hara: All right. So, right now, there is this racial wealth gap between white and black young adults. At the age of 18, what does that look like?
Naomi Zewde: It’s pretty astounding. So, I looked at like just the group of young adults between 18 and 25, and at the median, so just, you pluck the person right in the middle of the distribution, half people are richer and half the people are poorer on both sides. The disparity in wealth at the median for young adults in the United States is a factor of 15.9, so that the young white adult has 16 times the wealth of the young black adult, at the median.
Richard Hara: Wow.
Naomi Zewde: Yeah.
Richard Hara: And then Baby Bonds would eliminate that gap or…?
Naomi Zewde: Baby Bonds would reduce it to a factor of 1.4.
Richard Hara: Okay. Again, so we’re not talking about eradicating the roots, right, of economic inequality, but somehow, closing that gap and giving people greater opportunities, right, because once they’ve got the money, then what are they going to do with it?
Naomi Zewde: So you know, I think that in some ways, it does account for the roots, only in so far as, like the roots is a radical disparity, historically speaking. You know wealth is different than income, because it’s something that is transmitted across generations. So, and African-Americans haven’t had many generations to accumulate and transmit wealth. So, there is a disparity in inheritance, you know, and a disparity in just early life chances that are supported by access to capital. So, in those… in that way, it does address in a way this root cause that we can’t go back in time, but you know, and so there are debating kind of ideas about what exactly the money could be used for, when they get that wealth and between when they become a young adult. Some people say it should be restricted to only higher education or buying a home, something like that. Others say, people know best what to do with their funds.
Richard Hara: That sounds a little scary to me.
Naomi Zewde: Yeah.
Richard Hara: And I don’t know how tightly you want to regulate it, you know, how, what kind of guidelines you want to have for how that money gets used at age 18 or whenever, but presumably, education would be one way that the money could be spent. And I’m just wondering, so do we have any evidence from other programs that would support the use or the creation of this kind of Baby Bond program?
Naomi Zewde: Yeah.
Richard Hara: And has it been tested anywhere, or…?
Naomi Zewde: So, and I think it’s interesting the idea also of regulations, like I guess some trust funds, like just private trust funds have the rules, and maybe some don’t and also, if we have tuition-free college education that will help, you know, to be able to use this money for other things in life, but so it has been tried. It was tried in the UK, but in the UK, it wasn’t a big lump sum transfer at birth. It was over time, but then the administration changed and the Conservative administration, I guess, took over the Parliament and they stopped the program.
So, at that point, only about $2,000 or so had been put into these accounts and so it didn’t make, you know, that’s not really a life-changing sum of money for many people.
Richard Hara: Yeah. So, I’m wondering. So, we don’t have a lot of empirical evidence, so to speak, case studies to draw from. So, how did your analysis demonstrate that this wealth gap could be reduced?
Naomi Zewde: So what I did really was look at the impact it would have on young adults at the time in which they receive that money. So, you know they can’t touch it in the interim. So, as soon as they get the money, just what happens and how they are going to use those funds. You know, there is always going to be some people who will, you know, squander it but I think that most people, it would really, it could be a life-changing sum of money. I think that for most people, they can… they would, it would really expand the opportunities in their lives in a way that we haven’t seen before.
Maybe it’s a good thing that there is no example, because if it had been tried and we were still here, then I don’t know, maybe it wouldn’t bode well.
Richard Hara: Well, I think you’re pointing to an aspect of social policy, right that as much as we look back and try to analyze what’s happened in the past, we live facing forward, right? And we have to try new things and you know, one area where I guess we’re trying to do things differently is in health care, and looking at the Affordable Care Act as a watershed moment, but also as an opportunity for us, right, to see what the impact of different and new policies might be on people’s behaviors, on people’s lives, right, in a particular arena.
So, as you were saying before, you’ve done work on how the Affordable Care Act, for example, has impacted rates of poverty. My understanding is that this was for the better, right that we’ve reduced…?
Naomi Zewde: It did reduce poverty, yeah. Medicaid expansion, in particular.
Richard Hara: Medicaid expansion. Okay.
Naomi Zewde: So because it’s, it’s only targeted to cert- … like people, like households who are not that far from poverty, you know. Making around $18,000/year for a single adult is the cutoff for eligibility, and so when these people can now have access to, you know, if you have a chronic condition and you need insulin, for example, that’s an ongoing expense. Having that covered through the public health care system can really, when a person is close to the margin, it can mean everything for your life, you know. In fact, in some more recent work forthcoming with Heidi Allen, we’ve found that it reduced rates of eviction in the United States. Yeah, there is other work that shows… I mean, it’s had a really substantial… I mean, because if you think about what it means to have, to have prevented evictions is that people are choosing between medicine and rent, and with Medicaid expansion, fewer people have to make that choice.
Richard Hara: Okay. All right, so obviously, it has like a ripple effect, right? You, you affect one area of a person’s life and it might have positive benefits elsewhere. Housing, health care, employment and so on, and I think that’s certainly an idea that’s supported well by social work practice, and ecological framework. So, so I am curious, sort of teasing out a lot of these relationships, right, between people’s economic situation, their behavior, making decisions about their lives, et cetera, and one of the things that you’ve looked at with regard health insurance is, I think, sort of the single payer versus the public option. Now, correct me if I’m wrong, but with the Affordable Care Act, states were mandated to offer a sort of marketplace for health insurance, et cetera, but not as many people bought insurance on the marketplaces, as expected. Why not?
Naomi Zewde: That’s correct, and so exactly why not, it’s hard to say. First of all, a lot of… if you have employer-sponsored coverage, you don’t go through the exchanges. It’s only for people kind of left out of that market, but then what happens is that these plans are fairly expensive and on top of that they have really high deductibles. So, you know, most, on average, employers cover about 80% of a person’s health insurance premium, but if you make more than like $50,000 in a year, the federal government was not subsidizing your premium at all. So, you face the full premium cost, which is different than the cost of a plan in the employer market, because your employer would cover some of it. So you have to pay the full premium, which can be a lot of money every month. Thousands, even, every month. On top of that, the median deductible. So, most people, essentially. Deductible is about $3,000, and that’s for the benchmark policy, the silver tier. So, most people are not going to spend more than $3,000 in a year, and what it means is that they are paying every month a premium, a really expensive premium and then, on top of that, they are paying out of pocket for all of their health are cost for the full year. So it doesn’t provide much incentive for the consumers. In fact, I found that for about 25% of adults who were uninsured prior to the ACA, which was kind of the target population for the law, people who didn’t have coverage.
Richard Hara: Right.
Naomi Zewde: About 25% of them, it’s cheaper to file for bankruptcy than to meet the deductible of the subsidized ACA private insurance policy. So it can’t offer financial protection for that group.
Richard Hara: So, so I am going to make a leap here and sort of say that based on what you’ve argued that any health care plan that focuses on a public option faces some serious obstacles.
Naomi Zewde: Challenges, I think.
Richard Hara: Challenges. That’s the word.
Naomi Zewde: You know, I think that the real difficulty with the public option is going to be the fact that if… So, the way the public option works, essentially, there are a number of states who are considering this kind of legislation and New Mexico, Colorado, et cetera. So, the way it would work is essentially that the state would kind of contract with a private insurance company, kind of like Medicaid managed care, and the private company would offer this public option on the exchanges, and it would compete with their other products. And because it will compete with their other private products, it would be a formidable challenge to get them to offer something that is a low price and a high quality, because they will entirely undercut their market.
If anything, if we go to a public option, really, we’re eliminating the private option. It can’t really coexist.
Richard Hara: Well, are there people who argue though that competition is good and that it will drive providers and so to hopefully contain and control costs in a way that they haven’t done previously?
Naomi Zewde: Yeah. If this public option can actually provide a very low cost, high quality coverage, like what we can see in all of the other industrialized nations, in Japan for example, they have really cheap health care and it’s actually pushed them to develop things like low-cost MRIs that we use here, because we force- they were forced to accept lesser reimbursement. So, if we can provide that good of coverage in competition with the private market and somehow, actually convince these private insurance companies to, to offer something so much better than their own products.
Fine, but I think that what will end up happening is that in order to convince them… I don’t think they will be convinced, I should say, and, and if they are not, we shouldn’t … we should be weary of accepting a, like, too, too much of a, of a, of a poorer alternative.
Richard Hara: Okay. So, but the Affordable Care Act is sort of along the lines, right, of this approach. Another, an alternate approach would be to go to a single payer option, right? So called, Medicare for All? Would that work? Do you think it would work better than, than the public option?
Naomi Zewde: I think it’s interesting. The good things about the single payer from the consumer’s perspective, which is really my focus in my research is just how do things impact consumers. I think from the consumer’s perspective, there is a lot less complexity and also, from the provider’s perspective you’ve only got one person to bill, and that’s Medicare, and there is no deductibles, no copays, no in network, versus out of network. So, so there is a lot of complexity that would be eliminated and also moving to an income tax financed policy that would, you know, everyone’s covered and you’d pay based on like ability to pay, essentially. It’s the principle of it, but it would be a percentage of your income, because it would, at the same time, reduce the total cost of the system, at least in terms of reducing administrative complexity.
It would move to tax finance and at the same time, you’d be taxed the same or less, you know, for most people. If that’s the way it works out, I think it’s hard to argue in favor of copays and deductibles.
Richard Hara: Well nobody likes copays and deductibles, right?
Naomi Zewde: Yeah.
Richard Hara: So, but at the same time, people are leery of turning over control of the health care to some sort of government-run system as well. So, I think there are sort of extra economic, political and cultural considerations that that are at play here.
Naomi Zewde: Yeah, I mean, it’s true. Perhaps, they do have control of our freeways and our, you know, a lot of infrastructure and so, I don’t know if we want to add health care to that. It’s a question but there are tradeoffs to everything.
Richard Hara: Okay. Well, we’ll leave it there for the time being. What I’d like to do now is just check in and see if we’ve got any questions from the audience and yeah, I’ve got one posted here right now. Dr. Zewde, imagining that a baby is born today, how much money would they receive under her plan and how much would they receive when they’ve reached adulthood? So…
Naomi Zewde: So it would depend on their parents’ wealth. I’ll say, it’s not my plan. It was… the idea was actually Darrick Hamilton and Sandy Darity. They were two scholars, and Cory Booker is interested in it as a political proposal. So, I just kind of studied the impacts on wealth, but what I was finding is that so parents who have the least net worth and who have a child, let’s say a household that has maybe $2,000 or less, or is in debt, they have a child. That child would get $50,000.
When they become a young adult, you know, it will grow, to some degree, just a little bit. Maybe four percent or so, we can say, and that would come out to about $70,000, when they are a young adult.
Richard Hara: Wow, that’s a considerable amount of money to have to use, right, in your life. So, yeah. It can help make a big difference. Another question. When we look at the democratic debates, what should we be tuning into? Do any of the candidates have a plan that you think would work better for the poorest people in our country? That’s a good one.
Naomi Zewde: It is a good one. I think, you know, I think that exactly what you asked is the right thing to tune into. What can… what do these plans do for the poorest people in our country? I’m really interested in the kinds of proposals coming out of the Sanders camp and I think that it, it’s like, the difference between these candidates, especially between like Sanders and Warren, I think that there- it’s less valuable to look at the differences between these camps than it is to look at the issues themselves. You know, it’s… if we can eliminate things like student debt, which I think that has a big toll on people’s ability to kind of navigate, you know, higher education and navigate kind of the challenges of like how to be a contributing member in the 21st century, so you know, and the differences these candidates, a lot of these candidates in exactly what they would do to eliminate student debt, especially between Warren and Sanders, let’s say, it’s not that far off, but just the content and just imagining yourself as a person who, who faces a lot of these major challenges of our generation who has debt, who wants to go get a higher education, who wants to buy a home, and trying to think about how would these plans change my life.
Richard Hara: Make it personal.
Naomi Zewde: Yeah.
Richard Hara: In a way. Okay. A related question. How might it be possible for Democratic candidates to have substantive conversations about the clearly nuanced and complicated issue of health care without alienating voters or having them tune out? Okay so, yeah. You know, there is this work out there, “wonk”, “wonk-ish,” and stuff, you know, discussions and yeah, do we run the risk of just getting too technical with all of this? How do, how do we make it personal and how do we make it substantive?
Naomi Zewde: Yeah. I think that a lot of times, when people ask the question of how is it going to work, oh, you know, you want health care to be more affordable, you want better access and no surprises, and that kind of thing, but then there is the question, how do we make it possible? And then, that’s when you kind of get into the wonkiness, you know. I think it’s valuable to, especially when engaging, really, because a lot of democracy is about public reasoning and public discussion and trying to understand for ourselves and our communities what we stand behind, you know, is to step back to what it is, you know, what, for example with health care, what is it about health care that’s the problem? What is it that we want to change and improve that we can? We have the capacity to change. What are…? Actually, putting the capacity question aside, it’s so easy to fall into, but just to say like, the vision, you know. To really try to think about what is the vision, where do we want to go?
Richard Hara: So we have to talk about health care, whether it’s a right, right, a human right or a privilege, right? Is it a commodity, something that’s produced and consumed or is it something that actually, I mean, constitutes our relationship with one another? I mean it’s care. I mean, the health is one part of it, but care is the other important part of it, and I think, you know, that speaks to, you know, our relationships with other people, maybe. Yeah.
Naomi Zewde: Yeah. I think that when… if, if you’re walking on the sidewalk and you see somebody in dire need of medical attention, you have this instinct to help. I think everybody does. It’s, it’s something that we have and I think that you know, we don’t necessarily know what are the human rights of the world. The earth didn’t come with an owner’s manual, right? We kind of have to decide for ourselves, what do we want rights to be, and whatever those rights are, they are rights when we protect them, when we take steps to protect them, and I think that health care, for most of us, I think, it is a right. I think we do understand it to be a right and it… that requires us to take steps to try to make it more accessible to more people.
Richard Hara: Yeah. I mean, it seems to me that you know, when you talk about health and you talk about illness that… I used to work in health care, at a hospital as a social worker. So, and it didn’t matter who came into the hospital. If, if you were sick, if you were ill, I mean, it didn’t make a difference if you were rich or poor, black or white, you know, an immigrant or Native-born, you know, sickness was sickness, right? And it created a sort of universality and, and so on. And not to take away from, from, you know, diversity in our world, but I, I think that it argues the need for us, right, to, to take care of people who are suffering, the vulnerable in our society, including, I think, and I think you might agree, the poor, right, and issues of poverty in the United States, and how can we help people in those, in those situations, as well.
Naomi Zewde: Yeah. I mean, that’s what I liked about being at the School of Social Work here is you know, I’m interested in policies and how we can make opportunity for people and being here gave me the kind of space to, to look at those questions that I’m interested in and to learn more about like what can we do and how can we do it, and what needs to be done.
Richard Hara: Yeah.
Naomi Zewde: Yeah.
Richard Hara: So, as, as an economist, as a scholar, academic, I mean how do you see your role, sort of making that difference, impacting? Is it through you know, your work or through media, you know, and journalism and talking with the reporters or speaking at conferences? I mean, how are you…?
Naomi Zewde: You know, I think that really what I have that is kind of my competitive advantage, I can’t help but use economics terms, but is, is the, like, is the research. You know, I don’t want to have an opinion, like, because there is so many of them out there, you know.
Richard Hara: You, you’re talking about the fake news and alternate facts, or…?
Naomi Zewde: Yeah. I mean, that’s one and it runs the gamut. Even like well-meaning people. You know, I don’t want to add to the noise and the hyper-temporal kind of just changing everyday conversation, you know. I want to uncover what is true for, for myself, you now. Use data, use evidence, like understand what’s true and share that with, you know, activist communities who are pushing the policy levers and, and organizing.
And so part of that is like disseminating that information, but I think it’s all rooted on the scholarship.
Richard Hara: So, we have to find out in the first place.
Naomi Zewde: Yeah.
Richard Hara: Okay. We have three final questions, I believe. Is it worth discussing mental health care separately from other health care in this conversation, on access, or do you consider it all together?
Naomi Zewde: So, when I think about mental health care, I mean first of all, having like no deductibles, no copays matters a lot for mental health care because, you know, you have to go every week. You know, if you’re paying $50, $100, every week, a lot of people are just not going to go. So, it’s really important just in terms of like the coverage aspect to get for mental care, but I think that even beyond that if we can alleviate some of the pressure on making profits in health care system, we can start to understand alternative ways of treating mental health care, you know?
Maybe there are ways of addressing isolation for the elderly and you know, throughout the life force that can address depression in, in different and innovative ways that maybe don’t fit neatly within the profit system. So, I think that it, it’s, it’s kind of synergistic but there are unique like ways to address mental health care.
Richard Hara: Okay, and following, following that, do you think we should be discussing abortion rights and access in the context of the idea that health care is a right? Does that fall under that umbrella?
Naomi Zewde: Yeah, one hundred percent. We need safe, free and on-demand abortion rights.
Richard Hara: Health care. Okay, that’s definitive. I’m curious, where do Baby Bonds fit into the debate about reparations? Might Baby Bonds work better than other models?
Naomi Zewde: You know…
Richard Hara: It’s a complicated question.
Naomi Zewde: It is. It is, and I think that you know, so… reparations, I think, it’s going to need a multifaceted approach, because there are the back wages, but there is also, you know, centuries of a lack of infrastructure in the environment, in schools, in family institutions and cultural institutions, and heritage, and so I think that you know, Baby Bonds, first of all, is universal, but it is tied to wealth and not income, because the wealth disparity is so relatively extreme along racial lines. So, it’s designed to alleviate that, but I think that we cannot get away from the need to develop and provide, and maintain over time race-specific policies to address, you know, kind of this country’s industrial leapfrogging on the African-American population.
Richard Hara: Well, I imagine that’s going to be a topic for another conversation here at Social Impact LIVE. So, that concludes our episode for today. I want to thank Dr. Zewde for joining us and just letting you know that we’ll be joined next week by Ellen Lukens and Helle Thorning, to talk about loss and resiliency, reflections on 9-11.
So, thank you for joining us this week and I look forward to seeing you all next week.
Naomi Zewde: Thank you.
Richard Hara: Bye-bye.
Naomi Zewde: Thank you.
Richard Hara: Thank you.