Friday, June 20, 2014

Medicaid: Increasingly, Healthcare In Name Only

Most Democrats consider Medicaid one of the major triumphs of progressive politics in the last 50 years.  So much so, that as part of ObamaCare, the Medicaid roles would be expanded to include those who's incomes are up to 38% above the federal poverty level.  Paul Krugman, the economist of all things liberal, once wrote in 2013: "I Have Seen The Future, And It Is Medicaid."  Now, it is being reported that several Democrats are going to make it a point to run on the expansion of Medicaid as part of their election/reelection efforts in the fall.

But, Medicaid has a big problem: Access to healthcare. 

Because Medicaid is the second highest state expense, just behind education, and because the states are responsible for determining the reimbursement rates for services provided by healthcare providers, state legislatures, for years, have been hacking away at those rates in their constant efforts to control costs and balance budgets.  As a result, you have this 2008 map which shows a state like California only reimbursing at a rate of 38 cents on every dollar that private insurers must pay for the same services rendered by primary care physicians:

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In essence, the underpayment by Medicaid is like squeezing a balloon.  When Medicaid squeezes down on one end, it must expand elsewhere to compensate. So, as a result, anyone with private insurance winds up paying for the costs that Medicaid doesn't cover.  However, if the insurers balk and won't pick up the additional costs then, the healthcare provider has no other option but to refuse to take on any new Medicaid patients.  And, that is increasingly the case today, despite the Democrat's grand plan to expand Medicaid.

In a recent study by a healthcare advisory group, Merritt Hawkins, in a random polling of doctors in 15 major cities who were practicing the 5 most common specialties (cardiology, dermatology, obstetrics-gynecology, orthopedic surgery and family practice), the study found that only 45.7% of those doctors would accept new Medicaid patients.  This was down from 55.4% in 2009.  But, more importantly, the polling for this study took place before the ObamaCare Medicaid expansion of January 2014.

Understand, that 45.7% is an average.  When you dig down into the survey results, you find out that Medicaid patients needing specialized treatment are basically left out in the cold. For example, only 63 cardiologists of the 262 contacted accepted new Medicaid patients.  That's only 24% or about 1-in-4.  Only 15% percent of orthopedic surgeons and only 17% of ObGyn's were willing to take on any new Medicaid patients.

Don't expect the situation to get any better. Last year, 8 states passed legislation that would further cut reimbursement rates as of January 1 of this year.  California passed a 10% cut into law.  Before that, in 2012, thirteen states cut their rates and, there is no reason to believe that the "cutting" won't just go on into the future.

So, the Democrats can praise Medicaid all day long, but it is another failed social program that is broken and not repairable; except at a great cost by forcing states to pay full-fare for services rendered. 


Medicaid Expansion:

Democrats to amp up calls for Medicaid expansion in campaigns:

I Have Seen The Future, And It Is Medicaid - Paul Krugman:

Physician Appointment Wait Times and Medicaid and Medicare Acceptance Rates:

Democrats Tout Medicaid Expansion In Campaigns:

2012: States Cutting Medicaid:

Medicaid surge triggers cost concerns for states:

California Cuts Medicaid Payments Amid Wave of New Users:

New Study: Expanding Medicaid Reduces Access to Health Care:

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