More Concerns About Medicaid Expansion

There was an excellent article yesterday by Mike Lillis in the Washington Independent containing valuable data regarding the Medicaid expansion that is at the heart of the recently-passed health reform legislation.

We can certainly celebrate the fact that millions of uninsured Americans will now have access to affordable health coverage.  Of considerable concern, though, is the fact that much of whittling down of the uninsured rolls is going to come through expansion of the Medicaid program.  In fact, the legislation changes Medicaid income eligibility levels to the point that 15 million citizens will now be added to the program.

As Mr. Lillis points out, here are the problems with that approach:

In 2008, doctors treating Medicaid patients were paid at just 72 percent of the rate they received for giving care to Medicare patients, and Medicare is itself well below private insurance payers in reimbursement levels.

As a result of these low payment rates, only about four of every 10 physicians accept all new Medicaid patients, according to the Center for Studying Health System Change.

The legislation does raise certain Medicaid payments, with the federal government picking up the tab for the increase, but only for two years.  After that, it would be up to cash-strapped states to maintain those levels, a difficult proposition to put it mildly.

The story also points out that the increase in Medicaid reimbursements will only cover services that are also covered by Medicare, which means that many healthcare services needed by children – such as flushing ears to treat and prevent infections – wouldn’t be covered.

As Mr. Lillis’s story indicates, there will undoubtedly be a push to maintain the higher Medicaid payment rates beyond the two years called for in the legislation.

Doing that, however, will make it more difficult to claim that this legislation actually reduces federal deficits.

But that’s an issue for another post.