Medicaid funding crisis pushes us to expand system

opinions

June 17, 2011 - 12:00 AM

Kansas was used as an example in a national story on Medicaid financing Thursday.
“R. Andrew Allison, who is executive director of the Kansas Health Policy Authority and president of the National Association of Medicaid Directors, said Medicaid is gobbling up new revenues as states recovered slowly from the recession.
“Kansas illustrates the predicament most states are facing. Federal Medicaid payments in Kansas are expected to decline by more than $250 million, or 13 percent in the state’s new fiscal year which starts July 1, Allison said. But the amount the state spends on the program is expected to increase by more than $300 million, or 39 percent.”
These paragraphs came from a New York Times survey of the national Medicaid situation.
The reason for the steep decline in federal spending on the program is that the Obama administration injected $90 billion into the program in 2009 as part of its economic stimulus effort. That money is running out. Neither Congress nor the administration is planning to replace it. As a consequence the states must spend more to compensate for the drop in the federal share — or state programs must be cut sharply.
The crunch is worsened by continuing high unemployment and the aging population. The Medicaid program provides health care for the poor and disabled. The number eligible for coverage has steadily increased because of unemployment and under-employment. Those who work but have no health insurance, for example, make up a significant part of the Medicaid population.
But the largest fraction of the Medicaid population is made up of those in nursing and assisted living facilities who can’t make those very substantial monthly payments from their own assets and incomes. As the population gets older, the number who depend on Medicaid for food, shelter and care grows inexorably. The only way to control that cost is to reduce the quality of care provided. Or, to put it in the vernacular, toss grandmother out into the snow (or summer sun).

MEDICAID COSTS also can be reduced by cutting the fees paid to health care providers, by reducing the scope of covered services — refusing to pay for dental and eye care, for example — and raising co-pay requirements.
Actions have consequences. When a hospital loses money on a Medicaid patient because a state has reduced the maximum it will pay, then the hospital shifts the cost to other patients. The result is to increase the cost to health insurance companies, which then raise premiums, or to increase the cost to Medicare, which increases federal spending and pushes the deficit another notch higher.
Think of the Medicaid budget as a balloon. When it is squeezed, it bulges elsewhere.
One of consequences of slashing Medicaid benefits is to prompt some physicians to refuse to accept Medicaid patients. Denied care by a private physician, the poor then go to a hospital emergency room. The excellent care they get there is also the most expensive medical care in the U.S. system. And that rising expense pushes all health care costs higher.
The way to loosen the jaws of this vice is to provide full health care coverage to the poor; to give Medicare-type coverage to those now covered by Medicaid; to design a health care delivery system based on the principle that even the least among us should be cared for when they are ill, injured or unable to care for themselves.
We are, to be sure, moving in that direction. But the pace is glacial.

 

— Emerson Lynn, jr.

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