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Share this pageCan Medicaid fill the gap?
Posted by Don McCanne MD on Wednesday, Jul 8, 2009This entry is from Dr. McCanne's Quote of the Day, a daily health policy update on the single-payer health care reform movement. The QotD is archived on PNHP's website.
To: Sen. Judd Gregg, Ranking Member, Senate Budget Committee
From: Douglas W. Elmendorf, Director
Congressional Budget Office
Letter
July 7, 2009In response to your request, the Congressional Budget Office (CBO) has considered the likely effects on federal spending and health insurance coverage of adding a substantial expansion of eligibility for Medicaid to the Affordable Health Choices Act, a draft of which was recently released by the Senate Committee on Health, Education, Labor, and Pensions (HELP).
CBO has not yet had time to produce a full estimate of the cost of incorporating any specific Medicaid expansion in the HELP committee’s legislation. However, our preliminary analysis indicates that such an expansion could increase federal spending for Medicaid by an amount that could vary in a broad range around $500 billion over 10 years. Along with that increase in federal spending would come a substantial increase in Medicaid enrollment, amounting to perhaps 15 million to 20 million people. Such an expansion of Medicaid would also have some impact on the number of people who obtain coverage from other sources (including employers). All told, the number of non-elderly people who would remain uninsured would probably decline to somewhere between 15 million and 20 million. (For comparison, CBO’s analysis of the draft legislation that was released by the HELP committee found that, absent any expansion of Medicaid or other change in the legislation, about 33 million people would ultimately remain uninsured if it were to be enacted.)
http://www.cbo.gov/ftpdocs/104xx/doc10445/07-07-2009-ExpandingMedicaid.pdf
From the start it was recognized that insurance exchanges, even if they included a public option, could never provide affordable coverage for low-income individuals. The Medicaid program would have to be expanded to cover this more vulnerable population.
It was also recognized that, even with subsidies, there are many individuals who could not afford to purchase plans through an exchange yet have incomes above the thresholds that would qualify them for Medicaid.
That has led to the new definition of universal coverage as being “close to 95 percent.” This CBO analysis provides support for that view. Leaving only 15 to 20 million people without coverage has become one of the parameters that will define “success” in the reform efforts.
And costs? This Medicaid expansion can be accomplished for only half a trillion dollars (federal component), that is if it is agreed that the program will continue to be chronically underfunded. If it is eventually decided that Medicaid must cover actual health care costs, then add those costs to this half a trillion dollars plus to the funds already obligated for the 60 million people now covered by Medicaid. Once 75 to 80 million people are on Medicaid – over one-fourth of our population – adequate funding will be essential if there are to be enough willing providers to be there to give care when needed.
Keep in mind that all health care costs still must be met one way or another in a fragmented multi-payer system, but with the inevitability of inequitable cost shifting. This inequity potentially can have an adverse impact on the health and finances of tens of millions of Americans. However the total costs are much higher than they need to be because of the profound inefficiencies of this dysfunctional financing system which Congress has elected to protect and expand.
Under a single payer system – a reformed Medicare for all – everyone would be included automatically and without the projected cost overruns that are plaguing the current reform process. Those were the goals of reform, but they seem to have been chewed up in the legislative sausage machine of Congress.
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Mark Almberg
July 9th, 2009 at 1:24 pm
Jay Kallio responds:
Medicaid is the ultimate justification for much of the anti-government run health care sentiment. As an underfinanced, shame-based means tested entitlement it provides many of the horror stories that fuel people’s abhorrence of government agencies — capricious state eligibility requirements, unreliable bureaucracies determining benefit limits, substandard care offered in anonymous, dirty clinics overrun with overbooked patients, treated by disdainful providers who are only there to fulfill mandated obligations for service in return for privileges at a facility. Then there is the absence of available specialty care, so patients on Medicaid can obtain a diagnosis occasionally, but nothing more, and are basically left to die in the gutter. Of course there are many exceptions, but that is the all too common presentation of the Medicaid experience.
Expanding that Medicaid experience to a wider swath of the poor and near-poor will serve to further mute and diminish any public favor for government provided health care, and further bury the chances of single payer ever being enacted. No one wants to demand a place in the second-class citizen cohort, and no one wants to parade in the streets to remain one of the publicly degraded who do not deserve care. That is the public definition of “government run health care” — shared misery.
All the health care reform efforts now being proposed by Democrats in the Senate are merely aimed to reduce the proportion of uninsured back down to the “acceptable” numbers where public outcry will revert to its earlier acquiescence. No politician wants to be responsible for reining in the monster that the industry fueled astroturf groups have created to demand profitable services. They want to leave it to the private health insurance industry to take the bad rap, and they are happy to do so, especially with an individual mandate to procure their health care rationing services.
Jay Kallio, PNHP NY Metro