The political vulnerability of Medicaid
State Plans Medi-Cal Rate Pinch
By Evan Halper
Los Angeles Times
December 13, 2005
Gov. Arnold Schwarzenegger is planning to cut the rates the state pays doctors to treat the poor, a move medical groups warn would result in more Californians losing access to healthcare.
The administration announced in a bulletin mailed to Medi-Cal providers Monday that it planned to temporarily cut reimbursement rates by 5% through 2006. The news comes at a time when the rates already are so low that many doctors refuse to participate in the program.
“We are paying doctors at the lowest rate of any state,” said Dr. Jack Lewin, chief executive of the California Medical Assn. “Half the doctors in this state have dropped out of the program. The rest are staying involved almost as a goodwill service for their communities. This sends the message from the state that these patients are not that important.”
“We recognize that this rate reduction is a hardship to healthcare providers,” said Ken August, a spokesman for the California Department of Health Services. “But California continues to face a deficit.”
Now California is in much better financial shape. Although the state technically continues to run a deficit - it is on track to spend more money next year than it will bring in - an unexpected surplus in receipts in recent months has left state coffers flush with enough cash to balance it out.
And…
House and Senate Still Far Apart on Medicaid Changes
By Robert Pear
New York Times
December 12, 2005
Members of Congress will soon plunge into battle over the future of Medicaid as House and Senate negotiators try to resolve huge differences in legislation that would allow states to cut benefits and increase charges for millions of low-income people, including many children.
In a detailed analysis of the House bill, the Congressional Budget Office predicted that 70,000 to 110,000 people would lose Medicaid coverage for failure to pay premiums.
Democrats, who are generally opposed to the House and Senate budget bills, are excluded from the current negotiations.
http://www.nytimes.com/2005/12/12/politics/12medicaid.html?pagewanted=all
Comment: As a program that funds health care for low-income individuals, Medicaid is a welfare program. The political support for providing aid to people in need has significantly waned. The shift toward the emphasis on individual responsibility began before President Bush took office, as it was President Clinton who set out to “end welfare as we know it.” The issues are much more political than they are partisan.
Low-income individuals lack a forceful political voice. A tax-funded health insurance program designed specifically for them will always be vulnerable to the budget-cutting process. Since adjustments never match the rate of inflation, underfunding is compounded over time.
With increasing financial losses for those caring for Medicaid patients, the number of willing providers declines. Concentrating money-losing patients amongst fewer providers is creating a variation of the death spiral since the increases in losses are not sustainable. As providers withdraw, impairment of access and outcomes is inevitable.
The federal government and the states are not going to search for new revenue sources to pump up the Medicaid budget. Instead, the search is on for benefit reductions that address budget issues rather than health-care needs. The problems of Medicaid will only grow worse. We don’t need more partisanship, but we do need constructive politics to make it happen.
Rather than a welfare program, low-income individuals should be placed in an equitable, universal system of social insurance. Just as our current social insurance program - Medicare - has strong political support, so would a universal, single-payer Medicare for All.