By David M. Herszenhorn
The New York Times
November 1, 2009
Once Ms. Pelosi realized that she could not get a robust public option, she needed another way to reduce the billâ€™s cost. The answer was a wider expansion of Medicaid, the state-federal insurance for the poor.
In just one of the counterintuitive concepts in the health care debate, enrolling more people in Medicaid saves money because it is cheaper than subsidizing private insurance, and because states share the cost.
The House bill would increase total Medicaid costs for states by $34 billion. States, of course, object to such added expenses.
By Don McCanne, MD
The version of the House health care reform bill released last week would further expand Medicaid eligibility to individuals with incomes up to 150 percent of the federal poverty level. This expansion was prompted by the self-imposed requirement to avoid any deficit spending as a result of this legislation. It will cost the government less to enroll these individuals in Medicaid than it would cost to provide them with subsidies to purchase private health plans.
Some implications of this policy:
* Medicaid benefits are more comprehensive than private plans and cost sharing is negligible, unlike private plans. Medicaid patients have more care covered with much less in out-of-pocket costs.
* Taxpayers will be paying less to provide these individuals with Medicaid than they would have paid in subsidies to purchase private plans. Private plans are more expensive even though they provide less coverage.
* As a welfare program, representing a population without an audible political voice, Medicaid is chronically underfunded.
* Inadequate reimbursement rates due to inadequate funds results in a lack of willing providers. Too many physicians are not willing to accept the losses under this program. This lack of providers impairs access to care.
* Many states are struggling with budgets burdened by massive Medicaid spending. Although this expansion would use federal funds initially, some of the financing burden would be shifted to the states even though they do not have the budget flexibility of the federal government.
On paper, Medicaid looks like a great program. It provides a generous benefit package for lower-income individuals who cannot afford to purchase private health plans. In reality, most Medicaid patients do not have the same access to essential specialized services that wealthier privately insured individuals do, and access to even basic services is often compromised.
Expanding the Medicaid program further locks in a tiered health care system, effectively providing less for the least amongst us. In health care, that’s simply not acceptable.