Medicaid - The Growing Morass

[This article was published in the June 2015 issue of The Nugget of the Nevada County Republican Women Federated, and is reprinted here with permission.  Its author is the Legislative Chair and 2nd VP of that organization.]

Jo Ann Rebane

Medicaid today has been described as a costly medical insurance financing scheme jointly funded by federal and state government general funds that delivers poor quality care to “qualifying” low income people.

A little background:  In 1965 a Democratic Congress created the Medicare parts A and B and Medicaid programs in response to President Lyndon Johnson’s “War on Poverty”.  Unlike Medicare, Medicaid does not have any independent revenue source or trust fund, enjoying open ended access to the federal government’s general fund with no defined limits.  Over the years Medicaid eligibility standards have loosened and enrollment numbers have increased.  And philosophically Medicaid has been viewed by some as a first step in government supplied universal healthcare that establishes a “right” to healthcare.

Medicaid is a means-tested program which in 2013 paid for medical and long-term care for some 72 million low income individuals, children, disabled, and elderly - one fifth of the US population.  All states have elected to participate in Medicaid, have established and administer their own programs, agree to pay for services provided to enrollees and thereby have a legal right to federal matching payments for those medical services with no upper limit.  Federal reimbursement rates to the states are a percentage tied to state per capita income.  California enjoys a 50% reimbursement rate and in 2011 received more than 12% of all federal Medicaid spending.  With enactment of Obamacare, states are encouraged to expand Medicaid to all US citizens and legal residents with income up to 138% of the poverty line, with the federal government covering all expansion costs only through 2016. 

State programs must offer a minimum set of medical benefits. But states are free to impose their own income thresholds and enlarge the scope of services beyond those mandated, as well as determine whether to require premium payments, copayments, and deductibles in response to their own unique economic and political pressures.  The impact on federal spending, because of the matching formula, is directly affected by the design of the several states programs.  The matching regimen provides little incentive for states to reign in program costs.  The Association of State Budget Officers estimated that Medicaid was 23.9% of all state government spending in 2012, more than spending on elementary and secondary education which averaged 19.8%. 

California’s Medicaid program, Medi-Cal, covered about 11 million people as of mid 2014, which is about 30% of all Californians. While Medi-Cal provides vital benefits to low-income residents, the program’s size strains state resources.  Medi-Cal expenses exceeded $50 Billion, half of which was reimbursed by the federal government in fiscal 2012 and in 2014-15 will require $29 Billion (the unreimbursed portion) or 27% of the state’s general fund.  

Closer to home in Nevada County, as of last month 19,819  residents or 20% of the population is enrolled in Medi-Cal, up from 11% in 2013 due to expanded access from Obamacare.  The 38 “eligibility” employees from the Health and Human Services agency, among their other tasks act as state agents to determine the eligibility status of potential enrollees. The county is reimbursed by the state for that service.  Locally, 3 Federally Qualified Health Centers like Western Sierra Medical Clinic and Sierra Family Medical Clinic accept patients covered by Medi-Cal as do our two hospitals (Truckee and SNMH), facilities which have not expanded to handle the increased patient load.  (I appreciate the assistance of Alison Lehman and Martin Polk of the County Executive’s Office providing this and other information.)

Nationwide Medicaid enrollees complain of difficulties getting timely appointments from the few doctors who still accept the very low state payment schedules.  An American College of Emergency Physicians recent survey notes since inception of Obamacare and the increased numbers of people covered by Medicaid, more patients are ending up in the ER where crowding has been linked to longer wait times and poorer outcomes.  Moreover, without an economic turnaround, the ranks of the poor will not shrink.  Actuaries from the Centers for Medicare and Medicaid Services (CMS) predicted Medicaid expansion would “… greatly increase demand for health services, and soaring demand always increases prices and costs.”  Whether from rising healthcare costs, changing demographics, increased eligibility, service expansions, and/or waste, Medicaid continues to become a larger share of states’ and the federal budgets.  And therefore is an unsustainable solution to provide healthcare services, let alone quality healthcare.

There’s no argument that the poor need healthcare, and until we find a better way, government, as a last resort, will provide it.  But, in my view, the current set-up needs to be revamped.  As with most state/federal programs, politicians, in order to secure votes have promised more services for more people, year after year.  Added program services strain budgets.  In order to pay for the expanded programs, other programs must be cut, taxes increased and/or debt levels raised.  Without reform, Medicaid is a system which harms all of us - federal and state taxpayers, healthcare providers, and the poor.  We all lose.

Comments

[drivebyposter]

A couple of charts to think about, no solution implied.

http://www.oftwominds.com/photos2013/medicaid8-13x.png

http://theincidentaleconomist.com/wordpress/wp-content/uploads/2012/12/HCcostsbyAge.png

[Account Deleted]

A useful tool for anyone who cares about reality would be the projected cost of medicare and medicaid from the smart guys that foisted it on us and the actual costs. Anywhere from 5 to 8 times would be the norm.
That's pretty typical of anything from the govt. Anyone care to look up what BART was supposed to cost and then have a little look-see at what it actually cost. Yet anyone who dares to bring this up at the onset of any great new govt program is accused of all sorts of evil intent.
I'm sure we can provide health care for those with little or no money, it just can't be private or semi private rooms and an attorney at the ready to sue for every small mistake. How about Euro-style wards and no attorneys? Suddenly the european health care system is not to be discussed.

[Bill Tozer]

If we ever build the tunnels under the delta to carry water south, the projected cost of yearly maintanence is a couple billion a year. Add just the maintance costs of the Brown Streak and you get the idea that a 30 year bond to build such things on borrowed money usually triples the actual repayment over the 30 year loan, plus yearly maintamce. That is if it stays within budget and is completed on time without cost overruns. What a joke.
We don't have that kind of mula laying around in the sock drawer, not to mention just the mere maintance and material expenses along with additional government employees and pensions over the next 30 years. Then we can rebuild it again and again.

A couple of days ago I posted the Kaiser survey that said 44% of Covered California enrollees have a "difficult time or very difficult time" paying their premiums, some as low as 70 smackers a month. Premiums rose just 4.7% over the past year and get ready for another increase in Covered California premiums as the State starts negotiating in June (this very month) for next year.
Oh boy o boy" I thought, "soon we will be paying for those 44% as well as all the immigrant children of illegal aliens." How much more do we need to pay through the nose so everybody gets "affordable healthcare, food, transportation, housing, and cable TV with wi-fi? Too much to even fathom. I know one thing. The beneficiaries won't be paying for these "rights", so I better hunker down and save for a rainy day.

States have learned. When unemployment benefits run out, throw them on SSI disability. That gets the state's off the hook for paying their Medicaid and fast tracks them straight to Medicare. The government will pay for it, not U.S. taxpayers. Somebody has to do something or heads will roll. Our Great Leader in Washington will pay, not those nameless faceless selfish heartless taxpayers struggling themselves to make it on their own. Liberals have it all figured out. Yep, it's going to get real expensive for us little ignorant grunts paying off the mountain of debt and everybody' else's tales of woe, wants, needs, and responsibilities they are so incapable of dealing with.

[Bill Tozer]

Medicaid, the growing morass. I just cannot seperate Medicaid from The Afforable Healthcare Act because the two are so intertwined. Like I said, overhead and premium increases affects the taxpayer much more than the enrollee, in the true picture of what is happening.

http://www.cnbc.com/id/102707721

http://www.forbes.com/sites/brucejapsen/2015/06/01/obamacares-double-digit-rate-hikes-for-2016-disclosed/?utm_campaign=yahootix&partner=yahootix

Since Medicaid and subsides pick up the lion's share of the real tab, when can we stop calling it the Afforable Health Care Act?

[Patricia Smith]

We could pull enough money out of our bloated defense budget to pay for quality health care for every American. Why is it OK to pay for other nation's defense, but ingore the needs of our own citizens?

[George Rebane]

PatriciaS 911am - Perhaps contributing to other nations' defense has been an instrumental and successful foreign policy investment that complements and abets our government's constitutional obligation to provide for our national security as accepted by both major parties over the decades. However, there is no constitutional mandate or even a provision to permit the federal government to "pay for quality healthcare for every American."

[Bill Tozer]

Sort of on topic. First The Commonwealth of Massachusetts and now Hawaii. The Affordable Care and Patient Protection Privacy Act is really screwing up a good thing those states had. Big Brother Pig Government can't run nothing with efficiency. The Beast is just too big and Big Pig had not learned that one size does not fits all, be it education or heath care. Oregon, Maryland, and even little progressive Connecticut have found this out the hard way. Gotta shed a tear for the blue states, as some had a good thing going.

http://www.huffingtonpost.com/2015/06/06/hawaii-health-insurance_n_7524426.html?ncid=txtlnkusaolp00000592