Medicaid Expansion Is Untenable Until Radically Improved
Medicaid, which provides its enrollees with inferior care, forces many to use emergency rooms for primary services because of substandard physician pay. Presently it also causes a severe financial drain on both federal and state governments, in 2020 costing 7% of federal and on average 1/3 of state budgets. The program needs serious overhauling to properly care for those in need while conserving scarce resources. Thoughts of expanding Medicaid in its present inferior state to meet the healthcare needs of those below a certain income and uninsured may make some in Congress feel benevolent when, in reality, they may be doing harm, especially if a better alternative is available.
Medicaid created along with Medicare in 1965 initially was approximately a 50/50 funded federal/state program. The Affordable Care Act has added millions of recipients financed 90/10 federal/state by raising the eligibility to 148% of the federal poverty level. The program is intended to provide care for those eligible via financial criteria who are disabled, pregnant, in chronic care facilities, children, and others. There has been a dramatic increase of Medicaid recipients over the past 30 years, from 9.7% in 1990 to 17.8% in 2020. It is striking that politicians and various lobbying groups proposing expansion of the program do not seem to be concerned that instead of decreasing the numbers of Americans needing government paid healthcare those in need have increased over the years. Some of this increase is due to increasing benefits, but because of a number of bureaucratic snafus there are also ineligibles in the program costing about $100 billion/year. With inflation, servicing a huge federal debt with rising interest rates and a recent renewed demand to increase defense spending, future Medicaid spending cannot continually increase. Certainly, under these conditions further expansion of present Medicaid is untenable.
As Medicaid payments to hospitals are extremely complex, the Kaiser Family Foundation (KFF) estimates about a 93% shortfall below hospital costs. Thus, private insurance subsidizes this care causing premiums to increase resulting in employers paying more for employee coverage decreasing their take home pay. There is no doubt that these necessary services are desperately needed, but we need a different approach if they are to continue.
Fortunately, there has been an extremely successful pilot (2007-2012) Medicaid experiment in Indiana that provided far better care at significantly less cost for Medicaid recipients. In essence each Medicaid recipient was able to enter the private care model by receiving a means-tested federal/state deposit into a health account. The individual also deposited a token amount assuring seriousness of use. From this account the individual was able to pay cash for most care including doctor visits (direct care is so desired). Nationally available catastrophic insurance with the deductible less than the yearly deposit is also paid from this account. The program was widely successful in popularity, providing better care at far less cost. Hospitalized patients should also pay 1% of charges thereby creating oversight and transparency of hospital costs.
The growth of individual Americans needing the Medicaid program must be a wake-up call that we are not preparing millions of our citizens to be productive members of society. It is enormously important that this be seriously addressed, especially the education of our young so that they will be able to successfully function in a modern economy. It is equally important that our Medicaid dollars are within our means and allow recipients to obtain high quality care. Our present Medicaid program does not meet these criteria and certainly should not be expanded in its present form.
Kenneth A. Fisher M.D. is a Physician, Nephrology Consultant, and Author of 'Understanding Healthcare'
