Medicaid Policy
Published by Al Adomite on July 8th, 2008
I try to keep posting on this blog separate from my work. There’s an opportunity to post things about my work over at my work website. But, I thought this issue begged for a post here, as it’s a public policy issue that has been percolating for some time.
I can remember talking with local doctors nearly five years ago about the squeeze on the economics of medicine: litigation/insurance eating at any profits on one side and medicaid cuts shrinking revenues on the other side. Medical “profit” (if you want to call it that) was being squeezed, especially when you consider the high cost of student loans for many doctors.
Fast forward to 2008. In Illinois, the Governor - cheered on by groups like the Kaiser Family Foundation - has led the charge to extend public-funded healthcare to a larger number of recipients in Illinois. Other states have followed this course, as well. At least for this argument, let’s leave out the pros and cons of the Gross Receipts Tax out of this argument’s equation, but just state that many states are looking to expand medicaid but are finding it difficult to find new revenue sources for the expansion.
But, it’s not just Democrats who have expanded these programs, as President Bush and the GOP got into the act by making expensive changes to Medicare, as well. And now the federal programs are in a financial crunch and federal funds affect state funds in many states, as well.
I worry the result of these policies mirrors this exchange, from ABC News:
For the past four years, Dr. Heather Tipsword has owned a family practice clinic that primarily treats Medicaid and Medicare patients in Oklahoma City. As many of her friends and family were looking forward to Fourth of July celebrations this past weekend, Tipsword was anxiously looking forward to another event altogether: Congress’ meeting on the Monday after the holiday weekend to discuss some kind of fix to the scheduled 10.6 percent Medicare reimbursement cut.
To Tipsword, this round of Medicare reimbursement cuts, to become effective July 15, could make or break her family practice. (In many states, these cuts affect Medicaid too.) [...]
Tipsword is not alone. The Houston Chronicle reported last week that more and more Texas doctors are opting out of Medicare due to growing cuts in reimbursement. And the trend is not limited to Texas doctors. Primary care doctors from around the country have told ABC News that they too are either opting out of treating Medicare patients, or are preparing to do so if Congress once again OKs slashing reimbursement rates.
In a nutshell: If the government continues to open taxpayer-funded medicine to more people (thus increasing the demand), yet reimbursement rates continue to fall (or the time delay for reimbursement gets longer) due to lack of funds, the result is fewer doctors willing to take part in these programs (thus less supply of available medicine to the participants). Isn’t this a problem that elicits bipartisan concern?
The worst part is that the lower-income participants who need to the care most and have been participants for much longer are faced with the same lack of access to medical care than the recently enrolled participants who now qualify because of the increased financial thresholds.
According to the American Medical Association (AMA), reimbursements that have been reduced every year for nearly a decade have slashed physician payment rates by about 40 percent. Meanwhile, the cost of practice rises annually. The AMA estimates that this year practice costs will increase by 20 percent.
And according to a 2007 AMA survey of 8,955 physicians in the United States, 60 percent of doctors said they plan to limit the number of new Medicare patients and 40 percent of doctors said they plan to limit the number of established Medicare patients that they treat if Medicare payment rates are cut by 10 percent in 2008.
I’ve heard anecdotal stories from some local doctors of parents who moved coverage of their kids from their work insurance to save money and then found that their doctor didn’t accept AllKids when they took their kids to get school physicals last fall. Then, parents faced the (hardly fun) task of finding a doctor who would take medicaid and then trying to get an appointment on short notice.
So, the economic “squeeze” for doctors becomes a medical access “squeeze” for low-income patients. Now it looks like it could spread from Medicaid to Medicare, meaning older Americans will feel the “squeeze” too.
Here’s a primer on some of the Illinois medicaid expansion, though remember that “AllKids” is law, however “Illinois Covered” is the proposal that was never legislated, although the Governor has continued to try to implement parts of plan without legislative action. And remember that the some of economic consequences of these expansions has been hidden by carrying over bills from one fiscal year to the next, as discovered by the Auditor General.
It’s a lofty goal to increase taxpayer-funded medicine to citizens at 400% of the poverty level ($82,600 for family of four in 2007). But, in Madison County, the median household income in 2004 was $45,326. Are we really being fair to bring medicaid eligibility to (much) more than half of all citizens if it’s severely limiting access to medical care to those who need it the most?
Filed under State Issues
July 8th, 2008 at 5:11 pm
Medicare/Madicaid cost are out of control. There needs to be a comprehensive overhaul of the programs. At the current increase in annual cost, the cost of the programs will double in less than eight years. The programs will become financially insolvent, unless massive tax increases are put in place.
There should be a greater push to have these programs operate on a market driven basis to help reduce cost.
I am sure we will be seeing large tax increases at the federal and state level, after the election is over.
Nothing like large tax increases to drive the economy in the ground.
But, Democrats just love to increase taxes/fees.