Medicaid exists to give low-income families, especially low-income mothers and their children, access to health care. But for millions of Americans, Medicaid is an illusion. It is the appearance of coverage — without the power of access. The program is administered by states and funded jointly by states and the federal government. And it is bankrupting both, along with physicians and hospitals.
Last year, the federal government spent $251 billion on Medicaid. Washington’s Medicaid tab is expected to rise to $458 billion by 2019, according to the Congressional Budget Office. For state governments, most of which must balance their budgets annually, Medicaid’s escalating growth is ruinous. Responding to rising costs and budgetary pressures, 48 states were forced to adopt “at least one new policy” to restrict their ballooning Medicaid costs in 2010, according to the Kaiser Family Foundation.
Twenty states adopted Medicaid benefit restrictions, and 14 signaled intent to cut benefits next year. Thirty-nine states imposed a provider rate cut or freeze this year, and 37 plan to do so in 2011 — despite the fact that Medicaid pays providers significantly less than any other insurer and frequently less than cost.
Consequently, patients suffer. In a March 15, 2010, article titled “As Medicaid Payments Shrink, Patients Are Abandoned,” The New York Times chronicled the experiences of several patients whose Medicaid coverage would not cover needed care. One was Carol Y. Vliet, who could not find a doctor to treat her metastatic cancer after Michigan imposed yet another round of Medicaid provider payment cuts. Vliet died seven days after the article appeared. Cases like Vliet’s are now all too common among Medicaid patients. A recent study of surgical outcomes found that patients are roughly as well off having Medicaid as they are having no health insurance, and “Medicaid payer status was associated with the longest length of stay and highest total costs” of any payer source.
All this is before the Patient Protection and Affordable Care Act, which would put 16 million more Americans on Medicaid. Once the new law is fully in effect, roughly one in five Americans will carry a Medicaid card. But the combination of rapid beneficiary growth with benefit and provider cuts threatens to render their cards useless.
