Tuesday, August 7, 2012

Three More Reasons Medicaid Is (Already) Unsustainable

In the past week, three separate news stories have demonstrated how the Medicaid program – on which much of the coverage expansion in Obamacare is based – is fundamentally unsustainable.  To wit:

  1. Nearly One Third of Doctors Reject Medicaid Patients; Low Reimbursements an Issue:  An article published in Health Affairs yesterday (subscription required) found that nearly one-third (31%) of physicians are not accepting any new Medicaid patients; by comparison, under 20 percent of physicians are not accepting any new patients with Medicare or private insurance.  The study also found that “acceptance rates of new Medicaid patients were higher in states with higher Medicaid-to-Medicare fee-for-service fee ratios.”  In other words, many doctors choose not to participate in the Medicaid program – and a problem exacerbated in states with low Medicaid reimbursement levels.
  2. States Are Already Cutting Access to Drug Services for Existing Medicaid Beneficiaries:  Kaiser Health News reported last week that “Illinois Medicaid recipients have been limited to four prescription drugs as the state becomes the latest to cap how many medicines it will cover in the state-federal health insurance program for the poor.”  A total of 16 states impose monthly limits on prescription drugs for beneficiaries, “and seven states have either enacted such caps or tightened them in the past two years,” due in part to the lingering impact of the economic slowdown on state budgets.
  3. States Believe Obamacare Will Impose Additional Costs on their Medicaid Programs:  A survey of states, conducted as part of a GAO report on Obamacare’s Medicaid expansion, found that “the majority of state budget directors believe that three aspects of Medicaid expansion will contribute to costs: 1) the administration for managing Medicaid enrollment, 2) the acquisition or modification of information technology systems to support Medicaid, and 3) enrolling previously eligible but not enrolled individuals in Medicaid.”  While more than 30 budget directors believe these three provisions of Obamacare will cost states, a much smaller number believe provisions in Obamacare will save their states money, as the chart below demonstrates:

Medicaid is already unsustainable – states cannot afford their current programs, and have lowered reimbursement rates and imposed new restrictions on things like pharmaceuticals, both of which impede beneficiary access.  Yet Obamacare is placing even more fiscal burdens on this already fiscally troubled program.  That’s not health “reform” – that’s the furthest thing from it.