FEATURED RESEARCH, TESTIMONIES AND ANALYSIS:
ADDITIONAL RESEARCH, TESTIMONIES, AND ANALYSIS:
Medicaid is a means-tested entitlement program designed to provide low-income Americans with basic health care. Enacted in 1965 through Title XIX of the Social Security Amendment, Medicaid was created to help bridge the living standards between rich and poor as a part of President Johnson’s war on poverty.
Since its enactment, Medicaid has grown to be a multi-billion dollar program, and a major portion of both state and federal budgets. In 2009, over 60 million people were covered by Medicaid for at least one month, or about one in every five U.S. citizens. The Centers for Medicare & Medicaid Services (CMS) projects that by 2019, enrollment will increase to almost 80 million.
Fee-for-service (FFS) reimbursement is at the heart of what is wrong with the Medicaid program. By underpaying providers for uncoordinated care, FFS has impaired patient access, led to lower quality outcomes, and hampered efforts to instill greater program accountability. This paper makes the case for moving to managed care in Medicaid to deliver more consistent and higher quality care.
Without substantial Medicaid reform, Obamacare will result in a human and fiscal disaster. Medicaid coverage looks much better on paper than it does in reality. The program often pays only 70 percent of what Medicare pays physicians—which itself is about 20 percent below private rates—and reimbursement is slow. Small wonder, then, that more than half of primary-care physicians and 35 percent of specialists have either limited the number of Medicaid patients they see or refused to accept new ones.
The Patient Protection and Affordable Care Act expands insurance coverage in the United States. Importantly, the Obama reform coverage expansions are built around a strategy of expanding Medicaid. These expansions are problematic in a variety of ways. They are likely to dramatically expand the use of emergency room care, as Medicaid’s low reimbursement rates limit beneficiaries’ access to primary care physicians. In doing so, they will expand – not reduce – the overall economic cost of the U.S. health care system. We estimate that the emergency department impact alone will generate 68 million visits and add $36 billion to the nation’s healthcare bill. These additional costs will pose a financial threat to state budgets and hospital finances, especially as the reform law reduces funding dedicated to reimbursing hospitals for uncompensated care.