Medicaid: facing a tough roadEconomics, Fiscal Policy, Health Care, Policy — By Online Editor on June 11, 2010 at 9:15 AM
(The Heritage Foundation) In passing Obamacare, Congress has put the states in quite a pickle. To sharply expand health coverage, Obamacare flung wide the gates of Medicaid eligibility. It envisions a massive expansion of the federal-state health program that, historically, delivers low-quality care to low-income Americans.
Not a smart move.
States were already struggling to meet their share of Medicaid program costs—even though Medicaid payments to providers often don’t even cover the cost of care. And, due to the inadequate reimbursement rates, more and more doctors were already refusing to accept new Medicaid patients.
How fiscally shaky is Medicaid today? Well, last year Congress used the stimulus bill to give states $87 billion to help them cover rising Medicaid costs. And that doesn’t seem to be enough.
A recent letter from House Democrats encourages their colleagues to give states another $24 billion to help them cover Medicaid costs for another six months. “Without this funding,” the letter says, “our states will be forced to make severe cuts to Medicaid providers and benefits, and the ensuing budget shortfall would have grave consequences for school funding and other essential state programs.”
Remember, all this special assistance to just to help states cover the cost of their current Medicaid programs. Yet Obamacare assumes that somehow this fiscally spavined, poorly performing “workhorse” program will be able to finance health care to millions more. None of this extra Medicaid spending is part of that “deficit-reducing” Obamacare.
But back to Obamacare. Please recall that the federal taxpayer is required to foot the entire bill for the big expansion that starts in 2014. But after 2016, states will be on the hook to pay their share of a massively larger program.
As the letter from House Democrats notes, “without federal support for Medicaid programs, states and territories will not have the resources they need to successfully implement health reform.” Duh. Maybe they should have thought about that before passing Obamacare.
Rather than expand a badly functioning program, Congress should have pursued systemic reforms that would allow Medicaid to function better for those already in the program. As it is, taxpayers can expect Congress to keep reaching into their wallets for more bailout money when the state cost-sharing provisions of the expansion kick in. That means taxpayers will receive ever less bang for the many bucks they shell out to pay for low-quality, government-run health care.