Dangers Of The Medicaid Illusion

Forty-two years before the Patient Protection and Affordable Care Act, Earl K. Long Hospital opened its doors in Baton Rouge, La., promising access to health care for Louisiana’s poor and uninsured. As a provider of last resort, the state-run hospital’s principal mission is serving those who cannot get access or pay for care anywhere else.

The hospital has dedicated and caring doctors, nurses, technicians and support staff. It serves as a teaching hospital for Louisiana State University’s Medical School. But its physical plant is in disrepair. For inpatient care, four patients typically share a single room and bathroom. Asbestos limits major renovations. The main entrance once went months with only one of its double doors, giving the hospital’s facade a gap-toothed steel and concrete smile.

Those with health insurance do not go to Earl K. Long Hospital.

Why then do more than half of the patients I see when I’m teaching medical residents there have Medicaid? If they have Medicaid, which presumably is health insurance, why choose this hospital? My Medicaid patients do not choose Earl K. Long Hospital. Medicaid chooses Earl K. Long for them, because it does not provide access to health care anywhere else.

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.

In 1996, a Republican Congress passed and a Democratic president, Bill Clinton, signed a sweeping reform of the nation’s welfare program. During the 20 years before welfare reform passed, the population of welfare recipients grew 31 percent, the cost of the program grew 62 percent and welfare benefits were slashed for impoverished mothers.

Welfare reform was necessary but not easy. It was vetoed twice. But the Republican Congress and Democratic president gave and took enough to accomplish significant good — for both taxpayers and welfare recipients.

Before the start of the Great Recession, evidence suggests that welfare reform succeeded in lifting families out of vicious cycles of dependency, reduced poverty rates and put the entire program on a more stable financial footing.

The next two years offer a similar opportunity for another Democratic president and a new Congress to fix a program that is broken and is failing Americans whom it is intended to serve.

This piece originally appeared at POLITICO.



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