Dems Plan Big Medicaid Boost, But Rates May Spur Shortages
By JED GRAHAM,
Amid raging debate over the public option and Medicare cuts, the vast expansion of Medicaid that Democrats are close to passing into law has gotten little attention.
Under the Senate bill that is the focus of negotiations with House leaders, the ranks of the poor and near-poor covered under Medicaid are projected to grow by 15 million in coming years — fully half of the total increase in coverage.
That would boost the Medicaid population by 43% and could greatly add to already-significant stresses on Medicaid providers and patients. The potential cost of addressing Medicaid's shortage of providers — or cost-shifting if it is unaddressed — is among the reasons why the $900 billion-plus cost of the health care overhaul may be understated.
A recent survey from the Center for Studying Health System Change found that only 40% of physicians accept all new Medicaid patients compared with 58% who accept Medicare patients.
The difference reflects, in part, Medicaid reimbursement rates that Urban Institute researchers estimate to be 40% below those of Medicare.
In an acknowledgment of the problems that could arise as Medicaid rolls swell, the House threw in $57 billion over 10 years to make Medicaid's rates for primary care providers equal to Medicare's.
But the Senate, in trying to stay reasonably close to President Barack Obama's suggested $900 billion price tag for the health care overhaul, didn't kick in any funds to raise Medicaid payments. Now, as House Democrats try to squeeze more dollars out of Senate negotiators, the fix for Medicaid's low rates isn't at the top of their publicized list of priorities.
"Medicaid has always been a program that is an afterthought in the health debates," said James Capretta, a Bush administration budget official now serving as a health care consultant and fellow at the Ethics and Public Policy Center.
The vast expansion of the program "carries the risk that you are going to have an inferior network for people of lower income," he said.
While Democrats are aware of such a risk, they see at least two strong reasons for taking it.
One is budgetary restraint: Capretta notes that coverage expansions through Medicaid cost less than private coverage expansions.
Secondly, liberal policy experts believe Medicaid's benefits are suited to the needs of the near-poor, both because of affordability and services for those with disabilities and chronic conditions.
However, the liberal Center on Budget and Policy Priorities is among the policy groups that have advocated an increase in payment rates amid coverage expansions.
"It is essential that payment rates be brought up to levels sufficient to encourage more providers to participate in the program. This is critical to ensuring access to necessary services," the center wrote in a February report.
Even the extra $57 billion provided in the House bill would probably be "a drop in the bucket" in making Medicaid rates comparable with Medicare, Capretta said.
A May report from Urban Institute researchers backs him up, noting that the cost of raising Medicaid rates to on par with Medicare's would have boosted Medicaid's spending on acute care by $20 billion in 2009 alone — even before Medicaid's population swells.
Community Centers
The Senate hasn't ignored the potential access problems that Medicaid patients could face. In return for his vote, Vermont Sen. Bernie Sanders, an independent and socialist, secured $10 billion in new funding for community health centers. The House bill provides $14 billion for community health centers.
"If you expand Medicaid and if you expand health insurance in general ... it doesn't mean much if people can't find a doctor or they can't find a dentist," Sanders told reporters. "And what we have managed to accomplish is substantially increase community health centers; 10,000 communities in America as a result of this legislation will now have access to community health centers."
Republicans have argued that expanding Medicaid will only exacerbate cost-shifting and raise premiums and out-of-pocket costs for the insured. A Milliman study in 2008 found $40 billion in annual cost-shifting due to low Medicaid payment rates.
Critics also argue that states are in no position to absorb their share of the additional Medicaid costs under the bill. The Congressional Budget Office estimates that state Medicaid costs would rise by a cumulative $26 billion through 2019.
The federal government would pick up Nebraska's share of those costs under a deal to secure Sen. Ben Nelson's vote that the GOP dubbed the "Cornhusker Kickback." Other states are lobbying for the same sweetheart deal. Nelson now says that was his intention all along. |
