Policy Feature Issue: Medicaid – What the Administration Is Not Telling You

Medicaid has historically been a federal/state partnership to ensure that the most vulnerable populations in America have access to healthcare.  For nearly a half century, low-income pregnant women, children, elderly, and disabled populations have had access to a range of mandatory services, including in and out patient hospital services, services provided by physicians and laboratories, nursing home, and home health care.[1] In fact, since 2009, Medicaid has covered more Americans than Medicare.[2]  In FY 2013 alone, 72 million Americans will be enrolled in Medicaid at some point.[3]  While the cost of the program is shared between states and the federal government, federal contributions have historically averaged about 57 percent of total program’s costs. In 2012, federal spending reached $251 billion in FY 2012.[4]

What the Administration is Not Telling You:

Beginning 2014, Obamacare will make this safety net less about helping vulnerable Americans and more about crowding tens of millions of individuals onto an already struggling program.  Why else would the federal government bribe states by paying 100 percent of the expanded program’s costs through 2017 and then 90 percent after 2020. [5]   Already, 440,000 individuals have enrolled in the program over the last six weeks.  This number doesn’t even take into account the thirty six states using the federal exchange.  Problems with the HealthCare.gov website have also impacted Medicaid, leaving states uncertain as to the true number of new enrollees.[6] CBO projects that the Medicaid program will draw as many as 91 million Americans, including 34 million adults, by 2023.[7] CBO estimates that federal spending for the expanded program will reach $510 billion by 2023.[8]

Why Does This Issue Matter?

Some may ask why this matters. First, federal and state budget resources are scarce. The federal deficit in FY 2013 fell below one trillion dollars for the first time since 2008.[9] In contrast, Medicaid spending in FY 2103 continued to increase by $15 billion or six percent.[10]  States continue to address shortfalls. As states have dealt with budget issues, Medicaid provider rates and benefits have been among the first aspects of the program to be cut. Medicaid physician reimbursement rates are already below those of Medicare.  In most states, one out of every three doctors will not accept new Medicaid patients.[11]

Putting tens of millions of additional individuals on Medicaid will make an already struggling health care program even worse.  Moreover, states are now forced to pay for the increased costs associated with those previously eligible residents who never bothered to enroll but for the individual mandate, further crowding out funding for other state priorities.

As many have said, particularly over the last three years, having health care coverage does not necessarily guarantee quality health care. Moreover, spending more does not necessarily guarantee a sustainable program.  Medicaid is the perfect example.