The Failure Of Medicaid

The idea of Medicaid was a good one -- to make sure the poor are able to get the medical insurance that they cannot afford any other way. But in practice, the program is a failure in many states. That's because the states have been put in charge of deciding who qualifies for the program and how much a doctor will be reimbursed for treatment. Some states have made it very hard to qualify for Medicaid, leaving many people without any kind of medical insurance, and other states reimburse doctors at such a low rate that it just doesn't pay them to accept Medicaid patients -- and some states do both.

The top chart shows the national figure for doctors refusing to accept any new Medicaid patients (or any Medicaid patients at all). The sad fact is that as many as one-third of doctors nationwide are refusing now to accept Medicaid patients -- meaning even if a person is able to qualify for Medicaid, it can still be difficult to find a doctor willing to treat them for what Medicaid will pay ( which in some states can be half what private insurance pays, or less).

The bottom chart shows the percentage of doctors in each state willing to accept Medicaid patients, with the states in red having the best percentage and the states in blue having the worst percentage (you can click on the may to get a larger version). It should come as no surprise that the states in red are also the states that pay the highest fees compared to private insurance (usually 70% or even higher).

The health care reform (usually called Obamacare) was supposed to fix Medicaid's problems, by making millions more people eligible for Medicaid and giving the states more money to run the Medicaid program. But thanks to a Supreme Court decision and the failings of Obamacare itself, it looks like all the problems were not fixed. The Supreme Court decision allowed states to refuse the new Medicaid eligibility and the money that comes with it, and just continue the program already in place.

Sadly, several states where Republicans are in charge have already said they will refuse to participate in upgrading Medicaid, and will continue their current program (and too many of those states are the blue ones, like Florida and Texas). In those states, millions of the poor will still have to survive without any medical insurance at all -- and even those lucky enough to qualify will continue to have trouble finding a doctor willing to treat them.

The failing of Obamacare is to leave the Medicaid program to be run by the individual states. This allows governors and state legislatures to play politics instead of covering people with insurance and paying doctors reasonable reimbursement.

I believe two things need to happen. The first is to make Medicaid a federally-operated system (like Medicare). This will give people in all states the same opportunity for coverage. But that won't completely cure the program. Note in the top chart that over one in four doctors also refuse to accept new Medicare patients. That's because although Medicare reimburses doctors a little better than Medicaid, it is still inadequate. The second thing that must happen is to adequately fund both programs, so more doctors would be willing to accept patients with both Medicaid and Medicare.

Unless both of these things are done, the goal of Obamacare (to cover most American with decent and adequate medical insurance) will not be achieved. Of course the most sensible thing would be to just cover all Americans with a single-payer government-run health insurance program (regardless of status or income). But short of that (which will come someday), the best we could do is to move Medicaid to federal administration and fully fund both Medicaid and Medicare. Letting people die because they can't afford health insurance is not an option (and only a Republican would think it is).