Bush’s Final Medicaid Reform Increases Patient Responsibility

The Bush Administration’s (or the Bush “regime’s”, if you prefer) theme in Medicaid reform has been to give states more flexibility in how they operate their Medicaid programs, despite the federal government paying over half the cost.

In its (likely) final hurrah, the Administration recently published Medicaid rules allowing states more flexibility in charging co-payments to beneficiaries for services. Previously, these had to be “nominal”. Under the new rule, which the New York Times claims is a “sea change in Medicaid”, they can be higher.

Wow! What is this “sea change”? Declining coverage of aromatherapy? Mandatory diet counselling and exercise classes? No: For those in households earning less than 100% of the Federal Poverty Level (FPL), high-cost services will be subject to a co-pay no greater than $3.40 per service (“no greater than” being the key term here: no state is required to save its taxpayers’ money by implementing these changes). For those in households earning between 100% and 150% of the FPL, co-payments can be as much as 10% of the total cost; and for those in households earning over 150% of the FPL, co-payments can be up to 20%. In no case can total annual out-of-pocket payments be more than 5% of a household’s income.

From the howls of interest groups dependent on government handouts (cited in the New York Times), you’d think Medicaid beneficiaries were going to be shipped to Guantanamo Bay to clean out the toilets. The streets will crawl with Medicaid unfortunates, unable to pay their medical bills, no doubt.

Hogwash: Event the Commonwealth Fund, which thinks that giving patients more control over health-care dollars has resulted in an epic of (mythological) “underinsurance”, defines the “underinsured” as those with health expenses greater than 10% of household income, not 5%.

The real scandal of the latest Medicaid regulations is not their (relatively trivial) increase in patient responsibility. Rather, it’s that it took 29 pages in the Federal Register to get it out!

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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