Medicaid Mess-up

Last week, government officials discovered that up to 3 million middle-class Americans — with annual incomes as high as $64,000 — could qualify for Medicaid, the government health insurance program for the poor, thanks to Obamacare.

Medicare’s chief actuary, Richard Foster, summed the situation up nicely: “[T]hat just doesn’t make sense.”

An understatement if there ever was one. And it’s only the latest example of Obamacare’s irresponsible approach to Medicaid, which not only fails to provide its beneficiaries with adequate care but is threatening to bankrupt state governments.

The 3 million folks “lucky” enough to take advantage of Medicaid in 2014 are early retirees between the ages of 62 and 65. They can claim Social Security benefits but not Medicare. For some reason, Obamacare does not count their Social Security checks as income when determining whether they’re eligible for Medicaid.

Obamacare already is expected to add as many as 24 million Americans to Medicaid by 2019. Almost 1 in 4 Americans will soon receive publicly funded coverage through the safety net program. And that doesn’t include these 3 million early retirees.

Even before Obamacare became the law of the land, some 14 million Americans were eligible for Medicaid or the State Children’s Health Insurance Program — another safety net program specifically for poor children — but hadn’t signed up.

Their lack of interest in the program makes sense. After all, Medicaid provides substandard care.

More than a quarter of health care providers won’t see Medicaid patients because the program reimburses them for just 72 percent of what Medicare pays and 80 percent of what private insurance pays. So some doctors and hospitals can actually lose money on every patient they see.

When a Medicaid beneficiary actually succeeds in getting an appointment, he’ll probably receive inadequate care. A 2007 study by a Harvard researcher published in the Journal of the American Medical Association found that Medicaid patients received lower-quality care than patients covered by commercial HMOs in all categories but one.

Even more shockingly, Medicaid surgical patients are 97 percent more likely to die than those covered by private insurance, according to a recent University of Virginia study.

Perhaps Medicaid should come with a warning from the surgeon general.

The program’s shoddy care certainly doesn’t come cheap. In 2009, total spending on Medicaid — by both the feds and the states — came to $373.9 billion.

The 3 million early retirees may explode the program’s finances. Over 10 years, these 3 million folks could tack on $450 billion to Medicaid’s bill.

States can ill afford the tab. Medicaid spending is up 192 percent over the past two decades and now accounts for about a fifth of state budgets.

Forty-six states experienced a budget gap in the current fiscal year. The combined shortfall is expected to be up to $260 billion for 2011 and 2012.

It’s therefore no surprise that a record 20 states implemented benefit restrictions in 2010 to control their Medicaid costs. Thirty-nine states cut or froze already low provider rates last year.

And yet Obamacare expects them to add tens of millions of new folks to the Medicaid rolls.

Rather than shoring up the program’s finances and ensuring that it services the truly disadvantaged, Obamacare is dumping yet more taxpayer money into the Medicaid hole to extend coverage to middle-class folks who don’t need it.

Unfortunately, “Medicaid for the middle class” is just one of Obamacare’s litany of cost-inflating “fixes” for our health care system. It should be among the first Congress junks.

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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