Friday, January 8, 2010

Health Reform and Medicaid" Conseqences for States and Doctors

When government implements national programs, it will have far teaching consequences for States, doctors, and hospitals.

Take Medicaid, provider pay, and patient access.

To pay for 31 million who would gain coverage through vast Medicaid expansion, states would bear much of the financial burden. IN Tennessee, this would amount to $735 million from 2014 to 2019, in a state whose budget deficit is now $1.5 billion. In California, the costs will be $3 billion annually in a state with a current $21 billion shortfall.

In addition, states would fact new regulatory burdens. They would have to health plans to see who meets federal standards, build websites to market and rate plans, and set up insurance exchanges. Consequently , a rebellion is brewing among State governments. Some are preparing to challenge the constitutionality of federal health reforms.

Senator Ben Nelson’s special deal to have the feds pay for Nebraska’s Medicaid program ad infinitum has created further anger and jealousy among other States. The big liberal and Democratic States – California, Massachusetts, and New York – who already have generous Medicaid benefits would be hit hardest, and even the big conservative states, like Texas, which as 25 percent uninsured, are waging a campaign against reform.

To cap it all, there’s a huge problem of who would take care of the estimated 15 million, including 7 million illegal immigrants, who would become new Medicaid customers. Less than 50 percent of doctors now accept new Medicaid patients.
For Democrats, the biggest political irony, is that they get what they wish for. Health reform may trigger a counter-revolution and a political revolt.

The rationale for pushing people into Medicaid is clear. In terms of costs, Medicaid is the cheapest and most efficient way to cover people of modest means. Mostly that’s because Medicaid pays doctors far lower reimbursement , in the order of 50 percent less, than private plans and even 20 percent less than Medicare and because States pick up some of the tab.

This rationale is unlikely to impress States and doctors and paradoxically, may result in less access to doctors and second class care for those who need it most.

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