Slaying the Medicaid Monster

Legislators have created a Medicaid monster, which eats up 22% or more of their state budgets.  Now they want to slay it. 

However, they’re not seeing the real monster clearly.  Cutting the legs out from under Medicaid recipients isn’t the same as cutting the monster down to size.

A Florida bill illustrates how states are attacking the wrong things. 

Under a Florida Medicaid reform proposal, Medicaid patients would be charged $100 for non-emergency visits to a hospital emergency room.  The purpose is to save money by discouraging unreasonable use of emergency rooms. 

Nearly half of all visits to emergency rooms are for non-emergency reasons.  This is true of Medicaid patients, insured patients, and uninsured patients.  The main reason the percentage is so high isn’t that people choose to go to the emergency room for minor complaints.  Laypeople aren’t qualified to diagnose their own emergencies.  Health professionals tell them to use emergency room because it’s better to be safe than sorry.

Here are three true-life examples that illustrate the point.

• A 56 year old man complains of chest discomfort and shortness of breath, and the paramedics who respond advise him to go to the hospital immediately.  Even though clinicians describe his symptoms as those of a classic heart attack, the tests are negative. It is a false alarm. 
•  A 35 year old woman walks into the emergency room complaining of an upset stomach.  She is examined and advised to take an antacid.  She reports feeling better and is discharged. Several days later she is admitted to the hospital in severe pain, and is diagnosed with an ovarian cyst. 
• Three times in two weeks, a young man enters the emergency room complaining of leg pain.  Clinicians suspect that he may be shopping for pain pills.  They find nothing wrong with his leg, and discharge him.  A few days later, the patient is in the hospital after attempting suicide.  His complaint was about his leg, but his problem was his mental illness.

Who is to say which of these patients shouldn’t have gone to the emergency room?    

When people need health care someone has to pay for it.  For too long, states have taken the position that this should be someone else.  Letting people at the poverty level shoulder more of the burden through $100 charges is just the latest strategy. 

This is because imposing a $100 charge on patients will cause care to be deferred, delayed, or denied.  People will try to wait out their emergencies.    

This won’t matter to the 56 year old who didn’t have a heart attack.  He’ll be fine the next day.  The woman with the ovarian cyst and the suicidal man won’t be so lucky.

Medicaid isn’t a monster.  It’s a lifeline for people who need health care. 

It is also a lifeline to the states.  It may absorb 22% of their budgets, but it also supplies 15% or more of their total projected state revenues.  The federal government reimbursed states for an average of 57% of their costs through 2009, 66% in 2010, and will pay 90-100% of the cost of program expansions under health reform. 

This payment results in four times the amount of revenue states receive from corporate taxes, and almost as much as they raise from all state income taxes combined. 

Like the governor of Texas, some Florida legislators are threatening to drop out of the Medicaid program unless the federal government agrees to let them cut Medicaid benefits to the elderly, children, and lower middle class families.  The Governor of Texas dropped this idea when his commissioner reported how much harm this would do to the state. 

The way for states to control Medicaid costs isn’t to make it harder for people to receive Medicaid benefits.  States need to fix the mistakes they have made over the years that have led to higher costs, not compound them. 

First, they reduced Medicaid reimbursement to physicians and other providers to such a low level that most dropped out of the program.  In many areas, the only Medicaid providers left are the hospitals, so that’s where Medicaid recipients go for care.  To its credit, Florida is following the federal government’s lead and considering higher reimbursement rates for some providers.   

Second, they limited community care, home care, and non-health care options to people on the program, and refused Medicaid to people with mental illness, pushing them into higher-cost treatments.

Third, they forced recipients into managed care programs that did a better job of denying care than coordinating it, making the population sicker.

Fourth, they put healthier, working people with incomes slightly above the poverty level onto county and local programs that receive no federal reimbursement.

Despite the harm they’ve done, some of these mistakes are still on lists of state-proposed “reforms.”   

That’s the real Medicaid monster.