Exploring Human Potential

“Medicaid-for-all” vs. “Medicare-for-all”.

Posted on | August 16, 2016 | No Comments

Screen Shot 2016-08-16 at 8.57.40 AMFamilies USA/Medicaid Expansion

Mike Magee

The verdict is pretty much in – increasing health coverage through whatever means possible, improves health outcomes.

This is especially true for the large numbers of formerly uninsured who are now covered through Medicaid expansion plans offered through the Affordable Care Act. Healthy citizens are not only less sick (which means less expensive), but also more employable and productive. All the more confusing that 19 states continue to defy logic by refusing to sign up for ACA sponsored plans in their states. A careful look at the numbers may help explain why.

Here are a few facts:

1. Each state dollar invested in Medicaid expansion draws $7 – $8 dollars in federal support.

2. Decreases in uncompensated care could save non-participating states around $22 billion and the federal government around $40 billion.

3. In all states that have used the ACA Medicaid offering, savings have exceeded costs.

4. 19 states have refused to expand Medicaid to adults with incomes at or below 138% of the federal poverty level. Were they all to participate, an additional 5 million currently uninsured would be covered.

Resistance to expansion of ACA Medicaid has been led primarily by Republican governors and Republican legislative bodies in 19 states. They fear being left with a big bill, even though the federal government covers 90% of the costs in perpetuity. They also worry that this is simply a strategy to convert the health care system from private to public, and from state to nationally controlled, much as they view the Medicare-for-all plans that have been floated during this political season.

Less often reported is physician resistance to seeing Medicaid patients. This has had less to do with politics, and more about financial self interest. Historically, Medicaid has been a remarkably poor payor in many states, with the occasional exception of obstetrical care. Rates today continue to be set by individual states. So even though you provide coverage, poor reimbursement may limit physician participation and therefore limit economically disadvantaged patients’ access to care.

What many physicians, especially specialists, have failed to realize is that Medicaid now comes very close to Medicare reimbursement levels in most states. In fact, in 33 states, Medicaid reimbursement is between 70% and 100+% of Medicare payment levels. That’s according to Kaiser’s “Medicaid-to-Medicare fee index measure”. Here are the top five best and worse states: 

Best:  North Dakota  141%, Alaska  129%, Montana  104%, Delaware  98%, Wyoming  96% (Wyoming is the only ACA non-participating state)

Worst: Rhode Island  38%, New Jersey  45%, California  52%, Michigan  54%, Florida  56%. (Florida is the only ACA non-participating state.)

But  comparing “Medicare-for-all” to  “Medicaid-for-all” is like comparing apples and oranges. Medicare is fundamentally a national fee schedule with local adjustments for cost-of-living etc. Medicare is accepted by most clinicians and functions with patient protections codified and enforced by a federal agency. It is true national health insurance, albeit administered in some cases though private insurers. Medicaid, in contrast, varies from state to state in its coverage schedule and payments, which are frequently adjusted to reflect individual state financial pressures and priorities, as interpreted by state political bodies.

The expansion of coverage for the poor in America through the ACA Medicaid offering has been a success in identifying the most vulnerable, bringing them out of the shadows, and enlisting them in programs of varying value. This is no doubt progress. But in health delivery, high degrees of variability in coverage schedules, or payment schedules, or consumer protections, is never good.

At the end of the day, as soon as is feasibly possible, we need to build upon Medicare’s national model. After all, if our national taxes are on the hook for 90% of the cost of Medicaid expansion anyway, why should we continue to carry the cost, in financial and human terms, of high state by state variability in performance?


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