Medicaid Meltdown

From Investors Business Daily:

Posted 12/14/2005
Entitlement: The Medicaid program threatens to bankrupt the states, and governors have joined with the Bush administration to seek savings. But senators of both parties who refuse to face reality stand in the way.

Medicaid spending has grown by an annual average of 9.5% the last four years, with the federal share reaching nearly $185 billion.

It's also become the biggest item in state budgets. "Medicaid at 53 million Americans is going to bankrupt all of the states," National Governors Association Chairman Mark Warner, D-Va., has warned. "We are on the road to a meltdown."

Fraud and waste in the system are rampant. This year it was even discovered that registered sex offenders were getting Medicaid-funded Viagra prescriptions.

Governors have called for modest savings, such as increasing some Medicaid co-payments to $5 from the current $3 and charging modest premiums and imposing deductibles on families above the poverty line. The House of Representatives approved a bill containing these reforms, with support from the White House.

But there are cries that poor people won't go to the doctor if they have to hand over even the most modest of co-payments. Senators actually fear they'll be branded as heartless for asking for five bucks for a government-financed doctor's visit.

Senate Finance Committee Chairman Charles Grassley, R-Iowa, even presided over a Senate-passed expansion of Medicaid to extend coverage to middle-income families with disabled children who can afford to purchase private insurance.

And joining with Democrats, moderate Republican Sen. Gordon Smith of Oregon refuses to cut costs. Instead, he wants the establishment of a bipartisan panel to study Medicaid.

For the states, however, there's nothing to study, and they've already begun to act unilaterally. Thirty-four have reduced benefits in the last several years. Tennessee has already excluded more than 200,000 people from the Medicaid rolls, and Missouri is dropping 100,000.

The much-touted Congressional Budget Office analysis that "about 17 million people — 27% of Medicaid enrollees — would ultimately be affected by the cost-sharing provisions of the (current House of Representatives) bill" is proving to be a moot point. Millions are going to be affected eventually anyway.

The only question is whether the states will make the cuts in the panicky context of their inevitable budget crises or Congress will step up now and cut costs in a more rational fashion.

Real reform of health care for the poor would include helping those at low incomes purchase private insurance — which is far more efficient and cost-effective than Medicaid. Hundreds of millions of dollars could also be saved by placing Medicaid recipients in managed private health care plans, as Texas has done.

Meantime, it shouldn't be too much to ask that those whose health care is being paid for by their fellow citizens practice a little personal responsibility by shouldering a few dollars of the cost every time they receive services or medicine.