Thursday, March 10, 2011

Why Medicaid Is NOT “Real Insurance”

Wanted to pass along this great op-ed by Dr. Scott Gottlieb in this morning’s Wall Street Journal on the massive Medicaid expansion in the health care law.  Dr. Gottlieb, a former official within the Food and Drug Administration and the Centers for Medicare and Medicaid Services, goes through several recent clinical studies concluding that patients with Medicaid suffer far worse clinical outcomes than patients with private insurance – even after controlling for socioeconomic factors that can influence health outcomes.  These kinds of poor patient outcomes and access difficulties explain why beneficiaries themselves don’t consider a Medicaid card actual health insurance coverage: “When we had real insurance, we could call and come in [to the doctor] at the drop of a hat.”

Remember, the health law expands Medicaid to at least 20 million new individuals – and Medicare actuary Rick Foster recently testified that “an additional 5 million or more” could be added to the Medicaid rolls on top of this 20 million number, depending upon how CMS interprets the law.  And as noted in the article, the law also adds to state budget difficulties; the joint Finance/Energy and Commerce report released last week found that the law will add at least $118 billion to state Medicaid costs, at a time when states are suffering from severe fiscal difficulties.

The answer to this problem, as Dr. Gottlieb concludes in his op-ed, is more flexibility for states to operate their Medicaid programs as they see fit, and tailor their benefits provided to distinct populations.  Governors have made multiple requests  for such flexibility – and on February 3 Secretary Sebelius wrote to them saying she was “continu[ing] to review what authority, if any, I have to waive the maintenance of effort” requirements under the health care law.  However, nearly five weeks later, the Secretary has yet to respond substantively to this issue, notwithstanding the serious budget crises affecting many states.