December 7, 2013 | 9:15pm NY Post
The good
news, if you want to call it that, is that roughly 1.6 million Americans have
enrolled in ObamaCare so far.
The
not-so-good news is that 1.46 million of them actually signed up for Medicaid.
If that trend continues, it could bankrupt both federal and state governments.
Medicaid
is already America’s third-largest government program, trailing only Social
Security and Medicare, as a proportion of the federal budget. Almost 8 cents
out of every dollar that the federal government spends goes to Medicaid. That’s
more than $265 billion per year.
Indeed,
already Social Security, Medicare and Medicaid account for 48% of federal
spending. Within the next few years, those three programs will eat up more than
half of federal expenditures.
And it’s
going to get worse. Congress has shown no ability to reform Social Security or
Medicare. With ObamaCare adding to Medicare spending, we are picking up speed
on the road to insolvency.
The
Congressional Budget Office projects that, in part because of ObamaCare,
Medicaid spending will more than double over the next 10 years, topping $554
billion by 2023.
And that
is just federal spending.
State
governments pay another $160 billion for Medicaid today. For most states,
Medicaid is the single-largest cost of government, crowding out education,
transportation and everything else.
New York
spent more than $15 billion on Medicaid last year, roughly 30% of all state
expenditures. The Kaiser Foundation projects that over the next 10 years, New
York taxpayers will shell out some $433 billion for the program.
But none
of these projections foresaw that so many of ObamaCare’s enrollees would be
Medicaid eligible.
To be
sure, the health-care law’s designers saw the expansion of Medicaid as an
important feature of their plan to expand coverage for the uninsured. Still,
they expected most of those enrolling in ObamaCare to qualify for private
(albeit subsidized) insurance.
It’s
beginning to look like that was just another miscalculation, one that could
have very serious consequences for the program’s costs.
Moreover,
any projection of Medicaid’s future cost to New York taxpayers assumes that the
federal government keeps its promise to pay 100% of the cost for Medicaid’s
expansion over the next three years and 90% thereafter. But given the growing
burden that Medicare will put on a federal budget already facing high debt
levels, how likely is it that changes in the federal share of Medicaid will
stay off the table?
In fact,
as part if last December’s fiscal-cliff negotiations, the Obama administration
briefly considered changing to a “blended” reimbursement rate, somewhere
between the current and promised rates. The administration quickly backed away
from the offer, but it’s likely to come back in the future. If it does, it
would cost New York tens of millions of dollars.
Every bit
as bad as the cost is the fact that for all this money, recipients are going to
get pretty lousy health care.
Of course,
one might say that even bad health care is better than no health care. But,
unfortunately, for Medicaid, that’s not true.
The Oregon
Health Insurance Exchange study, the first randomized controlled study of Medicaid
outcomes, recently concluded that, while Medicaid increased medical spending
increased from $3,300 to $4,400 per person, “Medicaid coverage generated no
significant improvements in measured physical-health outcomes.”
Other
studies show that, in some cases, Medicaid patients actually wait longer and
receive worse care than the uninsured.
While
Medicaid costs taxpayers a lot of money, it pays doctors very little. On
average, Medicaid only reimburses doctors 72 cents out of each dollar of costs.
ObamaCare does attempt to address this by temporarily increasing Medicaid
reimbursements for primary-care doctors, but that increase expires at the end
of next year.
Because of
the low reimbursement, and the red tape that accompanies any government
program, many doctors limit the number of Medicaid patients they serve, or even
refuse to take Medicaid patients at all. An analysis published in Health
Affairs found that only 69% of physicians accept Medicaid patients. A study
published in the New England Journal of Medicine found that individuals posing
as mothers of children with serious medical conditions were denied an
appointment 66% of the time if they said that their child was on Medicaid (or
the related CHIP), compared with 11% for private insurance — a ratio of 6 to 1.
Even when
doctors do still treat Medicaid patients, they often have a harder time getting
appointments and face longer wait times. One study found that among clinics
that accepted both privately insured children and those enrolled in Medicaid,
the average wait time for an appointment was 42 days for Medicaid compared to
just 20 days for the privately insured. One study found that among clinics that
accepted both privately insured children and those enrolled in Medicaid, the
average wait time for an appointment was 42 days for Medicaid compared to just
20 days for the privately insured.
That’s one
reason why so many Medicaid patients show up at the emergency room for
treatment. They can’t find a doctor to treat them otherwise.
This not
only increases the strain on already overburdened emergency room doctors, but
increases the wait for those who arrive with real emergencies.
As bad as
this is now, ObamaCare will make it worse by increasing the number of people on
Medicaid without doing anything to increase the number of doctors treating
them.
We don’t
know yet whether the rush to Medicaid will continue. It may be that the
troubles with the ObamaCare website might have skewed the early signups. But if
ObamaCare really does lead to a massive expansion of this costly and
inefficient program, that’s bad news for taxpayers, providers and patients.
Michael D. Tanner is a senior fellow at the Cato Institute.
