Making the Case for Medicaid

By the stroke of President Obama’s pen on August 2, America averted its first-ever default and a major economic crisis by raising the debt limit.  And even if the country in the words of the Obama administration lifted “a cloud of uncertainty hanging over the economy,” plenty of economic uncertainty continues today.  Congress and the administration still need to agree on $1.5 trillion more in budget savings by year’s end.  The prime targets:  Medicare and Medicaid.  The “supercommittee” of 12 members of Congress can’t ignore such a huge part of the budget and will have to deal with healthcare costs.  More details can be read here.

If we look into a crystal ball, it would be a safe bet to argue that Medicaid will likely get the brunt of those cuts.  While nearly every major industry or interest group has some form of representation to lobby federal and state representatives (including Medicare), select organizations that may include some of the most vulnerable citizens lack the financial and political clout to advocate for their interests, as is the case for Medicaid.  Nearly 60 million Americans depend on Medicaid as the insurer of last resort to pay their medical bills.  Some go as far as arguing that if Medicaid is significantly weakened, more people will die, more jobs will be lost, and healthcare costs will actually increase.

Whether you believe these arguments or not, it is clear that significant cuts are in the pipeline and more people are likely to lose their coverage.  According to a recent survey conducted by the National Governors Association, thirty-three states have proposed cutting Medicaid payments to providers in fiscal 2012.  This is at the same time that enrollment has grown by 8.1 percent in fiscal 2010 and is expected to grow by a total of 9 percent over the next two years.

Near and dear to my own heart, children are particularly hurt by this situation.  For instance, in Texas, lawmakers are currently debating a budget that would reduce Medicaid payments to children’s hospitals by as much as $275 million.  In Ohio, if a new state budget is approved, the state’s Medicaid spending would be slashed by $1.4 billion, with the brunt of it hitting pediatric hospitals who tend to take on the largest number of low-income patients.

Georgia is no exception to these challenges.  Georgia has the second highest rate of childhood obesity in the country (at nearly 40 percent) and the majority of its children (at 52 percent) depend on Medicaid to provide them medical care.  Yet, the the top Medicaid provider in Georgia, Children’s Healthcare that serves 8 out of 10 inpatient Medicaid cases in metro Atlanta, only pays 82 cents on the dollar for the costs incurred for Medicaid patients.  With further cuts proposed in our state legislature, access and quality of care will certainly be jeopardized for those who are least likely to afford it.

It should be stated that I am not arguing that what our state and federal governments spend on healthcare, including through Medicaid programs, should be exempt from scrutiny and possibly cost-cutting measures.  Rather the importance of programs like Medicaid should be more readily understood and taken into consideration by our representatives and general public as we try to get our financial house in order and improve our broken healthcare system.  If we are to blindly cut without understanding the full impact of such actions, however, we are all likely to see more serious consequences than the ones we are facing today.

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