The Medicaid Crisis- is program on unsustainable path? « Health Insurance Advisory

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new healthcare reform lawThe new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), represents comprehensive healthcare reform legislation signed into law on March 23, 2010. It contains numerous provisions designed to protect consumers and promote low cost medical insurance, including many new taxes to pay for the cost.

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The Medicaid Crisis- is program on unsustainable path?

Author: Administrator | Jun 13 2011 | Medicaid & Medicare - New Healthcare Law

Successful healthcare reform requires bold changes. Nowhere is this more true than with Medicaid, the federal-state partnership to provide healthcare services to the poor and disabled. The Heritage Foundation provides some insight.

Senators Tom Coburn, M.D. (R–OK), Richard Burr (R–NC), and Saxby Chambliss (R–GA) introduced legislation to give states flexibility to fix Medicaid.

Medicaid is on an unsustainable path and promises to consume a growing portion of state budgets and increase deficit spending. In response, state legislators have begun to aggressively seek ways to reduce the medical insurance program’s cost while also improving it. But due to federal mandates and bureaucratic barriers to change, this is easier said than done. Both the stimulus and the new healthcare law enacted maintenance-of-effort (MOE) requirements that restrict states from altering Medicaid eligibility. Moreover, states must apply for waivers from the Department of Health and Human Services (HHS) to make significant changes to the programs—a lengthy and often unsuccessful endeavor.

States are thus left with few tools to reduce spending.  They can: 1) reduce healthcare provider reimbursements, 2) reduce benefits covered under the program, or 3) raise taxes. Medicaid payment rates for physicians are already about 58 percent of private medical insurance rates, severely reducing access to primary care Physicians and specialists. The result is a low-quality program where beneficiaries are even more dependent on emergency room care than the uninsured. In sum, Medicaid has become an expensive and poorly performing program, yet states have their hands tied and cannot address the causes.

The Coburn–Burr–Chambliss proposal would give states a capped allotment to provide coverage for specific members of the Medicaid population, including:

  • pregnant women
  • low-income children
  • low-income families
  • long-term care services received by low-income elderly and disabled persons

Funding would be based on the number of residents living in poverty and would grow with increases in costs and population. This system would be more equitable than the existing one and would remove incentives for states to grow their programs to unaffordable levels simply to obtain more federal funding. No changes would be made to funding for acute care to low-income elderly and disabled Americans.

To learn more about the new healthcare law and government medical insurance programs in a particular state, visit today.

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