As noted in my last essay, a major goal of the Patient Protection and Affordable Care Act (PPACA) is a dramatic reduction in the number of Americans without health insurance. The latest estimates I've seen indicate that the number of newly covered people will be 32 million (leaving another 15-20 million still uncovered), and about half of those (16 million) will be covered through expansion of Medicaid, the joint federal-state health insurance program for the poor.
This expansion of Medicaid to cover more Americans will happen chiefly through raising the income level of eligibility. In other words, one will not need to be quite as poor to qualify. This means that some of the working poor who currently earn too much to be eligible for Medicaid will qualify for this assistance.
This approach to covering more people raises many questions. Here are a few of them.
1. Where will the money come from? Most of it will be funded with federal tax dollars, but Medicaid is paid for jointly by the federal and state governments, and some state budgets will be under tremendous strain. Eligibility is currently variable from state to state. Poorer states (those with lower levels of per capita income) tend to have less money to spend on Medicaid, and so in those states you have to be poorer to qualify. Even though the federal government matches state expenditures more generously for these poorer states, you can't draw down federal matching dollars by spending money you don't have. (States, unlike the federal government, typically must balance their budgets.) Under PPACA, a bigger-than-usual share of the money for expansion will come from federal tax dollars, but the poorer states will still struggle.
How might the states struggling to fund their side of the Medicaid program deal with the challenge? Yes, you guessed it: by lowering payments to providers (especially hospitals and doctors). And that brings us to the next question.
2. Is Medicaid "real insurance?" The short answer is no. When you have health insurance procured through the private, commercial insurance market, what your insurance pays to providers is determined by a complex set of factors in that market. One of these factors is negotiation between insurers and providers. Another is competition among insurers. Every insurer wants as much business as possible, and they make their products attractive by doing their best to achieve a balance between cost (to employers and employees) and choice. So the buyers want a plan that will provide excellent coverage, with reasonable out-of-pocket expenditures for patients and wide choice of participating doctors and hospitals. At the same time, they want affordable premium costs. On the provider side, hospitals and doctors want fair payment for the services they render. They expect that if, through negotiation, they agree to accept somewhat lower payments, the insurer will make it more attractive for patients to choose these "participating providers," thus assuring them a greater volume of business.
When the "insurance" is Medicaid, all of these market factors disappear. Patients have no choices, unless they are offered Medicaid managed care, which introduces a few choices that for most patients are confusing and not terribly attractive. And providers are told what they will be paid for taking care of Medicaid patients. The rates are low (or very low) and non-negotiable. Some providers (notably hospitals) don't have a choice about whether to accept Medicaid patients, although if patients have Medicaid managed care, a patient who goes to the "wrong" hospital emergency department may have to be transferred to another hospital if inpatient care is needed. As for doctors, the choice is typically quite simple: accept Medicaid patients or not. More and more of them choose not.
So for many patients, Medicaid is not "real insurance," simply because in some markets it is really difficult to find a doctor who is accepting Medicaid patients. And that brings us to the third question.
3. Will these newly covered patients be able to find a primary care doctor? Again, the short answer is no. Remember, the number of newly insured patients is expected to be some 32 million. Half of those will have Medicaid. The current shortage of primary care doctors is estimated to be 40,000. Most uninsured patients don't have a primary care doctor. Most of those newly insured under PPACA will try to find one. The first challenge, in a health care system with a serious shortage of primary care doctors, will be finding one who is taking new patients. Now imagine that you are among the half of the newly insured patients with Medicaid. What do you think your chances will be of finding a primary care doctor who will be just as accepting of new Medicaid patients as new patients with "real insurance?"
4. What is the plan for providing primary care for all of these newly insured folks? There is no plan. At least there is no plan that appears likely to remedy the shortage of primary care doctors in the foreseeable future.
5. Where will these patients go? Remember, these are folks who currently have no insurance. Many of them are afraid of huge medical bills they cannot pay, and so they do not seek medical care when they think they probably should, hoping things will somehow get better on their own. When that doesn't happen, they wind up in the emergency department, much worse off than if they had sought care earlier, and have to be hospitalized. Under PPACA, they will have coverage, eliminating their fear of bills they can't pay. But without access to primary care, they will go to the only place they know that will always take care of them, 24/7/365. The upside: they will be less likely to wait until they are critically ill. The downside for those of us in the emergency care system: our capacity is limited, too, and we will be overwhelmed.
Elected officials and policymakers, are you listening? I think we know that answer.
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