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Medicaid should serve the truly needy, not able-bodied, childless adults

Medicaid should serve the truly needy, not able-bodied, childless adults

Idaho Freedom Foundation staff
October 24, 2018
Idaho Freedom Foundation staff
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October 24, 2018

Dr. John Livingston | Medical Policy Adviser

The federal government established Medicaid in 1965 to deliver medical services to impoverished, vulnerable Americans. These people, those living at the margins who, because of chronic disease processes, cannot work or afford medical care, should always be our top priority.

On Nov. 6, Idahoans will see Proposition 2 on their election ballots. Proposition 2 is an expansion of the state’s Medicaid program, as allowed by Obamacare. Proposition 2 as written does nothing to secure the futures of the very people Medicaid was originally designed to help.  In fact, it puts these patients’ futures in jeopardy should the federal payments for services change.

Another variable not contemplated by the Affordable Care Act, or those who support Medicaid expansion, is the impact that 270 Medical Care Organizations (MCOs), which cover patients with a capitated formula, have had on the spreads between premiums paid and payouts to providers and carriers between 2013 and 2016 in these government-sponsored programsthey have doubled.

A May Government Accountability Office study and a Michigan Medicaid study reported on in the Wall Street Journal several weeks ago describes a process called “up coding.” Future capitated payments are determined by payments made to carriers and future capitated rates determined by those payments. Thus, there are therefore incentives throughout the system that encourage billing for and receiving payments at higher rates. The Michigan study cited in the WSJ article says, in 13 of 16 states reviewed there was no accounting mechanism in place to account for “up coding.’ In fact, in 2016 the DHHS issued a directive requiring insurance carriers to payout 85 percent of collected premiums. This has further incentivized MCOs and carriers to continue “up coding.”

So remember that patients who are receiving Medicaid receive a 73 percent to 27 percent federal-state match. If Prop. 2 passes, the new expansion patients will soon be under a 90 percent-10 percent federal-state match. It will be advantageous for those new young and healthy patients to be taken care of rather than the original group of patients. Who is profligate in this transaction? Certainly not the original patients that Medicaid was designed to help. Certainly not the 80 percent of Idahoans who either through their employer or who insure themselves have seen their premiums double over the past eight years.  A family of four making $55,000 annually, who pay a $15,000 premium and a $7,500 capped co-pay can hardly afford to pay more taxes should the Federal Medical Assistance Percentages (FMAP) formula change in the future.

The current Medicaid expansion ballot initiative does nothing to help the people on the margins that Medicaid was originally supposed to help. In fact, Prop. 2 places their futures in jeopardy.

The current Medicaid ballot initiative is a subsidy paid to corporations, which have billions of dollars of revenues and reserves, that are currently gaming the system. And let me be clear about this: We are blessed to have an incredible medical community of doctors, nurses, and technicians. This is not their fault and in fact, most of them have little knowledge of the behind the scenes business transactions incentivized by government programs that are the primary cause of increasing medical costs.

Idahoans have always enjoyed the responsibility of taking care of their own families, their neighbors, their friends. They have never looked to the government to discharge their obligations in this regard nor do they look to the government to be the conduit for charity. They would rather fulfill their own obligations. That is the Idaho way.

Cost before coverage.

Coverage is not access.

Access is not quality.

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