How Obamacare Hurts the Most Vulnerable

Published September 14, 2012

One of the most tragic failings of ObamaCare is that it will make it harder for many of the most vulnerable citizens—patients with no option but Medicaid—to get care.

Medicaid is cumbersome, complex, and wasteful—already the worst health care program in the country. But rather than making changes to improve or modernize this program designed to finance care for the poor, the Obama administration is trying to convince states to add at least 16 million more people to Medicaid, including families making more than $30,000 a year.

That means the poorest and most vulnerable patients enrolled today will be competing with millions of new Medicaid patients for appointments to see a limited number of physicians. Those who have the greatest need and nowhere else to go are likely to have the hardest time getting care.

In its ruling in June, the Supreme Court made it optional for states to expand Medicaid to cover new enrollees. Even with generous federal funding, several states have said flatly they cannot afford the expansion, which would cost states at least $118 billion through 2023.

They are resisting not only because of budget concerns but also because this large Medicaid expansion could have catastrophic effects on those who provide society’s health care safety net.

Doctor Shortages Worsen Care

First, there simply aren’t enough doctors to handle this influx of new patients. Given Medicaid’s abysmally low payment rates, private doctors won’t be able to afford to take much more of the exploding caseload.

A recent article in Health Affairs found nearly one-third (31 percent) of physicians are not accepting any new Medicaid patients. Sandra Decker, an economist with the Centers for Disease Control and Prevention, used a survey of 4,326 office-based physicians from across the country to find that just under 70 percent said they were accepting new Medicaid patients. That number was significantly lower than those accepting privately insured subscribers (81 percent) or Medicare patients (83 percent).

The problem is particularly acute in states that have the lowest reimbursement rates for physicians.

Many states that plan to expand Medicaid under ObamaCare have low Medicaid reimbursement rates. In California, for example, up to 1.6 million residents are expected to gain coverage under the state’s Medicaid program, called Medi-Cal, but fewer than 60 percent of providers accept new patients in the program. That’s largely because California reimburses doctors 38 cents for every dollar private insurance pays. New York, which is anxious to further expand its Medicaid rolls, pays doctors only 29 cents on the dollar.

Where would these newly “insured” Medicaid patients go for care with fewer doctors willing to accept new patients? A Medicaid card clearly will not guarantee access to a physician.

Hospital Wait Times Will Increase

Longer waiting lines for emergency rooms are inevitable. Safety net hospitals that provide care to the poorest and most vulnerable in our society already are stretched to the limit financially. Adding millions more people to Medicaid will put crushing new demands on them. And at least 30 million people will remain uninsured after the law is fully in effect, according to the Congressional Budget Office.

To help pay for its expanded coverage, Obama’s law cuts existing payments to hospitals that provide care to a “disproportionate share” of uninsured patients. So there will be less money to compensate hospitals for patients who will still show up needing care.

Care Already Subpar

Studies consistently show Medicaid patients have the worst health outcomes of any group in the nation, worse than those with private insurance and, in some cases, those with no insurance.

A large study by the University of Virginia found that surgical patients on Medicaid are 13 percent more likely to die than those with no insurance at all and 97 percent more likely to die than those with private insurance.

The problem is particularly acute for Medicaid recipients who need to see specialists. One Florida doctor reported that, after a long battle with the state over payment for treating a patient with complex lung disease, he received a check from Medicaid for one penny.

Clearly, the huge expansion of Medicaid will make it even harder for the patients already on Medicaid to get the health care they need and will be little more than the paper promise it is today for those who receive a new Medicaid card.

Fool’s Gold

Despite these problems, many states are seriously considering expanding eligibility for Medicaid up to 138 percent of poverty (more than $32,000 for a family of four). They should be warned: there are no assurances Washington will be able to keep its promise to continue the original generous funding. Indeed, President Obama proposed reducing federal Medicaid spending during last year’s budget negotiations.

There is a better way: Allow people on Medicaid the option of private insurance so they can get coverage through private competing plans. Florida has a successful model underway. These plans could provide much better access to physicians, coordinate care for patients with multiple health problems, and allow patients to be seen in doctors’ offices rather than in expensive emergency rooms.

Patients would have the dignity of private coverage, and safety-net hospitals would be able to keep their doors open so they could continue their mission of caring for society’s poorest and neediest.