The Great Society’s Big Medicaid Lie

Published August 5, 2011

When Medicaid was first created by President Lyndon B. Johnson, it was characterized as a safety net for the poorest of the poor. In the decades since, the program has expanded dramatically beyond that purpose. Today it claims to offer coverage for 68 million people—nearly one of every four Americans is enrolled in the program.

I use the word “claims” because people under Medicaid are overwhelmingly unable to access quality care, or often any care at all. This program intended to be a safety net has turned out to be a trap, condemning millions of Americans to a health care ghetto. A Medicaid card isn’t a key to needed care, but instead a mark of Cain.

Academic research and empirical evidence overwhelmingly show that poor outcomes, low reimbursement rates, and a runaway fiscal burden have turned the government’s promise to the poorest Americans into the Great Society’s biggest lie.

The Journal of the American Medical Association reported it’s actually easier to get a primary care appointment if you are uninsured than if you are on Medicaid. In Denver, Colorado, researchers found only 8 percent of Medicaid patients were able to get a primary care appointment, whereas 16 percent of the uninsured who promised to pay only $20 in cash at the time of the visit got appointments. To these doctors’ offices, one Andrew Jackson in the hand is worth more than chasing down Uncle Sam for a much greater promised reimbursement.

A study published in the New England Journal of Medicine in June found specialists in President Barack Obama’s home state of Illinois turned away 66 percent of children with Medicaid coverage, compared to only 11 percent of those covered by private insurance. The average waiting time for the children on Medicaid fortunate enough to get an appointment was 22 days longer than for other patients.

This lack of access to care naturally harms Medicaid clients’ health. Researchers at the University of Virginia found surgical patients on Medicaid are 13 percent more likely to die on the table than those without any insurance, and 93 percent more likely to die than those with private insurance—in part because Medicaid patients have to wait so long to receive needed care.

It’s easy to understand why. Imagine that someone comes to you and says, “I’m going to give you a client list. I’m going to pay you roughly a third of what you make from other clients. It’s going to take forever for me to pay you, and you’re going to have to fill out a mountain of forms. You’re going to have to conform to ridiculously convoluted regulations, and the clients are probably going to be the most difficult cases you’ll have to deal with in an average day. Would you like to participate?” Of course not!

This problem is widely acknowledged within the health care community. In a recent report on the access crisis, The New York Times quoted a medical director at a Chicago-area hospital who said, “It’s interesting to think you even need a study to prove that. It’s pretty much common knowledge.” But the politicians refuse to accept this truth.

The problems of Medicaid go well beyond unsustainable costs or waste, fraud, and abuse. They cut to the heart of its failure to keep its promise to the American people.

Yet much of the conversation today about Medicaid focuses on the dire cost problem while refusing to consider real cost-cutting reforms—an issue worsened by Obama’s decision to add millions more people to the system under his health care law, and his failure to address the strain created by so-called “dual eligibles” who lean on both Medicare and Medicaid at a cost of $300 billion per year. While Democrat Governors like Washington’s Chris Gregoire have quietly sought flexibility to prioritize the care of the poorest under Medicaid, and Virginia Senator Mark Warner has said “Medicaid is going to bankrupt all the states,” many of their colleagues are still doubling down on the government’s big Medicaid bluff.

Just a few weeks ago, 41 Senate Democrats wrote a letter to President Obama essentially taking virtually every real Medicaid reform off the table—an act of incredible political cowardice and profound delusion. Instead of moving to prioritize care for those who need it most, these politicians are insisting the public accept a broken promise. Unwilling to admit the disastrous failure of this pillar of the Great Society, these 41 people are blocking any attempts to end a titanic taxpayer-funded crisis and put Medicaid on a sustainable path.

Medicaid is a failed system that cannot possibly be sustained without massive reforms. As Ronald Reagan once said, “The Great Society is great only in power, in size, and in cost.”

Benjamin Domenech ([email protected]) is a research fellow at The Heartland Institute. He edits, a Web site highlighting innovative solutions to the Medicaid crisis.