Ten years ago, we were told “you can keep your doctor you can keep your plan” and Medicaid expansion will improve “access—quality-and cost” for everyone including those businesses that insure their employees and those individuals and families who insure themselves. Just ask patients in the Treasure Valley about how hard it is to keep your own doctor with insurance networks changing yearly. I am interested to see how the Saltzer Medical Group will resolve this issue with its’ new owner and if patients—providers—and insurance plans will all stay together.
The connection between Medicaid Expansion and private commercial insurance was a concern of many who warned of the increased costs that were inherent in a flawed system of The Affordable Care Act. Reconciling the costs to providers and the prices charged by providers who themselves are subsidized by government to the tune of over 50% is best done in THE MARKETPLACE. The subsidy itself skews the economic signaling that creates efficiencies. And let us never forget the economic argument that those who were against Medicaid Expansion 10 years ago made. With the consolidation of health care providers into a decreasing number of “systems” and with increased demand for services, prices charged to patients would insure an overall increase in the cost of health care to society. Decreased supply and increased demand raises the equilibrium price point. Not to mention decreased access and quality.
Hayden Dublois and Michael Greibrok summarized their research at Florida think tank FSG. in the March 8th Wall Street Journal. They reviewed Federal filings of over 4000 hospitals across the country. They compared the financial positions of hospitals in States that did not expand Medicaid to the hospitals in States that did—the most recent expansion State is North Carolina. As perfectly predicted 10 years ago a form of “price shifting” takes place in states that have accepted billions of Federal dollars to subsidize sub-par insurance plans. In states that expanded Medicaid hospital revenue shortfalls increased by 115%. In states that did not expand Medicaid shortfalls increased by 6%.
The design flaw in Medicaid Expansion—was it purposeful (?) was that Medicaid only pays 78 percent to providers compared to Medicare which pays about 80% of what commercial insurance plans can negotiate with providers. All things being equal Medicaid reimbursement rates are 64% of what commercial insurance pays.
Hospitals and health care systems are in a “pickle”. They can ask state governments for more taxpayer money to further subsidize the cost of services, or they can increase what they charge those who use commercial insurance—businesses, individuals, and families. They call such a switch “cost shifting”, but it is really price shifting. Either way the person picking up the tab is the taxpayer—citizen—patient—constituent, with an increased tax or an increased insurance premium. Next time your health insurance premium goes up call your legislator. Then ask them why he/she continues to accept campaign contributions from the IMA/IHA and large hospital systems. Their health insurance premiums are paid for by the State of Idaho so individually they really don’t feel the pain that those paying their own way do. Come to think of it, taxpayers pick up that tab also.
The soaring costs persist because with almost 100million people on Medicaid ,and the number growing—how many illegal immigrants are now being covered(?), the number of people on commercial insurance is decreasing. Their premiums go up, and the ability of the providers to price shift goes down. The need for further subsidies goes up. An increasing burden on a smaller number of people is a death spiral.
Medicaid was designed for people living on the margins who through no fault of their own cannot pay for their medical care. It was not designed for taking care of able-bodied adults who do not have chronic medical conditions.
The article points out the ultimate truth about the Politics of Medicaid:
“The facts haven’t stopped Obama Care’s advocates from demanding that the 10 holdout states embrace this foolishness. The way they tell it, these states are heartless, leaving needy people out in the cold. Yet Medicaid expansion hurts the needy, since it forces some of the most vulnerable patients to compete with able-bodied adults for the same care, making wait times and health outcomes worse.”
