Health Care Reform – Medicaid Program Review

January 16, 2010

By Padmini Arhant

The issues that deserve consideration from the individual state standpoint:

Reallocating the Senate offer to Nebraska nationally is a fair approach.

Increasing federal aid in the Medicaid expansion program for 50 states is necessary to deal with the vast uninsured population across the nation.

Since the President and the democratic lawmakers have appropriately incorporated the requirement, it’s constructive to ensure the coverage entirely to avoid rifts between the states.

With regard to the creation of new insurance exchanges under federally regulated marketplaces for consumer choice, it’s important to extend or re-enact the anti-trust laws in addition to the establishment of caps to curb the rising costs especially in the absence of government run insurance program.

The demand and supply determined free market is never inhibited to exercise the freedom to hike the price leading to the status quo.

There is a higher probability in the future, with the demand introduced mandatorily via 30 million and more insured through the proposed legislation. Therefore, it’s vital to close the loopholes presumed to cause the cost factor to rise exponentially.

Upon evaluating California and other states’ grievances in the national health care reform, the following options are viable to resolve the contentious details in the Medicaid program.

In this respect, the State of California is an ideal example with New York State sharing the scenario in terms of the benefits and drawbacks from the current national health care bill.

California is believed to be splitting the costs on Medi-Cal – the state version of Medicaid, the health insurance program for the poor and disabled – in equal ratio with the federal government.

Raising the income threshold under the Medicaid program is a sensitive enactment that would enable the uninsured in millions to qualify for the Federal aid, a crucial component in the legislation.

At the same time, it also enhances the revenue prospects for the insurance industry represented by the health care reform opponents, thereby allowing the free market to thrive and yet vilified by the Republican Senate minority remaining steadfast against the legislation regardless, signifying partisan politics.

The republican stance in any legislation thus far, is clearly anti-populace prioritizing self-interest backed by the special interests over national progress. Similarly, the connotation is extended to the moderates and the conservatives on the democratic side weaving lanes for political security.

Given the eternal gridlock hampering progress more prevalent in the Senate than the House, the adjustment would inevitably yield the desirable result, i.e. coverage for the uninsured provided the market maintains the affordability.

Health Care bill has the federal government absorbing 80 percent of the costs of newly eligible enrollees with the entire costs being paid for the first three years upon the legislation becoming effective in 2013 or 2014.

Although, it’s a positive step in dealing with the burgeoning health care crisis, there are anomalies that could be easily addressed to satisfy the different states’ economic conditions.

For instance, in the 80 percent federal subsidy applied only to newly eligible enrollees, California is confronted with a huge number of people who are qualified for Medi-Cal, but they appear to have not enrolled.

The legitimate concern is the cost burden shifting to the state on equal basis when the compulsory health insurance purchase becomes the law.

Further, the news report titled Health Care – Painful costs of reform for state,

Medi-Cal’s broad mandate would mean greater burden under national overhaul

By Mike Zapler, San Jose Mercury News, January 16, 2010

“The legislation would offer more federal relief to states that now offer Medicaid to only the neediest people, such as Texas and Alabama, than to states that have expanded the program over the years to cover more people, such as California and New York.

California, for example, already will cover a family of four earning up to $23,373, while Texas covers a family of four earning up to only $5,733.

Put a different way, federal largesse would be concentrated on those who don’t qualify for Medicaid currently but would under the new national rules – and California has a lot fewer of them than many other states.

“It is beyond unfair,” Kim Belshé, the governor’s secretary of health and human services, said in an interview. “California is being penalized,” she added, “for having done the right things when times were good.”

Federal regulations make it all but impossible for California to scale back Medi-Cal to cover fewer people, so the state is essentially stuck with generous rules adopted during the flush economic times for it can no longer afford, Belshé, said.

John Holahan, a health care expert at the Washington D.C. based Urban Institute, agreed that it’s “inherently unfair” for the federal government to pay different shares of each state’s health care expansion costs and said it’s bound to create a bureaucratic maze.

“For every new enrollee in each state, they’re going to have to check:

Did they qualify under the old rules or the new rules?” Holahan said.”


Analysis with Solutions: By Padmini Arhant

Even though, the single payer or the public option at the bare minimum would have eliminated these problems, the bill should have provisions allowing the States to adopt the universal plan by preference through state legislature or on a ballot measure.

Nevertheless, in the immediate health care proposal, the practical method is to standardize the eligibility criteria to minimize the cost bearing responsibility at the State level.

Rather than conducting an audit on the qualifying enrollees based on old and new rules that would only escalate the administrative costs, it’s simpler to accept all new enrollees nationwide on federal aid.

Under the existing rule and the pending health care legislation, the state – federal match on health care program is apparently based on the states’ per capita income instead of the poverty rate formula.

Realistically, the poverty rate is an accurate indicator of the uninsured in each state. That being the case, choosing the latter would mitigate the on-going health care costs in the emergency rooms at the County hospitals paid for by the taxpayers.

California’s reimbursement rates to doctors on Medi-Cal program is reportedly the lowest in the country. Accordingly, the Medi-Cal patients are declined by a majority of doctors supposedly struggling to cover the treatment costs.

Moreover, the House version of reform expected to boost Medicaid payments for primary care, whereas, the Senate bill, not surprisingly would not. Again, per the cited article, neither bill would increase reimbursement rates for specialist care.

Such predicaments leave the Medi-Cal patients and the newly insured under Medicaid with insurance coverage,

However, denying them the essential medical service choices.

Hence, the Medi-Cal and Medicaid patient dilemma beckons the network availability with health care providers across the spectrum for meaningful health care access.

Concisely, the micro adjustments on the rules pertaining to the Medicaid program would alleviate the anticipated economic plight for the respective states and pave the way for long-term achievements at the macro proportion in the national health care legislation.

Failure to rectify the inherent inequalities could potentially exacerbate the state deficits inevitably affecting the national GDP.

In this matter, it’s poignant to follow the health care principle:

Prevention is better than cure.

Thank you.

Padmini Arhant


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