Strangling the Medicaid program

October 31, 2012

Helen Redmond explains why a program that is critical to the health of tens of millions of people faces a future of more cutbacks and restricted access to care.

MEDICAID--the government health insurance program for the poor--is facing dire threats no matter who wins on November 6.

Republican vice presidential candidate Paul Ryan is author of a proposal to turn Medicaid into a block grant program that would eliminate federal requirements on state governments. His plan would slash spending by $771 billion over 10 years.

But during the four years of the Obama administration, state governments have slashed billions from Medicaid already through tightened eligibility requirements and severely reduced or eliminated benefits--often with the approval of the administration in the form of waivers granted to the states.

This comes on top of last spring's Supreme Court decision on the Patient Protection and Affordable Care Act. A majority of justices voted to uphold the health care law's central element--the mandate requiring millions of people to buy defective policies from private insurers--but they struck down a provision intended to cover some 16 million people through expanding the Medicaid program to wider layers of the poor and working poor.

Patients fill the waiting room of the emergency room at Chicago's Stroger Hospital
Patients fill the waiting room of the emergency room at Chicago's Stroger Hospital

Essentially, the justices gave state governments the right to opt out of the Medicaid expansion--and already, Republican governors in 13 states say they'll take advantage.

So Medicaid is under a sustained assault. But that has been true of the program since it was created 45 years ago.

Medicaid is a favorite "big government" program to target for cuts--despite the fact that it's critical in maintaining the health of the disabled and the poor. For millions of people, Medicaid is the only thing standing between them and catastrophic health problems or medical bankruptcy.

Medicaid provides health coverage for more than 30 million children, about one in three in the total population. It also covers around 11 million non-disabled, low-income adults, including millions of pregnant women; close to 9 million non-elderly disabled people, and more than 8 million seniors who are "dually eligible" for Medicaid and the Medicare health program for the elderly. Medicaid covers monthly premiums and cost-sharing for benefits not covered under Medicare.

To hear politicians talk--Republicans like Ryan, of course, but Democrats, too--Medicaid is a burden on taxpayers. They describe it as a wasteful and "broken" program.

Contrast this to how a government program that truly is wasteful and broken--the military--is portrayed. The total cost of wars in Iraq, Afghanistan and Pakistan is estimated to be as high as $4 trillion, according to the Cost of Wars project of Brown University researchers. Defense Secretary Leon Panetta admitted that when Pakistan closed its borders with Afghanistan, the U.S. military spent an additional $100,000 million a month to organize alternative supply routes.

Yet no one in Congress is talking about this spending as a drain on taxpayers.

UNLIKE THE military, Medicaid has been systematically hollowed out over a period of decades, with dire consequences for recipients.

This process has accelerated during the worst economic crisis since the 1930s with deeper and deeper cuts. According to a recent study in Health Affairs, provider reimbursement rates have dropped so low that nearly one-third (31%) of physicians aren't accepting new Medicaid patients. Under their Medicaid programs, the state of California reimburses doctors at 38 cents for every dollar private insurance pays, and New York pays doctors 29 cents on the dollar.

Applying for Medicaid is onerous. The application process is complicated and time-consuming--those attempting to obtain benefits have to meet stringent income and asset guidelines, and in some states, doctors must submit medical documentation about disabilities. Applications can take up to three months to be processed.

Vanessa Liston, a Medicaid recipient in Pennsylvania who suffers from Crohn's disease, waited for two-and-a-half months for the decision on her application, only to learn she had been denied. "They didn't accept the paperwork proving I was disabled and unemployed," she said. "I had to send more proof."

To further shrink state budget deficits, Medicaid is shifting more of the cost of care onto recipients, in the form of co-pays for prescription medication, doctor and emergency room visits.

In Illinois, Medicaid enrollees are now limited to four prescriptions a month, there are co-pays for prescriptions for non-pregnant adults and, eligibility criteria were changed to eliminate more than 25,000 adults from the rolls. As Tom Wilson, a community outreach coordinator for health care at Access Living in Chicago, put it:

The Medicaid cuts in Illinois have meant hardship to many of the disabled people I work with. For those who live on SSI, their income of $700 a month means that there are no margins, and as the co-pays for drugs and doctor visits have increased, people have been forced to make unsafe choices. The utilization reviews for drugs and durable medical equipment also puts people at risk.

Vanessa described the struggle to obtain needed prescriptions with co-pays increasing all the time:

I couldn't buy a topical cream because it wasn't on the formulary, and it cost $284. I needed an antihistamine to relieve itching and couldn't get it because it cost $47. I pay $11 a week for a B12 injection because Medicaid only pays for one a month. And one time my pharmacy coverage was accidentally cancelled. I was taking a medication that my doctor told me was extremely important not to miss a dose. I had to beg the pharmacy to give me one pill.

One widespread complaint about Medicaid is the long wait time to see doctors--for primary care physicians, it can top three months, and for a consultation with a specialist, the lag time can triple.

And in some parts of the country, the wait isn't the problem--there simply are no doctors who accept Medicaid.

Medicaid vision and dental services have been gutted--categorized as "optional," as if the mouth, teeth and eyes weren't part of the human body and don't impact overall health.

The gaps in dental coverage have a huge impact. A majority of dentists don't accept Medicaid, and finding a pediatric dentist, in particular, is a challenge--as a result, on average, two-thirds of children on Medicaid don't visit a dentist in a given year. A report by the Kaiser Commission on Medicaid found that almost half of states cover dental care only for pain relief and emergencies.

Massachusetts stopped paying for fillings, root canals, crowns and dentures under Medicaid. But according to a recent article in the New York Times, coverage for these dental procedures was partially restored--only for teeth in the front of the mouth. The twisted logic of the move was explained by Courtney Chelo, coordinator of an oral health task force at Health Care For All in Boston: "A lot of folks are out of work. If you have a gap in the front of your mouth because you had a tooth extracted, it's much more difficult to get a job."

In reality, not having access to dentists can be deadly. In a highly publicized case in 2007, 12-year-old Deamonte Driver died from a tooth infection that spread to his brain. Deamonte's mother couldn't find a dentist who accepted Medicaid--only 900 out of 5,500 dentists in Maryland did at the time. Deamonte ended up in the emergency room and was given antibiotics, but it was too late. A few days later, he was rushed to the hospital for emergency brain surgery. Deamonte died several weeks later.

THE RELENTLESS evisceration of Medicaid has fueled high levels of dissatisfaction with the program, among both patients and providers.

Solving the problems that plague the system wouldn't be difficult: simplify the application process; restore all medically necessary services, including dental and vision; and increase payments to providers so all doctors accept Medicaid patients. It's not a question of money. A government that within weeks could find hundreds of billions of dollars to bail out the banks can find the money to fully fund the Medicaid program.

But instead, Medicaid is being privatized and sold off in chunks to investor-owned, profit-driven, managed care corporations. Supposedly in an effort to control costs, states have mandated that recipients leave traditional Medicaid and enroll in managed-care plans. But there is no evidence that managed care is more cost-effective or provides better quality than the traditional fee-for-service system.

Currently, 47 states operate managed care systems, which account for around two-thirds of the 60 million Medicaid enrollees. The largest Medicaid managed-care plans are operated by insurance giants that answer to Wall Street investors--UnitedHealthcare has enrolled 3 million Medicaid recipients, WellPoint has 1.7 million, and Aetna has 1.2 million.

Managed care is a disaster for patients. The plans are notorious for delaying and denying care and restricting enrollees to physicians who are part of their networks.

Hannah Wolfe, a doctor of clinical psychology and director of behavioral health at St. Luke's-Roosevelt's Center for Comprehensive Care in New York City, has seen the problems caused by managed care:

The way managed care makes money is by providing the least possible care. Multiple barriers to care are thrown up, which discourage patients from getting needed care and providers from providing it. For the first few years, people with HIV were exempt from mandated enrollment into one of these horrendous organizations as they were deemed to be vulnerable and in need of specialized care. Last year, this exemption ended.

Patients with chronic physical and mental health conditions suffer disproportionately under managed care--because ongoing medical and psychological services cut into profit margins.

Wolfe connects the need for mental health care with the economic crisis that is still hammering millions of Americans:

We are in a time of recession. People are suffering more than ever from poverty, joblessness, food insecurity and the fallout from the war on drugs. They are in need of mental health services more than ever, and Medicaid managed care is managing to profit by making it more difficult for them to access these services. It is criminal.

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