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Side Effects: Medicaid Reimbursement Crisis Hits Texas

Posted By Kathryn Nix On July 14, 2010 @ 4:00 pm In Obamacare | Comments Disabled

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Obamacare promises that, some years down the road, every American will have health insurance. But the whole point of having health insurance is to get medical care when you need it, and that’s not part of the Obamacare promise.

The new law aims to use Medicaid to cover 16 million otherwise uninsured Americans in 2019.  But there’s a problem with Medicaid.  It reimburses doctors at rates dramatically lower than private insurers do.  In fact, it pays doctors far less than even Medicare does. In many cases, Medicaid reimbursement does not even cover the overhead cost of treatment, meaning that physicians actually lose money treating Medicaid patients.

Doctors want to heal patients—but they’re not much interested in paying for the “privilege” of doing so.  Already, many physicians simply refuse to see Medicaid patients.  They just can’t afford to operate at a loss.  And with the advent of Obamacare, the situation is about to get a whole lot worse.  Take Texas, for example.

Medicaid, though a federal program, is partially funded by states.  And the recession has put a major crimp in state budgets.  (Unlike the federal government, most state governments are constitutionally required to maintain balanced budgets.)  For states looking to cut spending, Medicaid appears to have a bright, red bulls-eye painted on it.

In Texas, it accounts for 75 percent of the entire budget of the Health and Human Services Commission.    As Commission spokeswoman Stephanie Goodman notes, [2] “[W]hen you start to identify places to reduce our budget, it gets very hard to skip Medicaid.”

To help make budget, the Commission is trimming Medicaid reimbursement rates by 1 percent, effective Sept. 1.  It’s the first of a series of scheduled cuts.  And it will doubtless lead more doctors to drop Medicaid patients.

That’s a big problem.  As the Commission notes, even before the rate cut takes effect, “less than a third of the state’s 48,700 practicing doctors accept patients covered by the federal program.”

The Texas Medical Association surveyed its members and found that 45 percent those responding said they would limit how many Medicaid patients they would treat if the fees were “cut by 1 or 2 percent.”  Another 24 percent said they would stop accepting Medicaid patients altogether.

As more and more doctors withdraw from Medicaid, more and more Medicaid patients are having trouble finding a physician to treat them.  It’s hard to see how the program can possibly deliver health care to an additional 16 million patients dumped into the mix by Obamacare.

Rather than overload an already fractured program, lawmakers should reform Medicaid [3] so that low-income Americans can receive the same quality of care others receive in the private market.  For now, the only hope of this happening is in full-on repeal of Obamacare, followed by replacement with something a whole lot better for patients and doctors.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2010/07/14/side-effects-medicaid-reimbursement-crisis-hits-texas/

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[1] Image: http://www.foundry.org/wp-content/uploads/SideEffectsLogo3.jpg

[2] Commission spokeswoman Stephanie Goodman notes,: http://www.nbcdfw.com/news/health/Doctors-Threaten-to-Pull-Out-of-Texas-Medicaid-98202569.html

[3] reform Medicaid: http://www.heritage.org/Research/Reports/2005/06/A-Road-Map-for-Medicaid-Reform

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