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Side Effects: More Americans Will Feel the Pain of Medicaid’s Shortcomings

Posted By Kathryn Nix On September 15, 2010 @ 3:00 pm In Obamacare | Comments Disabled

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Lawmakers shoved through Obamacare on the promise that it would decrease the number of uninsured Americans. The new law does this by expanding Medicaid’s eligibility to cover an additional 16 million Americans by 2019, according to the Congressional Budget Office (CBO).  However, recent analysis [2] from former CBO director Douglas Holtz-Eakin and American Action Forum analyst Michael Ramlet shows this strategy exacerbates existing problems within the health care system—making Obamacare’s biggest “benefit” questionable.

Medicaid, the destination for many of those projected to be uninsured under prior law, is a federal health program for low-income Americans. The program typically reimburses providers at significantly lower rates than do private insurers, often not even covering the cost for basic care. As a result, many physicians limit the number of Medicaid beneficiaries they see or drop Mediciad altogether, reducing Medicaid enrollees’ access to primary care and prompting many to overutilize emergency room care [3].

Obamacare proponents argued that increasing the number of insured Americans would reduce overloaded emergency rooms that have been squeezed because of patients using the ER for non-emergency needs. But, as Holtz-Eakin and Ramlet’s study [2] shows, the opposite will be the case under Obamacare.

“Beginning in 2014 with the mandated expansion of Medicaid eligibility, the historical rates of emergency department utilization indicate that policymakers should expect a substantial increase in annual emergency room visits,” they write. “In the next decade, hospital administrators and emergency room physicians can expect to see 68.1 million more Medicaid patients in emergency departments as a direct result of the Obama reform.”

In other words, Obamacare will actually increase the problem of low access to physicians and cause even more overcrowding in emergency rooms.  The legislation’s authors attempted to address this conundrum by increasing primary care physician reimbursement rates under Medicaid. But this two year “fix” has its own unintended shortcomings, including adding more fiscal pressure on the states [4].

Moreover, “treating patients in the most costly care setting will raise, not lower, national health expenditures,” the report authors say. By 2019, they predict that increased emergency care usage will increase health care costs by $35.8 billion. All the more reason for real reform to a bloated federal program.


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

URL to article: http://blog.heritage.org/2010/09/15/side-effects-more-americans-will-feel-the-pain-of-medicaid%e2%80%99s-shortcomings/

URLs in this post:

[1] Image: http://www.heritage.org/research/projects/obamacare/obamacare-in-pictures

[2] recent analysis: http://www.politico.com/pdf/PPM170_hcr_medicaid.pdf

[3] reducing Medicaid enrollees’ access to primary care and prompting many to overutilize emergency room care: http://www.heritage.org/Research/Reports/2009/04/How-Washington-Pushes-Americans-into-Low-Quality-Health-Care

[4] adding more fiscal pressure on the states: http://www.heritage.org/research/reports/2010/07/obamacare-impact-on-states

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