Today’s story about California hospitals suing Medi-cal comes on the heels of a
week of meetings between state governors and the Bush administration about
Medicaid. Medicaid has long been a dog’s breakfast of American health policy
with all types of programs thrown together. It’s a health insurer for the very
poor, it’s a long-term care plan for some of the elderly, it’s a subsidy program
for large inner city hospitals (the DiSH program), and it even pays Medicare
Part B premiums for those "dual eligibles" too poor to afford them. In addition,
in many states the CHIP program for near-poor children is rolled into Medicaid
too. Furthermore, many states use what are now called by HHS secretary Leavitt
"accounting gimmicks" to get more of their program on the Feds’ tab.

The problem is that all these programs tend to be underfunded anyway, and in
a time of state and federal budget squeezes, they come severely under fire.
Taking even another $6 billion per year out of the program, as the
Administration proposes, feels to the states like getting blood out of an
already over-squeezed stone–even if the GAO says its only $5bn a year. A rational system would somehow fold Medicaid into
some type of universal insurance system. But we are not getting that any time
soon, and right now many poor Americans and their safety net providers rely on
Medicaid to keep them from toppling into the abyss. So expect the politics of
desperation to play out in that sector over the next few months.

This is not going to be a fun time to be either a Medicaid recipient, or worse someone who would like to be.  And that includes a lot of young and poor children.  It’s also not going to be fun to be a safety-net provider who relies on Medicaid as one of their better payers.