THCB

Privatize Medicaid? Have We Learned Nothing??

As we move thru 2011, many states are eagerly progressing with implementation of the Affordable Care Act (ACA). We have many Early Innovators that are leaders in setting up the state based exchanges.  These states are Kansas, Maryland, New York, Oklahoma, Oregon, Wisconsin and a multi-state entity led by the University of Massachusetts Medical School that consists of Connecticut, Maine, Massachusetts, Rhode Island, and Vermont.  Furthermore, Vermont is poised to pass the country’s first state-wide single payer system.

You can imagine when I look in my own back yard I get a bit depressed. Despite our 80 degree sunny weather, our state is leading the charge to overturn the ACA. Our newly elected governor, Rick Scott (the past CEO of Columbia/HCA when the company pleaded guilty to MCR fraud and paid $1.7 bil fine) is singularly focused on not implementing the ACA in Florida. As the months go by and other states move forward, we continue to move backwards.

As expected, it is the poor and sick that continue to suffer the most. The current assault occurring in Florida is on Medicaid. Medicaid currently covers close to 3 million Floridians (nearly 15% of the population) at a cost of nearly $19 billion dollars. The cost of each state Medicaid program is a burden shared jointly by the states and the federal government.

For every $1 spent by the state, the federal government matches $1.84. Florida Medicaid already has some of the most restrictive eligibility criteria in the country, such that the only people who can qualify for Florida Medicaid are: 1) low-income infants, toddlers, preschool-age children, and pregnant women; 2) extremely low-income school-age children, seniors, people with disabilities; and 3) parents of children in deep poverty. 60% of FL Medicaid recipients are children.

So this so called ‘safety-net’ has some gaping holes in it. It leaves the working poor with no insurance options. The ACA calls for an expansion of Medicaid eligibility so that poor who make less than 133 percent of the federal poverty level would become eligible. Currently, that means a single person who makes $14,404 or less, and a family of four that has income of less than $29,327 could be on Medicaid. Instead of trying to strengthen this safety net and help insure more Floridians, the governor and legislature has stated that the cost of expanding Medicaid is a burden our state cannot handle. They may not be aware that during this expansion, the federal government would match the spending initially at 100% and then drop to 90% by 2019. This would offer coverage to 1.5 million previously uninsured Floridians by 2019 at a cost of between $149 million in 2014 and $1.1 billion in 2019

The state of Florida has instead chosen to press forward with a plan to privatize Medicaid. In 2005, then Gov. Jeb Bush began a pilot program to privatize Medicaid plans in 5 counties. This plan has been met with much criticism both from providers and beneficiaries. Concerns were raised back in 2007 by AHCA Inspector General Linda Keen regarding the plan’s success.  Georgetown University researchers raised issued and noted that some doctors couldn’t afford to provide care to Medicaid patients under these plans. The University of Florida released an analysis of the pilots in 2009 that revealed some modest cost savings but made no analysis of quality or accessibility of care.

These plans reimburse physicians at 58% of Medicaid reimbursement rates. Some of my colleagues find that seeing these patients actually costs them money. This has obviously led to low acceptance and participation by providers.

I currently participate in 5 private Medicaid plans. Four of them require paper claims for reimbursement as well as onerous authorization procedures. I currently care for a 4 year old child with recurrent seasonal wheezing that has concomitant growth delays. I have attempted to treat her with a leukotriene modifier drug. Her private Medicaid provider denied my request, insisting that I use a generic nebulized steroid preparation. I engaged in a peer-to-peer review to try and get approval (that lasted 15 minutes over the phone), after exhausting 3 levels of paper prior authorizations. The friendly doctor I spoke with apologized that the drug could not be approved and when pressed for a reason, his answer was clear- COST. My patient will have to be placed on a medication that could further stunt her growth when a safer option is available, because her privately administered Medicaid insurance plan needs to make more profit.

I am amazed at how history repeats itself. Did we learn nothing from the failed experiment of privatizing Medicare?  As a reminder, Medicare Advantage programs cost taxpayers 14 percent more than traditional, fee-for-service Medicare. This additional cost did not contribute to better care for seniors. It surely lined the pockets of the insurers with big profits. The same thing will happen in Florida if we agree to let Medicaid become a private endeavor. And millions of Floridians will again be left poor, sick and uninsured.

We will fight to implement the ACA because it will benefit Floridians. Amazingly, doctors are united in their push back against the plan to privatize Medicaid. I take some solace in that, and will continue to vicariously enjoy the improvements being made in other states across the country.

Mona Mangat, MD, is an Allergy & Immunology specialist in St. Petersburg, FL. She blogs at Doctors for America, where this post first appeared.

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parenti insuranceMauricejoeedhMartinGrant Recent comment authors
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parenti insurance
Guest

Great study Mona.

Maurice
Guest

In Australia we have great health care. The public sector could be better, but it’s certainly better than relying on private institutions.

Nate Ogden
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Nate Ogden

AZ providers were never nearly as integrated as UT and N CA. Some pockets but it would be much harder to pull off an IMHC in a big metro area then rural UT or ID.

joeedh
Guest
joeedh

I actually had the UHC coverage in Arizona. Thanks for explaining the exemption, that makes sense and sounds important. I suppose it was wishful thinking that the for-profit health insurer problem would magically go away itself. When say it that way, it does sound really stupid.

joeedh
Guest
joeedh

I’ll have to do that, Nate. My libertarian leanings makes me uneasy to outright ban profit in healthcare insurance markets, but if absolutely necessary I suppose there’d be no other choice. I mean, I can’t argue for the virtues of social service markets without real social service markets. I’ve been on Kaiser, Intermountain Healthcare’s Select Med, and United Healthcare. Of the three, only United Healthcare is for-profit. Kaiser and Select Med are both HMOs, and the quality of care is astounding. United Healthcare, on the other hand, tried to reject most claims, the doctors didn’t coordinate with each other at… Read more »

Nate Ogden
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Nate Ogden

Your comparing an Insurance company to an integrated care provider that also sells insurance. When measuring UHC EMRs, cordination, and such shouldn’t even be discussed. That was the doctors you chose to see not UHC. In Ohio Kaiser uses Cleveland Clinic facilities for example. You can find integrated doctors just as fancy and up to date in UHCs network you just need to pick them from the much broader choice of providers, and thus one of the reasons other insureres exist. “Since I heard that healthcare companies are exempted from antitrust law,” If you believe 10% of what you hear… Read more »

joeedh
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joeedh

A few points. First, any state that uses for-profit insurers for privatizing Medicaid is insane. Social service markets don’t need profit motives the way other markets do, and I honestly believe that for-profit insurers wouldn’t even exist if not for government protection (i.e. the exemption from federal antitrust law). Second, if existing Medicaid structures are working well (which I completely disagree with, but if they were) than ideally the state would simply duplicate its existing system into three or four non-profit companies that compete with each other, and monitor them to catch market failures. Obviously privatizing social insurance programs into… Read more »

Nate Ogden
Guest
Nate Ogden

joeedh,

Do you even know what the exemption is? From your comment you obviously don’t, you might want to read up on it if you care about having an informed opinion.

Martin
Guest
Martin

I don’t think privatizing Medicaid is the answer. I worked for one of those Medicaid mills that assault patients who don’t have insurance in the ER to try to get them signed up for Medicaid and the abuses against patients were untold. I finally quit out of sheer disgust. The woman running it was an absolute heartless pig. One patient complained to me that one of these cheeky, idiot reps told her she would not be able to take her newborn home from the ICU if she did not consent to signing Medicaid forms. What kind of abuse/crap is that??… Read more »

nate ogden
Guest
nate ogden

thanks for the constructive comment. Any contribution to the actual subject of the post?

Grant
Guest

Mr. Ogden,

1. Learn to spell. Or, are you “to lasy”?
2. Don’t be an asshole.

Cheers

nate ogden
Guest
nate ogden

“How sad, Barry. If you tried to approach a private capital firm with a business plan based on so many “maybe” and “perhaps”, you wouldn’t be able to raise one red cent,” Margalit you must really be sheltered. just when I think you hit rock bottom of commenting you come out with something like this. .com boom, and crash, ever hear of it? Have you never read some ideas that got millions in funding. I beleive the number is 50%+ of restraunts and 80% of bars fail, where did all that money come from? Investment firms through money at plenty… Read more »

nate ogden
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nate ogden

“It’s hard to find data on the acuity of the two populations because insurance companies won’t publish enough data to help us know that.” Then you link to articles that discuss 4-5 studies of MA data. what data would you like to see that is not available? How does diluting the DSH ratio prove FFS is sicker then MA? It just proves the government doesn’t want to pay as much and ratching down everyone’s, well the 69% in MA service areas, payment is a quick way to do it. ” this blog post has three published articles which show there… Read more »

nate ogden
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nate ogden

Leave it to Maggie Maher to bring a subjective opinion pool to a factual argument. Odd Maggie any idea why they didn’t ask how much they would pay for Basic Medicare benefits? Lets see how many seniors would pay $7000 a year for basic Medicare. Or lets ask 20 somethings how much they would pay for a non existant social security benefit 47 years later.

Go peddle your junk science on your blog where you edit all disenting views.

Barry Carol
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Barry Carol

“A 2009 study published in the International Journal of Health Care Finance and Economics reveals that when Advantage beneficiaries were asked how much they would pay, out of their own pocket, for the benefits provided by their insurer, they estimated the value of those benefits at 14 cents for every extra dollar that Medicare was ponying up. As economist Austin Frakt, a co-author of the report, explains: This relatively poor return of value on taxpayer dollars is why I support reductions in Advantage payments. The administration and congressional Democrats have chosen the right path for Advantage payment policy.” Maggie –… Read more »

Maggie Mahar
Guest

Nate writes: “Are they to lasy or to stupid to look up how these plans run and where the 14% went. FYI Dr. federal law required a set amount of that premium be spent on additional benefits so it was impossible for it to increase their profits. If you can’t get simple facts like that strait the rest of your post can’t be any better. . . . Simple basic facts.” Here are the facts abourt the extra payments to Medicare Advantage plans: “. even Advantage customers acknowledge that the “extras” that Advantage plans offer just aren’t worth that much… Read more »

Margalit Gur-Arie
Guest

How sad, Barry. If you tried to approach a private capital firm with a business plan based on so many “maybe” and “perhaps”, you wouldn’t be able to raise one red cent, but tax payers are somehow expected to invest many billions in this snake oil enterprise…. I, for one, am fed up.