I decided not to abandon yesterday’s topic on the budget shortfalls of Medicaid because so much remains to be said regarding this. In my practice, I frequently am asked about fraudulent claims. It seems everyone jumps to the handy conclusion that anyone applying for Social Security benefits must be gaming the system. This public perception has absolutely nothing to do with the genuine struggles of people with long-term disabilities whom I am privileged to work for every day.
When policymakers propose cutting services to the needy, it helps if average taxpayers can tell themselves that the neediest don’t deserve it. Then we can go on about the business of cutting government safety net programs without any underlying guilt. But a myopic view of the world condition serves no one, least of all ourselves.
When I left off yesterday, I complained that the cost-cutting reforms of Medicaid should not be borne on the backs of the poor and disabled – the very group that Medicaid was designed to help. Too often in policy discussions, the easy implementation is to cut services.
Certainly, where fraud exists in the system it should be stomped out as it ruins the program’s integrity. Last year, the Georgia Attorney General recovered almost $58 million dollars in Medicare/Medicaid fraud prosecutions. And Kudos to Georgia Attorney General Sam Olens whose office investigates and prosecutes Medicaid fraud. However, if you look at my blog from yesterday you will see the annual Georgia portion of the Medicaid budget is 2.3 billion dollars. Thus, the percentage of the Medicaid budget attributable to fraudulent claims paid is less than one percent. Even if you assume that undetected fraud in the system raises that percentage, fraud is still not the driving force of Medicaid costs.
First, the recession has added more families to Medicaid rolls and the sluggish economy has done little to improve this. However, the bulk of the costs (over thirty percent) is long-term institutional care. Medicaid is the single largest payer of nursing home bills in America. The second largest cost to Medicaid is home-based health care provided to the chronically ill, elderly or disabled.
What I did not address in yesterday’s post was how we best address rising costs in Medicaid without cutting vital services to those that need it most. I am opposed to heavy co-pays on SSI recipients. This will only be a barrier to necessary treatment, and that may, in fact, cause more expensive Emergency Room visits and possibly institutional care. Studies on for-profit managed care companies handling Medicaid indicate that there are quality of care concerns.
Still, rising costs in Medicaid can quickly lead to state tax increases and reductions in services such as public safety or education. In the face of staggering budget deficits and growing unemployment, state legislators, faced with Medicaid taking up 20% of state budgets, are eager to cut reimbursement rates for Medicaid providers and reduce Medicaid rolls. How to reduce spending while ensuring basic and humane benefits for the most vulnerable citizens is the question challenging policymakers today. And the fact is that there are real human consequences when numbers don’t add up.
The reform I’d like to see is one proposed by President Ronald Reagan in 1982: Eliminate the state/federal sharing of Medicaid and federalize the whole program, much like Medicare. Medicaid really does threaten to crush state budgets. Responsibility for Medicaid should be shifted to the federal government where it belongs. Encapsulating the program into a federal model would allow for competitive bargaining and reduced administrative costs through efficiencies of scale. Federalization could actually control costs in effective ways that states cannot do alone. Moreover, the federal tax policy could shift the costs of the program onto those who can better afford to bear them. More importantly, health care costs could be contained without shifting the cost-cutting onto the elderly, disabled and poor, who can least afford it.