Medicaid Expansion

Bob Kamm, 11 years ago

Seth, you ask the question “Is Medicaid expansion too great a risk for states”, the assertion in the article about the Wyoming Legislature that you link in your forum.
I agree with you that in the short term it may well be too great a risk for states to expand their Medicaid programs, especially in Texas where we have so many uninsured. But, there may be an opportunity here, especially for a visionary leader like General Abbott. As you know, the current Medicaid system is an insurance based system, with rates set by the government, and no deductibles or co-pays for eligible Texans. That is, as Governor Perry has stated, a broken system that doesn’t deserve to be expanded.
I agree with that assessment; provider rates are so low that access and quality are negatively impacted, and since it is insurance based with no deductibles or co-pays, no one knows or cares about the price of the health service or how much of it is being consumed. And since no one knows or cares about price and utilization – not just in Medicaid – but in our overall health care system, including Medicare, employer based coverage, and charity care – health care prices and utilization will continue to rise in all these areas, including the ACA.
The problem with that scenario is that in the next five to ten years as health care spending reaches a critical tipping point, it could be a short leap to single payer, government run health care system for everyone (maybe resembling Medicare). So it may be much riskier for Wyoming to do nothing in the short term, unless it comes up with a better health care system than Obamacare or Medicare.
The opportunity is to develop a new Medicaid system. The states have always been considered “laboratories” for innovative public policy. What Texas can do, and Wyoming, and any other state that has not expanded Medicaid, is to develop a new, better health care system than the fragmented, dysfunctional, insurance based systems that are out there now. So far, none of the Texas leadership has taken this task on in any meaningful way.
The article you site states: “Reality is, any waiver approved by Health and Human Secretary Sebelius and the administration would obligate the state to deliver services to new enrollees who were never eligible for Medicaid before”. I would suggest to you that that reality is not the problem. Those individuals already receive health care; everyone in Texas receives health if they are sick enough and they want it. The problem is that we provide it in the most obscure and inefficient manner. The challenge to General Abbott and other Texas leaders is to develop a new efficient system that provides quality care to all citizens.
A new Medicaid system can be the prototype for this new system, and, if successful, the substitute for the single payer, government run system we will get if we do not create new health care systems in Texas and other states. If done right, the additional cost of the “new enrollees” mentioned above with be paid for by the savings from the new system and the $18 million dollars per day that Texas currently foregoes without expansion.
So what does the new system look like? I think that is up to the ingenuity and leadership that Texans can bring to this issue. Many of the points mentioned by General Abbott when he speaks about health care are excellent starting points. It needs to be more market driven; providers need the freedom to charge a price that reflects the cost of providing the service, rather than a price dictated by the government or an insurance company; consumers need the freedom to choose the services they want without the limitations and costs of “networks”; we all need to become “health care consumers” in a market where we know the price upfront and our options; we all need to pay our fair share of health care costs, rather than have all the hidden cost shifting that happens today; and, health care over time needs to transition from employer based coverage to an individual responsibility, with income tax benefits going to the individual.
A first step would be to look at passing legislation similar to HB 3020 by Texas state representative JD Sheffield this past session. The legislation, if adopted, would lay the foundation for a more competitive, market driven system by allowing providers to set their prices (even in a Medicaid system), but requiring them to post the price prior to delivering the service. To avoid the confusion created by “discounts” off some fictitious “billed charge”, and to encourage more simplified billing by providers, providers would charge the same price to whoever is purchasing their services (that is, no discounts, except on an individual basis).
These two simple changes would, over time, bring enormous savings to health care by introducing information to consumers and competition to our health care system. Doctors and other providers would be required to compete for your health care dollar based on price, quality, convenience and other factors. Consumers will be able to find out the cost of an MRI from an app on their smart phones. Doctors and other providers will be free to set their prices based on what it costs them to provide the service, rather than a rate negotiated with a health insurer. Networks, and their access fees, would no longer be necessary as consumers could access their doctor of choice. Administrative costs could be slashed, as everyone going in, doctor and patient, would know the price of what is being purchased.
So, getting back to your original question, there is a very serious, long term risk to not looking at Medicaid expansion. With the proper leadership and Texans working together (and making compromises on both sides), we can develop a new Texas Medicaid program that very well could become the model, and substitute for Obamacare, Medicare and other (totally)insurance based health systems that are inefficient and too expensive.