States dropping Medicaid and the impact on patients

by James Baker, MD

Lawmakers in over a dozen states are considering getting out of Medicaid altogether as a way of dealing with the impact of the new healthcare law on already-bad state budget deficits.

I can understand the frustration with federal intrusion into state policymaking that would lead some Texas lawmakers to suggest that approach. In doing so, you’d be freed of all of the federal rules, yes.

But you’d also lose two-thirds of the dollars that Texas uses to fund healthcare for people challenged by poverty and by disabilities.

And if the idea is that losing those dollars would be tolerable because Texas would, going forward, only focus on paying for long-term services and not on acute care, here’s the problem with that. Not one of the patients with acute problems will go away.  And when they show up at the emergency room (the only place they would have left to go), the doctors in the ER’s wouldnt (couldnt) turn them away.

So who would pay instead of the feds?

Well, the cost would shift to the local hospitals, and in turn to the taxpayers who fund those hospitals, either though increased local taxes (in the big cities) or through increased insurance premiums (throughout the state).

So in trying to send a message to Washington, Texas lawmakers who pull out of Medicaid actually end up hitting up the pocketbooks of the very taxpayers who just elected them.

James Baker is a child and adolescent psychiatrist with Metrocare Services who blogs at Mental Notes.

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  • soloFP

    My state is 6-12 months behind in medicaid payments to doctors and pharmacists. Medicaid rates are around 50% of Medicare, and most docs do not accept new Medicaid patients. Most Medicaid patients use the public health clinics or ED for care, as no other docs will see these people. Medicaid is a big loss in my state, and the state currently cannot keep paying for the care. It is a lose-lose situation, as the patients can’t get care, the state can’t afford all the ER visits for not acute problems, and doctors outside of the ER/publich health clinic don’t want to see Medicaid patients.

    • SmartDoc

      Totally correct.

      Private practitioners cannot afford (in general) to take Medicaid cases. It is 90% public clinics.

      Medicaid is a sick joke reminiscent of the old East German workers’ motto: “You pretend to pay us, we pretend to work.”

  • Marc Gorayeb, MD

    Standard political piece. Not so great policy piece.
    In politics, the basic laws of economics are an ‘inconvenient truth.’ The feds can incur unlimited debt, and by forcing the states to incur more of their own debt to receive their welfare payments, the states are made ever more dependent on the feds. This is an immutable law of government: a government that can print unlimited money will always seek to dominate other governments that can’t.
    State governments can be made financially dependent on the federal government because of its power over the currency. It is through this power that the federal government can dictate social policy to the state governments; a power it otherwise would not clearly have under a common-sense reading of the Constitution. Thus the federal government will do everything in its power to prevent Texas from throwing off its federal financial shackles.

  • Med School Odyssey

    What’s the probability that hospitals would respond by shuttering their EDs?


    Tell me again why the discourse should be toned down, again, one more time, this time real slow.


    They should shut em down when the payer mix actually flips and competes with their status of non profit and its financial benefits to the hospital.

    I think Fonzi is about the jump the shark soon for some.

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