Although a Medicaid expansion under the provisions of the Patient Protection and Affordable Care Act (PPACA) seems unlikely in the 2014 Legislative Session, Florida’s leaders will continue to grapple with the issue. A new policy brief from The James Madison Institute (JMI) explores the many problems with Medicaid and alternative solutions that can ensure those in need attain better access to timely medical care.
“Doubling down on the flaws of the current Medicaid program and its expansion are risky propositions for Florida,” said Dr. Bob McClure, JMI president and CEO. “We too want to see improved access to health care for the underinsured and the uninsured. However, simply expanding a program that is unreliable and filled with broken promises on the premise that the federal government is dangling money to the states is fool’s gold. Market reforms that put patients first instead of bureaucrats will provide better outcomes for Floridians such as quality care, lower costs and expansion of coverage.”
“Alternatives to Expanding Florida’s Medicaid Program” reminds Floridians that:
- Over the last 12 years, Medicaid in Florida has grown five times as fast as general revenue and currently accounts for 30 percent of the state budget.
- There are flaws with the viewpoint that this is a “good deal” for Florida. The federal government’s promise to fund 100 percent of the cost is:
– Temporary: There is no guarantee that a future Congress and administration will maintain this higher match for those added to the Medicaid program under the new eligibility guidelines (those with incomes up to 138 percent of the federally defined poverty level).
– Only applicable to the newly eligible: The federal government’s promise does not cover the cost of patient additions to the current, state-funded Medicaid program (those that already qualify, but have not yet enrolled) Our current Medicaid program continues to grow and consume state funds that could otherwise be used for other important priorities such as education and public safety.
– Funded by tax dollars: Taxpayers in Florida are still footing the bill for a Medicaid expansion; it’s not “free” money. The end result of the federal government providing funds for the program versus the state is the same for Floridians: increased costs, more taxes, slower growth and another step for the nation toward greater debt.
“The economics of the Medicaid expansion are bad, but the health care involved for the underserved is even worse,” said Jason Fodeman, M.D., JMI adjunct scholar and author of the policy brief. “Medicaid is beleaguered by bureaucracy, fraud, rising expenditures, restricted access, and compromised patient care. By applying further strain to an already strained system, expansion could very well worsen the quality of the care that current Medicaid patients receive.”
Fodeman explains that the current problems that plague the Medicaid program are deeply rooted at the core of the Medicaid statute and cannot be rectified without comprehensive Medicaid reform. He lists several issues that leave state lawmakers with few options to constrain costs other than paying providers less. He points out that Florida Medicaid reimbursements are lower than the national averages.
“Medicaid’s business model is not a free lunch or an example of free-market economics. Rather it is centralized price controls – nothing more than the government bludgeoning prices down by fiat,” said Fodeman. “Ultimately, these price controls are passed along to Medicaid patients in the form of diminished access, long waits for appointments, and compromised care.”
The policy brief outlines health system reforms at the state and federal level that could provide an alternative to expanding the Medicaid program including:
- Telemedicine: Implement and expand telemedicine, especially into the state’s Medicaid program. Florida could selectively incorporate telemedicine into high-cost areas where this new discipline can be used to enhance access, improve efficiency, and lower overall costs of the program.
- Price Transparency: Pool and make public pricing data to give patients clearer insight into the costs of medical interventions, thereby giving them more tools to become smarter consumers of health care dollars. Increased public awareness would also put pressure on higher-cost suppliers to lower their prices to attract patients.
- Pro Bono Care: Provide a malpractice haven under the Federal Tort Claims Act that would protect doctors who would like to provide “charity care.” The cost of malpractice insurance can be daunting, especially in certain specialties and in certain geographic regions of the state. Florida could consider substituting an administrative system akin to the workers’ compensation system used for patients who incur an injury or illness in the workplace. In addition, the state could arrange for forgiveness of the medical school loans for those providers who agree to “work off” the obligation by donating a stipulated amount of services during a given time period.
- Provide Health Insurance: Provide a Health Savings Account (HSA) with a reasonable deductible. This could be considerably cheaper than placing these patients into Medicaid, and it would also be likely to provide them with better access to quality care. For those who could not pay the deductible, grants, donations, charity care and other means could be created at the local level to assist.
“Reasons abound as to why Florida and nearly half of the states in the nation have concluded that a Medicaid expansion under PPACA provisions is unwise,” said Fodeman. “Florida has an obligation to use the debate as an opportunity to reform its health care delivery system to ensure that the most financially fragile and medically vulnerable receive the care they need and deserve.”
Read the full policy brief, “Alternatives to Expanding Florida’s Medicaid Program” here.