The expansion of Medicaid under Obamacare  has become a major sticking point in the senate’s attempt to craft a bill to replace Obamacare because many states have taken the Obamacare bait to increase their Medicaid roles.  The following article on California’s Medi-Cal program shines a bright light on how the expansion of Medicaid is endangering  our health care system.     Nancy 

Medicaid’s Potemkin Health Coverage

California is a case study: One patient suing the state says she went to Mexico to get her gall bladder out.

July 19, 2017  by Allysia Finley  Ms Finley is a editorial writer for the Journal

If ObamaCare’s expansion of Medicaid were measured merely by growth in enrollment and spending, California’s Medi-Cal program would rank as a huge success. Since 2012, Medi-Cal has added six million beneficiaries, primarily able-bodied adults of working age. Covering them last year brought California nearly $20 billion in additional federal funds. If Medi-Cal were a state, its population of 14 million would make it the fifth-largest in the U.S. The program’s $103 billion budget is about three times the size of Illinois’s general fund.

But despite the surge in enrollment and spending—or perhaps because of it—Medi-Cal has failed to fulfill its stated goal of improving health-care access for the indigent and disabled. A recent report from the Santa Clara County Civil Grand Jury highlighted the conundrum many of the state’s Medicaid enrollees face: “You’ve Got Medi-Cal, but Can You Get Medical Care?”

By extending Medi-Cal to younger, healthier people—many of whom could be better served by the kind of bare-bones private insurance that ObamaCare outlawed—California has made it harder for those who most need low-cost care to get it.

Medicaid operates as an open-ended entitlement, meaning the federal government covers a predetermined share of state spending, regardless of the total cost. Traditionally, the feds have matched California’s outlays dollar for dollar. States where the per capita income is lower receive a more generous match. Nevada, for example, receives about two federal dollars for each one it spends.

ObamaCare encouraged states to expand Medicaid so that it covers people with incomes up to 138% of the federal poverty line—in other words, up to $16,400 for an individual. After the Supreme Court struck down ObamaCare’s mandated expansion, the federal government induced states to sign up by initially assuming 100% of the cost for these people. That will slip to 90% in 2020, though it’s still a bargain for most states.

Imagine if Amazon gave you money back whenever you bought things on its site—and you got more money back the more you spent: You’d buy things you don’t need, and things that might be purchased for less elsewhere. That’s what has happened, in effect, with Medi-Cal, which covers everything from acupuncture to chiropractic care to vision.

But good luck getting a doctor’s appointment. Last week a group of Medi-Cal beneficiaries sued the state for creating “a separate and unequal system of healthcare, one for the insurance program with the largest proportion of Latinos (Medi-Cal), and one for the other principal insurance plans, whose recipients are disproportionately white.” One plaintiff had her gallbladder removed in Mexico after she spent more than a year trying to find a surgeon who would treat her. The doctor in Mexico had warned she was at risk of death if she put off the surgery, so her family paid for it out of pocket.

The problem is that Medi-Cal reimburses providers at between a third to half of the rate that private insurers pay. Doctors complain they lose money on each Medi-Cal patient they see. That’s why only 55% of primary-care physicians accept new Medi-Cal patients, according to a recent study from the California Health Care Foundation. When physicians were asked why they cap the number of Medi-Cal patients they see, 78% cited the program’s low payments.

This poses a particularly acute problem in places with large Medicaid populations like Fresno County, where half of residents are in Medi-Cal. Farther north, the UC Davis Medical Center terminated its managed-care contract with Medi-Cal two years ago because of low payments. The Santa Clara grand-jury report says that “half of the primary-care physicians in the Bay Area do not treat new Medi-Cal patients; most cite low reimbursements, time-consuming paperwork, and payment delays.” In effect, Medi-Cal rations care by underpaying providers.

The shortage of doctors accepting Medi-Cal, together with the surge in enrollment, brings patients to the emergency room instead. ER visits by Medi-Cal patients rose 75% over the past five years, according to California’s Office of Statewide Health Planning and Development. The Santa Clara report says that in the first three quarters of 2016, Medi-Cal enrollees in the county were more than twice as likely as the privately insured to visit the ER for outpatient care.

“The biggest financial and administrative problem we have is Medi-Cal patients who could have been seen by a primary care physician flooding ERs,” says Donald Cornforth, chief medical officer at Adventist Health Bakersfield.

Before ObamaCare, Dr. Cornforth says, many indigent residents would seek treatment at low-cost rural community health centers or clinics along the Mexican border. Now Medi-Cal patients with minor maladies are inundating ERs, where they get free care and take up beds needed for patients who require urgent treatment. He says a sister hospital had so many Medi-Cal patients streaming in during flu season that it had to erect a tent outside the hospital.

This is a tremendous waste of resources, since a visit to the ER costs five times as much as an appointment with a primary-care physician. But California has little reason to care, since Washington pays most of the bill. At the same time, hospitals are losing money on many of these new Medi-Cal patients because the government’s low payments often don’t cover the cost of care.

It’s worth recalling that liberals claimed ObamaCare would reduce ER visits—and thus health-care spending—since newly insured patients would go to a primary-care physician instead. That hasn’t happened. In California and elsewhere, Medicaid provides Potemkin coverage at a high cost to taxpayers. Democrats denounce as cruel any GOP plan to put the program on a fixed budget. The status quo, however, is not only heartless but stupid.

Ms. Finley is an editorial writer for the Journal.







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