As secretive deficit-reduction talks by congressional leaders and Vice President Joe Biden accelerate this week, congressional Democrats are increasingly nervous that Medicaid will bear the brunt of healthcare-related cuts in federal spending.
The conservative approach to saving Medicaid
No one outside of the group of negotiators knows specific cuts the group is considering. But the size of Medicare and Medicaid (25% of all federal spending) make cuts to them likely cornerstones to reducing the federal government's historic debt and deficit.
Potential cuts in Medicare spending—such as those outlined in the House-passed budget plan—have dominated the news recently and a recent New York special congressional election. But Democrats and liberal activists have said that they are most concerned about healthcare cuts focusing on Medicaid because its base of beneficiaries is much less politically active than enrollees in the senior-focused Medicare program. That would leave politicians who vote to cut Medicaid paying a smaller political price.
This week, Republicans and conservative policy wonks forcefully made the case that Democrats should worry about Medicaid. But not because it's in danger; it's because the program already is non-functioning.
Among the key failings of the state-federal program for low-income Americans is the lack of access to clinicians. Because reimbursement rates are significantly lower in most states than private insurance, said Sen. Tom Coburn (R-Okla.) at a Tuesday Capitol Hill event, 40% of primary-care providers and 65% of specialists refuse to treat Medicaid beneficiaries. The result is a lack of preventive care and early treatment that results spiraling morbidity rates.
“We're not just talking about dollars,” Coburn said. “We're talking about people's lives.”
Coburn and Sen. Richard Burr (R-N.C.), who also spoke at the June 14 event sponsored by the conservative American Action Forum and (and moderated by me), urged turning over control of the program to the states so they could experiment with different payment and care approaches.
“Who says that bureaucrats in Washington care more about Oklahomans than the government in Oklahoma?” Coburn said about the current requirement for states to obtain approval from HHS before making major changes to their Medicaid programs.
It's an approach that Republican governors also urged this week in a letter to Congress.
The conservatives meeting this week to talk Medicaid changes said they want far more than just to cut spending, although they believe their approach will require less money than the open-ended fee-for-service approach. Other changes needed include improved care coordination and provider accountability, said Douglas Holtz-Eakin, president of AAF at the event. He acknowledged that the Patient Protection and Affordable Care Act (ironically, since he opposed it) contains such provisions. But, he argued, the use of such needed approaches in Medicaid will be limited by that law's lack of flexibility for state variation and the financial incentive of states retaining any savings they derive.
Describing such Medicaid changes may not roll off the tongue like “balancing the budget on the backs of the poor,” as Democrats have said of the Republican plans, but they are certainly more substantive.
You can now follow Rich Daly on Twitter @mhrdaly.
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