Entitlement reform is going to be high on the agenda for Congress and the President in 2013. The budget agreement and its resulting sequester will force the debate, one buttressed by long-term fiscal math that just does not work out without entitlements added to the equation. While much of the discussion recently has focused on Medicare reform, Medicaid reform has received less attention. Yet for many oncologists and the patients we treat, Medicaid reform will have a profound effect on doctors and patients alike. It is critical that we as oncologists pay close attention to the discussion and that ASCO remain at the table with a strong, clear voice. What follows is some background on Medicaid policy and possibilities for its reform.
Medicaid, unlike Medicare, is a shared fiscal program between the federal government and the states. In 2011, the Feds spent about $250 billion and the states about $140 billion (roughly a 65%/35% split); the $140 billion price tag for the states is what creates such urgency among governors and other elected officials. The federal government, for better or for worse, has a pretty easy time borrowing money right now if it is short. The states are much more constrained, and Medicaid is the line item that keeps them up at night.
Before talking about reform, it is important to understand whom Medicaid serves and how much it spends on them.
- About 55 million people are on Medicaid
- Of these, 27 million are children (50% of population/20% of dollars)
- 10 million are blind or disabled (45% of the dollars)
- 5 million are elderly (20% of dollars)
- 13 million are other adults (15% of dollars)
For the poor elderly, the money primarily goes for nursing home care and helps pay their Medicare part B premiums, co-pays, and outpatient drug coverage.
The Affordable Care Act called for expansion of Medicaid to cover an additional 15 to 20 million people (the main way it covers the uninsured) and would fully subsidize this for the states in 2014-2019 with reduced subsidies thereafter. Originally, this was essentially a required expansion, but based on the Supreme Court ruling in June, it is now purely voluntary for the states. We should all have a strong interest in what our individual states choose to do with this choice.
As health care providers, many of us have strong feelings about the Medicaid program. Its reimbursements rarely cover costs and for many states, the reimbursement time-lag borders on the absurd. At the same time, a growing body of literature shows it saves lives and improves self-reported health. (For more on this, check out an excellent analysis recently published in the NEJM (Sommers BD, et. al., Mortality and Access to Care among Adults after State Medicaid Expansions, July 25, 2012). Its impact on cancer outcomes, though, is less clear with existing analyses confounded by the number of uninsured individuals who become Medicaid recipients because of their cancer diagnosis. Regardless, I don’t think I am going out on a limb by fairly summing up the research to show that being insured (even with Medicaid) is better than being uninsured all else being equal.
So where does this leave us? We have a program that is doing some degree of good and probably saving quite a few lives but is disliked by many health care providers and their financial administrators and is threatening to bankrupt the states and put the federal government further in debt. Below I have laid out four potential solutions and encourage readers to comment on these and other solutions I am sure I have overlooked.
- Leave it how it is and just figure out how to pay for it.
- Increase spending on it by requiring reimbursement rates to at least equal Medicare reimbursements and figure out how to pay for it.
- Turn it into a Block Grant—(fixed sum of money in a baseline year, which grows at some pre-specified rate) and send to the states and let them manage it how they choose.
- Get rid of it and have the non-elderly individuals get fully subsidized private insurance through the health exchanges being set up under the Affordable Care Act. Nursing home care would continue to be provided in a separate program.
My rank order preference is: 4, 2, 3, 1, with the caveat that number 3 requires some very careful crafting about the rules for spending the money and how the growth rate is set. From a political reality standpoint, assuming divided government in 2013, number 3 actually offers the most realistic opportunity for compromise. But that is the subject for another blog.
Regardless of our personal views on this subject, what we cannot do as oncologists and as an oncologic Society is ignore the debate. These are our current and future patients, and to ignore the debate is to turn a blind eye on them.