Joseph Smith
Pols. 335
10-18-2013

There are numerous debates over the new Affordable Care Act; more commonly known as Obamacare. The expansion of Medicaid is a debate within the legislation that should have more attention brought to it. First off, the expansion is an increase in those who are eligible for Medicaid and is optional for the states. On the surface it seems like a wonderful provision within the ACA and it is important to note that from a financial standpoint it is in the states’ best interest to take part in this expansion because the federal government is going to cover all expansion costs for the first 5 years and subsequently decrease it afterwards—but only by a nominal margin. However, a problem comes with this expansion when you take a closer look; a newly saturated beneficiary pool with the same or decreasing number of primary care physicians that will accept them. This is going to spell disaster for all Medicaid beneficiaries and the states that partake in this expansion. This expansion should be cut from Obamacare all together and have the funds reallocated in two ways: 1. increase the number of primary care physicians by subsidizing their degrees (i.e. similar to Medicare) and 2. create federal mandated minimums that states must pay doctors who accept Medicaid.
Medicaid currently accounts for an average of 24% of state budgetary spending. This is partially due in part to Medicaid beneficiaries going to the emergency room for minor health issues that could better be served by a primary care physician. Individuals are doing this because there is a lack of primary care physicians that will accept Medicaid. Take for example California and its MediCal program; only 54% of doctors in California accept MediCal at all and half of that are accepting new patients. California and many other states pay doctors only 30 to 40 percent of what they would normally receive for a given service. This has forced fewer and fewer doctors to accept Medicaid. In his writings on Medicaid, Barr writes “making primary care more available to Medicaid recipients will help to decrease the use of emergency rooms and will lower the overall cost of care.” Making more primary care physicians available should be the focus of the already allocated funds instead of covering an expansion of those covered under Medicaid. The funds should instead be used to help subsidize medical school and residency for those who want to become primary care physicians rather than specialists. This will help increase the amount of students wanting to be primary care physicians and ease the burden of having more people insured overall. If the government helps pay for the education of these individuals the overall cost of their education will drop drastically. It can be assumed they would then be less likely to charge such high prices to be seen and as a result, overall healthcare costs would also begin to fall. The other government funded healthcare program (Medicare) has been doing this very thing since 1983—Medicare started using its Part A funds in 1983 to pay for graduate medical education (GME). This significantly helped Medicare by increasing the availability of residency positions at hospitals and states can do the same thing by using the funds that were allocated for the expansion of Medicaid; and from the increase of revenue from a now larger tax base (courtesy of the individual mandate). Increasing the amount of primary care physicians takes care of one part of the problem but the reason they are deterred to accept Medicaid from the start needs to be addressed. Due to the minimal payments doctors receive, they will continue to be unwilling to accept Medicaid beneficiaries and increasing the number of primary care physicians would then become pointless. One of the issues behind paying doctors so little starts with how Medicaid is set up; it is administered by the states rather than the federal government (as Medicare is), and this results in wide spread variance of service payments to physicians. Most of Medicaid has switched to managed care plans (HMO’s) in order to help combat exploding costs for states. It cannot be denied that this helps to reduce costs for states because they can merely pay the HMO provider a set amount of money per year and push the burden of being cost efficient onto them. But does it translate to sufficient service for beneficiaries? Even though it translates to lower costs for states, it also contributes to the low payments to doctors because managed care providers are forced to pay less and less to keep their costs down. In order to better serve the beneficiary, their needs to be federally mandated minimums in regards to how much a physician gets paid for their time/service. Let it be heard, this does not mean a switch back to fee for service and that “serving the beneficiary better” means to give them proper availability to primary care service. The market has proved managed care providers can help to save money but it is obvious (by the lack of doctors who will accept Medicaid) that they are being kept on too short a leash to provide adequate payment to providers. Therefore, creating mandated minimums, across the boards, there will be no variance and adequate payments to doctors. Healthcare costs are rising across the country; there are no two ways about it. Expanding eligibility for Medicaid is only going to add to this cost. There will be the initial costs of covering the expansion and then the costs of maintaining it while not addressing any issue of rising costs. Rather than expanding Medicaid, the funds should be used to increase the number of primary care providers by subsidizing their schooling and by creating minimum mandated payments to doctors. Both of these solutions will help curb rising costs of healthcare services while making the system more efficient at the same time; this country and the Affordable Care Act would be better off this way.

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[ 1 ]. Lecture, October, 2013
[ 2 ]. Lecture, October, 2013
[ 3 ]. PowerPoint, Slide 32, 2013
[ 4 ]. Donald A. Barr, Introduction to U.S. Health Policy: The Organization, Financing, and Delivery of Health Care In America (Baltimore: The Johns Hopkins University Press, 2011), 174
[ 5 ]. Barr, Introduction to U.S. Health Policy, 161-162
[ 6 ]. Barr, Introduction to U.S. Health Policy, 174-176