Medicaid

Forbes blogger Avik Roy commented during yesterday’s IPAB hearing that “studies show that health outcomes for many Medicaid patients are worse than those who have no insurance at all.” That assertion has been around for a while. Unfortunately for Roy, it’s been frequently refuted, with a new study out of Oregon containing further evidence that patients do, in fact, benefit from Medicaid coverage.

The National Bureau of Economic Research study, released earlier this month, details results from  a study of Oregon’s Medicaid program. Three years ago, the state discovered that it had additional funds for Medicaid and wanted to enroll more people. But there were more eligible recipients than there was money, so the state created a lottery to decide who could apply and who couldn't.   The study, conducted by researchers from Harvard, MIT and other institutions, is the only randomized experiment ever done on the effects of having insurance compared to no insurance.* It compared utilization, health outcomes and self-reported health status, and financial hardship due to medical expenses among people who won the eligibility lottery and those who did not.

One key result: The authors describe an “overwhelming sense from the survey outcomes that individuals feel better about their health.”

Individuals who won the lottery also used more medical services, had improved self-assessed physical and mental health, and reduced likelihood of medical debts being sent to a collections agency. While none of the results directly relate to mortality or other measures of actual health (because mortality among the adult population is extremely low, even without insurance), there is a clear benefit to Medicaid in terms of beneficiaries’ general well-being. (Future papers will present more data on traditional measures of health outcomes.)

So much for the claim that Medicaid makes people sicker.

*The RAND Health Insurance Experiment(the only other randomized trial looking at the effects of insurance) examined the effects of different amounts of insurance, using different cost-sharing arrangements, but did not include any participants with no insurance at all.

Number of the Day: 41%

Medicaid has been in the news a lot lately.  A new study was released yesterday showing the mental health and financial benefits experienced by recipients of Medicaid. Meanwhile, Medicaid continues to face big cuts in the ongoing debt ceiling talks.

With this in mind, we set out to take a quick look at the scope of Medicaid’s impact.  We discovered Medicaid covers more than four in ten births in the United States.  Surprised? We were, too.  It amounts to about 1.68 million births a year out of the over four million annual births nationwide.

The issue of patient safety is poised to take center stage in the discussion of health care system improvement. One week after the journal Health Affairs released a landmark study indicating adverse medical events are even more common than previously believed, the Centers for Medicare and Medicaid Services (CMS) have launched a multifaceted assault on the problem of medical errors in America. The issue is yet another vital piece of the cost and quality puzzle that the industry must resolve to combat the unchecked rise in national health expenditures.

Hot on the heels of Congressman Paul Ryan's new budget proposal, the Congressional Budget Office has released its review of the plan, and it's none too rosy. Their prediction? Higher health care costs for Medicare beneficiaries, and reduced access to Medicaid.

“Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system.” (See the full report here)

On Tuesday, Republicans in the House of Representatives released a new 2012 budget proposal. Optimistically titled the “Path to Prosperity,” this proposal has profound implications for the future of the American health care system. The brain child of Rep. Paul Ryan (R-WI), Chairman of the House Budget Committee, the plan cuts $5 trillion from projected future deficits, largely attributed to cuts in federal health care spending through a significant restructuring of the Medicare and Medicaid programs.

Rep. Ryan would make several significant changes to Medicare intended to dramatically reduce government spending on the program.  Instead of the current model of direct government reimbursement to providers, the proposal would largely privatize Medicare, providing premium support payments of up to $8,000 annually to beneficiaries, who would then purchase a private insurance plan. This “voucherization” of Medicare kicks in during 2022, meaning anyone presently under the age of 55 would no longer be eligible for traditional Medicare coverage.  Each year after 2022, the age of eligibility would increase by two months until it reaches 67 in the year 2033.

On Tuesday, April 5, the House Budget Committee issued a plan to reduce the growth of the federal deficit in the future by destroying Medicare and Medicaid in their present forms.  The plan is based on one published in November 2010 by Representative Paul Ryan (R-WI) and Alice Rivlin, former director of the Congressional Budget Office and the Office of Management and Budget.  In the Ryan-Rivlin plan, Medicare would be replaced by vouchers given to t

Six months ago, when I was researching an article on health reform implementation in the states, I had to choose three states to focus on -- red, blue, and broke (California). I also did a separate little story on Connecticut's path to a public option.

Red was Georgia -- we know health reform has an uphill battle there (although it's gotten more uphill since last spring).

California is turning out pretty much as I expected; Republican Schwarzenegger and the Democratic legislature have passed a framework for an exchange, Jerry Brown will replace Schwarzenegger, the legislature is still Democratic -- and the state is still broke but moving ahead in an admirably determined fashion.

One challenge in implementing the health reform law at the state level is that the cost of the Medicaid expansion to the states depends greatly on the success of efforts to enroll people in the program. Recently, I looked at the range of costs for California, and examined what is driving that expected growth:

The California Budget Project estimates that the cost of the expansion to California will be approximately $5 billion dollars over the next ten years. California has to pick up only a small share of the cost of those newly eligible for the program. But the state will continue to split evenly with the feds the cost of those people who were eligible before the law was passed but will be newly enrolled. This is likely to be a very large number of people. ... The California Budget Project estimates that there will be about 500,000 new enrollees in Medi-Cal who were eligible before the law was passed. This is a result, in part, of the law’s streamlining eligibility criteria and processes. The law also provides funds for significant outreach, in particular through the actions of the California Health Benefit Exchange, the new state agency that will be the portal to coverage.[An estimated 1.5 million newly eligible are likely to enroll in expanded Medicaid by 2019.]

Three reports released today by the Kaiser Commission on Medicaid and the Uninsured paint a picture of the States universally struggling to maintain the solvency of their Medicaid programs, while working to solve the problem through a diverse array of responses. According to one of the reports, Kaiser's 10th annual survey of state Medicaid officials in all 50 states, federal support for the Medicaid program during the recession played a huge role in keeping the health safety net intact.

The root of the problem nationally was higher than expected growth in Medicaid spending for fiscal year 2010. While predicting an average increase of 6.3 percent, the recession drove millions out of work and onto the Medicaid rolls, driving costs up an average of 8.8 percent.

There is no question that major changes will have to be made to the U.S. budget in coming years. Surpluses are never expected to return, the debt is projected to climb to unprecedented levels, and major programs are significantly underfunded, leaving participants uncertain about what benefits they will receive in the future.