BACKERS of Obamacare cheered New Jersey Gov. Chris Christie's embrace of Medicaid expansion in that state, making him one of several GOP governors to recently endorse that move. But the bigger news may have come from California, where The New York Times reports the Obama administration has endorsed cutting Medicaid payments to doctors to control costs.
In a brief filed with the U.S. Court of Appeals for the Ninth Circuit, federal officials urged judges to uphold California's decision to cut Medicaid provider payments by 10 percent. California's providers argue that the rates are already too low. Dr. Paul R. Phinney, president of the California Medical Association, says two-thirds of California doctors can't afford to participate in Medicaid. He predicts the problem will get worse with new cuts.
On the other hand, the Obama administration's filing calls it “entirely appropriate” for states to consider provider cuts and argues routine rate reviews are necessary “to avoid the perpetuation of payment rates that are unnecessarily high.”
“There is no general mandate under Medicaid to reimburse providers for all or substantially all of their costs,” the administration's filing stated. Federal law requires Medicaid rates to be sufficient to provide health care access comparable to that enjoyed by the general population. However, “sufficient” is in the eye of the beholder, as California's medical community is learning.
Oklahoma's Medicaid provider payments have typically been better than those in some states, but that's partly due to Oklahoma's program enrollment being more restricted than other states. Inflating Medicaid rolls would likely create the same financial pressures seen elsewhere. The easiest path to cost reduction is for policymakers to slash doctor payments.
Given that Oklahoma already ranks 49th in primary health care physicians per 100,000 citizens, this could create a significant barrier to health care access.
Yet Obamacare backers continue to tout Medicaid expansion, arguing the outsized federal match provided states amounts to “free” money.
The Oklahoma Policy Institute says Medicaid expansion “would have a very modest fiscal cost to the state and would bring in over twelve new federal dollars for every additional dollar of state spending.” However, since Oklahomans pay both state and federal tax, they're not netting $11 by expanding Medicaid; they're getting two separate invoices for a combined $13.
In comparison, Jonathan Small, fiscal policy director for the Oklahoma Council of Public Affairs, notes a review of the most recent state Comprehensive Annual Financial Report shows Medicaid spending in Oklahoma continues to rise and is now 28.79 percent of total state spending, compared with 23.45 percent in fiscal year 2005. Small notes that Medicaid now “exceeds state spending on both common education and higher education.” Further expanding the program would exponentially increase the state's financial challenges.
Oklahoma hospital officials are among those urging Gov. Mary Fallin to reverse course and embrace Medicaid expansion. They argue expansion is necessary to offset the losses they face due to federal cuts in Medicare payments and reductions in federal “disproportionate share” payments to hospitals serving the uninsured. Both cuts, by the way, are the result of Obamacare's passage.
But the federal government's failure to fund one set of programs shows the folly of increasing providers' dependence on another federal program — especially when the federal government is simultaneously touting Medicaid provider-rate cuts as an important cost-control tool.