States uneasy about impact of Medicaid expansion

The expansion of insurance coverage under the health reform law is due largely to an expansion of the government-funded Medicaid program, which is causing some doctors to worry about the specifics of implementation, according to the New York Times. "Absorbing that many people into the system will not be easy. The program is administered and partly financed by the states, which are now racing to figure out how to carry out the necessary changes and simplify enrollment even as they struggle to cope with severe budget cuts and staff shortages."

Medicaid patients often have trouble finding a doctor and studies have shown that "Medicaid beneficiaries fare less well than patients with private insurance." However, it is an improvement over being uninsured. "Medicaid beneficiaries are more likely to have a usual source of care than people who have no insurance, according to a 2008 analysis by the Kaiser Commission on Medicaid and the Uninsured, which found that only 10 percent of Medicaid beneficiaries did not have a usual source of care, compared with more than half of the uninsured." Still, states will be left making sure that people who are newly insured will be able to access care, "just because you're going to get 16 million new people enrolled, that does not mean those 16 million will have easy access to all the care that they need," said Andy Hyman, senior program officer with the Robert Wood Johnson Foundation (Rabin, 4/26).

Stateline: The problem faced by most states is the same one that Massachusetts already faced after their health overhaul. Due to the increase in insured patients and the doctor shortage in the state, wait times for primary care appointments increased greatly after the law went into effect. Similar problems are expected nationally as the federal law is enacted. "Even before President Obama signed the health bill, there already was a shortage of primary care physicians, who usually are the first person a patient goes to for treatment. … A surge of as many as 32 million new patients — many of whom are poor and haven't seen a doctor in a long time — could make the scarcity even worse."

Since the federal law was based largely in part on the Massachusetts legislation, similar problems are expected. In addition to long wait times, an increased doctor shortage and budget problems when it comes to Medicare and Medicaid reimbursement increases are expected. "Massachusetts offers a cautionary tale about the pay hikes, as well. The state initially included Medicaid payment hikes in its health care overhaul, but those increases stopped after two years because of the state's budget problems" (Vock, 4/27). 

Congressional Quarterly: When it comes to state budgets, Medicaid and reimbursement rates, many states also are already facing that problem. A recent source of funding from the federal stimulus package to the states for Medicaid reimbursements is about to dry up, leaving the states on their own until the health care law's payments begin in 2014 unless Congress makes a move quickly. "So far, by the National Governors Association's count, 16 states have assumed in their budgets that Washington will deliver the extra funding — and states will face major budget holes if it does not. Other states are already cutting services or raising fees to avoid relying on the money." When the law does go into effect in 2014 some of the changes could lead to big savings for states, while others won't be as well off. "Depending on their current Medicaid coverage programs, some states will reap small windfalls, while others will see a decline in revenue, mainly because of a change to the way states are sold pharmaceuticals at a discount for their Medicaid patients."

Some states that already have expansive Medicaid programs will begin to receive federal funding, which will be a big help. "The option would benefit several states and Washington, D.C., that have made extending health care coverage a priority. Other states that do not have statewide programs but have county-provided coverage, such as California, are investigating whether they would qualify for federal funding, perhaps through a waiver from federal law" (Adams, 4/26).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.