House Rules: The Medicaid Two-Fer

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THE TREATMENT JANUARY 5, 2010

House Rules: The Medicaid Two-Fer

The final health care bill will inevitably look more like the version that passed the Senate than the one that passed the House. That's the political reality, unfortunate and frustrating as it is. But particularly on issues that haven't been the subject of intense debate and scrutiny, Senate members may be more amenable to adopting provisions in the House bill.

One such issue is the question of what Medicaid, the government program for poor people, pays primary care providers.  It's a subject I address in my latest Kaiser Health News column, which is now online here at TNR.COM, as well:

Medicaid pays primary care doctors, on average, 66 percent of what Medicare does, according to a 2009 Urban Institute study. (It’s an average because each state sets its own rates.) That’s particularly worrisome when you consider that Medicare itself pays less than private insurance.

This isn’t just a problem for doctors. It’s also a problem for patients, since doctors inevitably respond to the low Medicaid payments by seeing fewer Medicaid patients. The great irony of Medicaid is that while its beneficiaries have a more generous set of benefits than most people with private insurance, they often have a harder time taking advantage of them because fewer doctors will see them.

When lawmakers in the House sat down to write a health reform bill this year, they understood this--and decided to do something about it. Their bill decrees that Medicaid pay primary care doctors the same rates that Medicare will. Experts hailed the move, not only because it would help low-income Americans get access to care but also because it’d give an extra financial boost to primary care physicians, who desperately need it. 

The catch, as you may have guessed, is the price tag: The Congressional Budget Office says the House proposal will require $57 billion in additional spending over ten years. And Ben Nelson, among others, has made it clear he won't support the bill if it involves spending a lot of extra money to make sure more people have insurance.

Strictly speaking, though, the Medicaid money wouldn't be an expenditure for the sake of expanding coverage. It'd be an expenditure for the sake of strengthening existing coverage while making sure public programs don't underpay doctors. Maybe that's enough to convince Senate centrists it's worthwhile.

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posted in: the treatment, health care, ben nelson, medicare, senate

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