Medicaid Costs Skyrocket : Reform A Must

The Medicaid problem is just one more mess that the Democrats refuse to address, and with good reason, they see this as just another way to keep more people close to the hand that feeds them. The fact that there isn't anymore money to give them means nothing. All the liberal Democrats have to do is lie to those that are dependent, telling them more is on the way just to get their vote one more time.

When the whole system collapses, the liberal Democrats will cry they did everything they could but to fix the system, but the Republicans didn't care enough to do anything to help fix the problem other than to cut off the funds to those that need them the most.

As the saying goes, if you tell a lie loud enough and long enough it will become truth. Will this be the case for Medicaid? Only time will tell if the public is wise to the liberal management of the information.

Medicaid in Crisis
Source: Brian Blase, "Solving the National Medicaid Crisis," Heritage Foundation, May 6, 2011.

Unsustainable spending growth, enormous crowd out of private coverage, perverse incentives that discourage work and financial planning, and cost control mechanisms like low provider payment rates that limit access for enrollees and contribute to a low quality of care have left Medicaid in crisis, says Brian Blase, a policy analyst at the Heritage Foundation.

Between 1990 and 2010, national Medicaid spending increased from $72 billion to over $400 billion. Federal spending alone has increased from $40 billion in 1990 to an estimated $271 billion in 2010.

At the state level, Medicaid spending has increased four times faster than elementary and secondary education spending, five times faster than higher education spending, and nine times faster than transportation spending over the past two decades.

Several states reimburse Medicaid providers at extremely low rates, some lower than one-third of commercial rates. Medicaid also requires an enormous amount of paperwork with lag times for payment twice as long as those for Medicare or commercial insurance. Moreover, the denial rate for Medicaid claims is three times that of Medicare and commercial insurance.

As a result, only about half of all physicians accept new Medicaid patients.

Washington can no longer afford to kick the can down the road on serious Medicaid reform. Its unsustainable spending, inferior access to quality care, massive crowd out of private coverage, and perverse incentives that discourage work and financial planning all underscore the need for fundamental Medicaid reform, says Blase.