Medicaid Malfunctions Multiply
September 16, 2016
Medicaid ruined long-term care, but that’s not the only damage
it’s done. Examples after
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MEDICAID MALFUNCTIONS MULTIPLY
Medicaid has had a devastating impact on long-term care services
and financing. By making
nursing home care virtually free for all in 1965, Medicaid (1) led to
decades of institutional bias, (2) crowded out a market for private home
care, (3) crippled private financing options like LTC insurance and home
equity conversion, and (4) created the caregiver shortages and access,
quality, reimbursement, and discrimination problems we face today.
Seems like that would be enough damage for one centrally planned
and managed government program to cause.
there’s much more to learn about Medicaid’s multiplying misadventures.
Cato’s Dan Mitchell says “Medicaid
is a Ticking Time Bomb.” He
delivers devastating evidence that Medicaid (1) is “the fastest-growing
entitlement program,” (2) grows faster than state revenues, (3) expands
“faster than the private sector,” (4) incentivizes over-spending with
a perverse federal funding scheme, (5) lures states into ObamaCare with
“free money” that turns out to be very expensive,
(6) hurts the poor with fewer doctors available and worse medical
outcomes, (7) enables “staggering amounts of fraud and theft,” (8)
enriches the “poverty pimps,” i.e.,
vast array of government employees, their union allies, contractors, and
third parties who earn six-, seven-, eight-, or nine-figure paydays taking
their cuts of money we think we’re spending on the poor,” and (9)
should be block-granted like welfare was in 1996 to stem the red ink and
to improve the program for the needy.
That must be
all that can be said about Medicaid’s problems, right?
But no, there’s more. The
Mercatus Center’s Brian Blase reports today that “Evidence
Is Mounting: The Affordable Care Act Has Worsened Medicaid’s Structural
Problems.” In a
nutshell, Blase says:
two years of the ACA’s [Affordable Care Act, i.e., ObamaCare’s]
Medicaid expansion demonstrate that government experts failed to account
for how states would respond to the incentives resulting from the elevated
federal reimbursement rate. Enrollment and spending are much higher than
expected, and this is especially noteworthy since states are adopting
the expansion more slowly than expected. Overall, the ACA expansion
significantly adds to Medicaid’s unsustainable spending trajectory,
likely fails to produce outcomes worth the corresponding cost, and creates
a large federal government bias toward nondisabled, working-age adults at
the expense of traditional Medicaid enrollees.
adds details on each of these problems:
has been higher than expected,” (2) “Total costs have been
higher than expected,” (3) “Individual enrollees have been more
expensive than projected,” and (4) “Medicaid expansion
enrollees receive inadequate value from the program.”
Blase also expands on Medicaid’s fundamental problems, explaining
how (1) “It crowded out other priorities,” (2) “It lacked
effective oversight,” (3)“It disincentivized work,” and
(4) “It resulted in lack of access” to care.
Obviously it’s high time to reform Medicaid radically. Remove its perverse incentives and target its scarce resources to the truly poor. But how? We’ve tackled that question with regard to long-term care in the Center’s forthcoming report “Long-Term Care Financing: The Myth and the Reality.” Other analysts, including the two cited in today’s LTC Bullet, have complementary proposals to offer. But time is running out. A fiscal vise is closing as an unprecedented monetary bubble expands and the age wave is finally about to crest and crash. This triple threat compels change either through responsible public policy or by default.