Beware of Medicaid Expansion Pitfalls

Les Masterson, for HealthLeaders Media , November 18, 2009

Medicaid beneficiaries don't have the powerful lobbying groups that other population segments enjoy and the general public is not as offended when programs for the poor are cut, though they are outraged when senior programs are sliced.

Maybe it's because most Americans expect they will grow old, but they don't think they'll ever need Medicaid.

If Medicaid expansion is a part of the final health reform plan, Congress will need to create long-term (if not permanent) additional funding to help states pay for the new Medicaid beneficiaries.

The House reform bill includes $23.5 billion in short-term assistance to help states cover Medicaid costs because of rising unemployment. Plus, states received a huge chunk of the federal stimulus money this year to help with Medicaid funding. These are short-term fixes.

If Congress decides to extend Medicaid eligibility but not include long-range Medicaid funding, don't be surprised if states return to Medicaid cuts as a way to bridge budgetary gaps once the federal seed funding dries up. Also expect health insurers to question whether Medicaid is worth the money, and doctors and hospitals to start rethinking whether they can continue to lose money by accepting Medicaid beneficiaries.

Les Masterson is an editor for HealthLeaders Media.

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