Medicaid would cover 15 million more people under health reform bills

Washington -- Both major health system reform bills under consideration by Congress would greatly expand Medicaid, with the federal government paying for nearly all of the cost. But the bills have a key difference for physicians.

The Affordable Health Care for America Act -- adopted by the House on Nov. 7 -- would increase Medicaid pay for primary care physicians to 100% of Medicare rates by 2012. The Senate bill unveiled Nov. 19, known as the Patient Protection and Affordable Care Act, has no such provision.

Expanding Medicaid alone is not the American Medical Association's preferred approach to covering lower-income Americans, said AMA President J. James Rohack, MD. AMA policy also supports allowing people to use federal funds to buy private insurance.

But Dr. Rohack said increasing Medicaid physician fees to Medicare levels "is a significant improvement for pediatricians, family physicians and internists." The AMA has conditionally supported the House reform bill, despite concerns with some of its provisions.

Lori Heim, MD, president of the American Academy of Family Physicians, said the Medicaid pay increase in the House bill is a key provision for attracting and retaining physicians. "In some states, that has been a real barrier to some patients being able to gain health care coverage."

Both bills would increase Medicaid eligibility. The House measure would extend the program to legal residents earning up to 150% of the federal poverty level, while the Senate bill would increase eligibility to 133% of poverty. The Congressional Budget Office estimates that both bills would cover roughly an additional 15 million people by 2019 at a cost of $374 billion for the Senate bill and $425 billion for the House measure.

Community health centers probably would see a majority of the new Medicaid enrollees, even if the House bill's physician pay raise were implemented, said Dan Hawkins, policy director for the National Assn. of Community Health Centers. The House bill's raise would not apply to the centers, he said.

His association supports expanding Medicaid partly because the program offers more generous benefits than do some private health plans. Hawkins said Medicaid covers transportation, translation services, and health and nutrition education, for example.

Dr. Heim said Medicaid is not a perfect program, but "it's going to be easier to increase the scope of an existing program."

But Hawkins and Dr. Heim questioned whether enough physicians and community health centers would be available to see millions of new Medicaid enrollees. The House bill would allow unused residency slots to be used for training primary care physicians, Dr. Heim said, but physician shortages loom larger than that. The Senate bill would create a commission to examine physician work force issues.

States would contribute

Both bills call for the federal government to pay almost all of the cost of the Medicaid expansion, which would begin in 2014. The Senate bill would cover 100% of the cost for the first three years, then about 90% on average thereafter. The House bill would pay the entire cost for two years, then 91% after.

But the Senate measure still would require states to pay up to $25 billion by 2019 to expand Medicaid, according to a Nov. 18 Congressional Budget Office estimate. The CBO did not provide a similar estimate for the House bill.

Shaun Adamec, a spokesman for Maryland Gov. Martin O'Malley, said states need to consider supporting the Medicaid expansion, despite the budget deficits many of them face. Maryland might be able to pay for its share of a Medicaid expansion if the proposal reduces uncompensated care and if the economy improves, Adamec said.

But the federal proposal has been rejected by some, such as Sen. Lamar Alexander (R, Tenn.), a former Tennessee governor. Congress shouldn't expect states, which are facing unprecedented budget shortfalls, to help expand Medicaid, he said. Republican governors have offered similar statements.

Texas Gov. Rick Perry opposes expanding Medicaid, according to Perry spokeswoman Katherine Cesinger. She said the Medicaid program and other government spending on health care is not sustainable. "States will continue paying their percentage of Medicaid match for an ever-growing population but will lose the ability to run their state Medicaid program in a way that best meets their residents' needs."

Cesinger said Perry is still seeking approval from the Centers for Medicare & Medicaid Services for a Medicaid waiver. The proposal would allow low-income families to use Medicaid funds to buy private health insurance, among other provisions. The state submitted the waiver in April 2008.

Perry is well-known for rejecting additional state spending on entitlement programs such as Medicaid, said John Holcomb, MD, chair of the Texas Medical Assn.'s Committee on Medicaid and the Uninsured.

"It's penny-wise and pound-foolish not to give kids health care, because that's the future of the state," Dr. Holcomb said.

Dr. Holcomb said TMA has been trying to get Medicaid pay in Texas increased to Medicare rates for several years. A successful lawsuit increased rates for children's care, but they remain at 65% of Medicare rates. Meanwhile, physician participation in the program has declined during Perry's administration. About two-thirds of Texas physicians saw Medicaid patients in 2002, but only 42% did in 2008, Dr. Holcomb said.