Medicaid safety net: Strong enough to hold?

Many state Medicaid programs provide better preventive care access for kids than private insurance. Would any future federal expansions change that?

By Doug Trapp — Posted Feb. 1, 2010

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Medicaid doesn't have the best reputation for accessible, high-quality coverage, at least according to Sen. Lamar Alexander (R, Tenn.).

Alexander, speaking on the Senate floor late in 2009, sharply criticized the proposed Medicaid eligibility expansion in the health reform bills adopted by both houses. It would provide Medicaid and Children's Health Insurance Program coverage to an additional 15 million people over the next decade.

Alexander called Democrats arrogant for proposing to put so many people "into a medical ghetto called Medicaid that none of us or any of our families would ever want to be a part of." Other conservative lawmakers and policy analysts have also referred to Medicaid as a health care "ghetto."

But how accurate is that assessment? Does Medicaid provide less effective coverage than private insurance?

Not always, at least when it comes to kids, according to the 2007 National Survey of Children's Health. Based on nearly 92,000 interviews, it found that in 36 states, children in Medicaid and CHIP were as likely or more likely than privately insured kids to have had at least one preventive health care visit over a 12-month period.

"That's what I would expect," said Jay E. Berkelhamer, MD, past president of the American Academy of Pediatrics. Medicaid's advantage lies in the fact that the federal government requires it to cover a standardized package of preventive care benefits for children called the Early Periodic Screening, Diagnosis, and Treatment program. It includes immunizations and dental, vision and hearing screenings. By contrast, private insurance coverage for children is "all over the map," Dr. Berkelhamer said.

But regardless of how strong it is now, some lawmakers and governors have said the public safety net would stretch too thin if the program were expanded to cover millions more people, because states can't afford it. And counting on states to help foot the bill would force them to cut other spending, such as for education, Sen. Orrin Hatch (R, Utah) said late last year. "The last thing we need right now is for Washington to impose more liability on the states."

The Jan. 19 victory by Republican Scott Brown in a special election for the Massachusetts Senate seat held by the late Democratic Sen. Edward Kennedy may derail the attempt to enact health system reform legislation. So Medicaid expansion is not a sure thing. Still, congressional Democrats and the White House say they remain committed to passing some form of health overhaul this year.

Medicaid does have its shortcomings. The 2007 survey found, for instance, that kids in Medicaid and CHIP are less likely than privately insured children to have medical homes -- as defined by the AAP -- and access to specialists.

But the statistics might be less grim when considering the particular problems often faced by children in Medicaid and CHIP, said Julia Paradise, MSPH, associate director at the Kaiser Commission on Medicaid and the Uninsured. The survey results were not adjusted for income, meaning they don't account for lower-income families' additional barriers to getting care, such as a lack of reliable transportation.

Medicaid enrollees do enjoy some advantages. They generally face small or no co-pays for office visits and medication, said Jocelyn Guyer, co-executive director of the Georgetown Center for Children and Families at the Georgetown University's Health Policy Institute.

The physician payment effect

State Medicaid programs vary widely when it comes to eligibility, enrollment and billing procedures. But in many states, the blame for Medicaid access problems is based on the program's relatively low pay, doctors and health policy analysts said.

Medicaid pay for all services averaged 72% of Medicare rates in 2008, according to an Urban Institute study in the April 2009 Health Affairs. For primary care, that figure was 66%. These rates aren't nearly enough to cover physicians' costs, said AAP President Judith S. Palfrey, MD. "Pediatricians and other health care providers need to be focused on treating and caring for our children, not worried about how to pay their bills."

The AAP and more than 100 other organizations pressed Congress during the health system reform debate to include a Medicaid primary care pay increase along with any proposed program expansions. Without that, Dr. Berkelhamer said, "you are giving people access to an insurance card, but the insurance card may not provide them access to the system they need."

The American Medical Association supports expanding Medicaid eligibility, AMA President J. James Rohack, MD, said in a Jan. 15 statement, but the Association says Medicaid pay should be increased to equal Medicare rates.

A newly appointed permanent group -- the Medicaid and CHIP Payment and Access Commission -- will examine the relationship between public program pay and the availability and quality of care in Medicaid and CHIP. The panel was created by a provision in the Children's Health Insurance Program Reauthorization Act, signed into law in February 2009.

A work force to match

Access to care also depends on the supply of physicians. If states have shortages in doctors, increasing Medicaid pay alone without expanding the work force may not be enough to improve access for Medicaid enrollees, the Kaiser Commission's Paradise said.

The U.S. is behind schedule in training health professionals, said Ann C. Kohler, director of the National Assn. of State Medicaid Directors. "We should have started about four years ago, training more. We're going to have to do a better job of using physician extenders, like nurse practitioners."

Still, people's perception of the cause of access problems can vary by coverage type, said Genevieve Kenney, a senior fellow at the Urban Institute. Studies indicate that families with publicly insured children and little access to specialists tend to blame physician shortages. But families with private insurance tend to cite financial barriers, Kenney said.

While Medicaid managed care may help coordinate care, it can have a down side. Georgia's 2006 introduction of three managed care plans means doctors must follow multiple sets of rules for treatments, formularies, prior authorizations and billing, said Kathryn Cheek, MD, vice president of Georgia's AAP chapter. Some doctors have opted out of Medicaid altogether amid rising enrollment, reducing patient access, she said.

The adequacy of care provided to millions of new Medicaid enrollees under any future federal expansion might vary widely by state. Many benefits that states must cover for children are optional for adults, and states have substantial discretion over the amount, duration and scope of required services. Adults' Medicaid benefits also vary widely among states, Paradise said.

Some governors, such as Texas Gov. Rick Perry, said they would not welcome a Medicaid expansion to a minimum federal poverty level for all citizens. Perry, who says Medicaid is unsustainable, said enrollees instead should be allowed to use Medicaid funds to buy private insurance. Others, such as California Gov. Arnold Schwarzenegger, demanded that the federal government pay for a permanently larger overall share of Medicaid.

Dennis Smith, who ran Medicaid in the Bush administration, wondered why reform proponents didn't look to integrate the Medicaid population with everyone else. "We have this opportunity to change the system. Why aren't we changing it for everybody?"

Some physicians, governors and state lawmakers worry about how much money Congress would put into Medicaid. "We don't necessarily have enough to pay for [enrollees] we have," said Gregory Tarasidis, MD, president-elect of the South Carolina Medical Assn.

If more traditional sources of care are not available, new Medicaid enrollees could seek care at federally qualified health centers, which are paid based on a federal formula that weighs health centers' costs. Children in Medicaid and CHIP already rely heavily on those facilities, Paradise said.

And Guyer said health care access with restrictions still would be better than practically no reliable access at all for a population that is largely uninsured. "It will be potentially a lifesaver for many, many people."

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Access to preventive care

Children enrolled in Medicaid and the Children's Health Insurance Program in 2007 were less likely than privately insured kids to have a medical home or access to specialists or mental health care. When it came to accessing preventive care, however, publicly insured children did slightly better than those with private coverage.

Source: Child and Adolescent Health Measurement Initiative, 2007 National Survey of Children's Health, Data Resource Center for Child and Adolescent Health (link)

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