The Silly Appeal of Expanding Medicaid for All

DocsMeanMany people believe Obamacare was a conspiracy, with asinine design features intended to cause the program to fail. The primary goal in the minds of conspiracy buffs’ was to usher in a single-payer program of Medicare for All once Obamacare collapsed under adverse selection. The theory goes something like this: with nowhere to turn except the government, Americans would finally throw up their hands and acquiesce to government intervention. Seniors purportedly all love their Medicare, so why not expand the program to cover even more people?

Over the years I’ve derisively referred to simpleton ideas to expand Medicare to cover the entire U.S. population as Medicaid-for-All. My point was to point out that the program the elderly have come to rely on is not the same program we would have if it were expanded to cover the entire population. Little did I know I was being prophetic? There are now calls to expand Medicaid as a safety net program to everyone who cannot afford private health insurance, by allowing them to buy into the programs for the poor. Nevada’s legislature even passed a bill to allow all state residents to buy into the program.

There are other reasons Medicaid for All appeals to some left of center policy wonks. Expanding Medicare would upset seniors, whose benefits would be worth less if they have to compete with 100 million more people in the program. In addition, Medicaid pays lower provider fees than Medicare – in some cases substantially lower. On average, Medicaid only reimburses doctors $0.66 cents for every dollar that Medicare pays them. Private insurers pay doctors about double what Medicaid pays them.

The paltry provider fees are even worse in some states depending on the specialty. Rhode Island reimburses primary care physicians at only one-third of the fees that Medicare pays. California only pays primary care physicians $0.42 cents for every dollar Medicare pays. This makes it sound far cheaper to expand Medicaid than Medicare.

On paper Medicaid is a very generous health plan. It has no deductibles, little (if any) copays. Depending on whether you are in managed care or traditional Medicaid, its network is any doctor who will accept it. The reality is far different, however. Medicaid enrollees face longer waits for services than those with private coverage. Once seen by a doctor, Medicaid enrollees are often run through the appointment like cattle through a corral.

Nearly one-third of doctors refuse to accept new Medicaid patients. Of those that do, most quietly accept only a few of those who inquire about an appointment. Doctors like to keep patients in their practices at a ratio of privately insured to government insured. Medicaid enrollees are the least desirable of the government insured patients. Even when a doctor has accepted a Medicaid enrollee in to the practice, appointment slots available to Medicaid enrollees may be rationed or limited.

Medicaid patients often turn to emergency rooms for primary care because available appointment slots may be weeks in the future. Studies have looked at patient acceptance by source of payment, with researchers pretending to be Medicaid patients called doctors seeking an appointment. It turns out uninsured individuals agreeing to pay cash have an easier time securing appointments than patients on Medicaid. Privately insured have the easiest time scheduling office visits.

If Medicaid eligibility was expanded to everyone willing to buy into the program, those retaining private coverage through their employers would be doctors’ and clinics’ preferred customers. Those with private coverage would find their access to preferred doctors far superior to Medicaid enrollees.

Increasingly, doctors are already breaking away from network arrangements and refusing to accept Medicaid or Medicare. More and more physicians are restructuring their practices as direct primary care. Direct primary care practices often charge monthly retainers fees in addition to service fees. Moreover, it is unlikely that new Medicaid enrollees would be allowed to buy preferred access to physicians by paying a retainer fee. So far, Medicare has allowed concierge practice arrangements but I imagine this will stop once too many seniors are priced out of being able to see a doctor.

As Bloomberg View columnist Megan McArdle points out, a public insurer like Medicaid or Medicare would become the insurer of last resort. Sick people would sign up in droves causing adverse selection. When premiums inevitably had to rise due to the influx of sick enrollees, Congress would be under pressure to keep premiums below actuarial expected costs.

Proposals to expand Medicaid to all are little more than feel-good gestures that purport to cover everybody without actually providing universal access to care. What does the future hold? It’s just a guess, but as Obamacare increasingly collapses on itself, there will be calls to expand Medicare to the near elderly. Maybe, those age 55 and above will be allowed to join by paying a fee. Medicaid will be expanded to allow individuals who are of modest income but not poor. As some point eligibility for both programs will probably converse. Those who can afford to do so will pay for private coverage that affords them access to doctors.

Comments (21)

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  1. Jimbino says:

    The solution is medical tourism. Cash gets you drugs without prescription, great dental care, cheap cataract surgery and colonoscopies, immediate appointments and much more in Mexico, Brazil, Argentina, Costa Rica and even in the Czech Republic.

    You can research the prices online. A colonoscopy in Rio de Janeiro goes for $270 on average, more for biopsy and patients over 70.
    cf. http://quantocustaum.com.br/colonoscopia-preco/ which lists the price at R$800.

  2. Bob Hertz says:

    I will agree with your assertions that Medicaid for all is fiscally unwise……..

    However, I would not use the word “silly”, because some communities might lose all carriers in the individual market and have no choice other than Medicaid for all.

    We are close to 30% of counties having only one carrier for next year. That number will spring up a lot if Medica drops out of the exchanges, then it will really explode if Anthem drops out of more states than Ohio. (which it did yesterday)

    Some states like MN have budget reserves, that they can use for reinsurance and other enticements to bring at least one carrier back online.

    Other states may do nothing. In that case, you cannot say that any public option is by definition “silly.”

  3. Ron Greiner says:

    Devon you write, “Americans would finally throw up their hands and acquiesce to government intervention.” Yes, the uncomplicated people think this was Obamacare’s goal. The goal of Obamacare was to make Individual Medical (IM) insurance very expensive so that employer-based insurance, Blue Cross MONOPOLIES, could raise their rates and deductibles without competition. Obamacare was a huge success in killing the Individual Market.

    Isn’t it odd that Medicaid won’t pay doctors but the Medical Mafia who owns the Medicaid insurance companies all become billionaires like the California Molina Brothers and Florida’s Mike Fernandez, the Rick Scott money man. Then these billionaires just buy politicians with Blue Cross and everybody is happy with giant slush funds except the taxpayers and citizens.

    We need to drain the swamp of all politicians who have given out government contracts for health insurance.

  4. Bart I says:

    There are other reasons Medicaid for All appeals to some left of center policy wonks. Expanding Medicare would upset seniors, whose benefits would be worth less if they have to compete with 100 million more people in the program.

    I guess the children for whom Medicaid was originally intended are not as vocal about having their benefits diluted.

    • Ron Greiner says:

      Bart, Medicaid is for Billionaires, get real. FREEDOM has established a beachhead on the shores of Tamp Bay. Much like Operation Overlord and the Invasion of Normandy, after we establish a beachhead, we can’t be stopped. Now it’s just a matter of TIME. The NAZI High Command knew the limitations of propaganda. The Minister of Propaganda Joseph Goebbels whined, “The problem with propaganda is that people instinctively know the truth when it comes strolling along.”

      Today we say, the TRUTH is like Katrina, it blows the lies away!

      Politicians are like the Mafia passing out their government contracts turning ordinary con men, like the people you went to high school with, into Medicaid and Medicare billionaires.

      Miami Medicaid billionaire Mike Fernandez thinking he should be Governor of The Sunshine State and Medicare fraud man billionaire Rick Scott should be Florida’s junior U.S. Senator. Remember Republicans, Mike Fernandez gave millions to Hillary. Mike Fernandez voted for Hillary. Mike Fernandez took out ads against President Trump and called him a “scorpion”.

      https://www.donaldtrumphsa.com/2017/06/08/make-mine-a-hurricane-before-i-go-insane/

      President Trump – Drain the swamp!

  5. Ron Greiner says:

    Blue Cross has National power plus the local stuff too.

    Kaiser reports: “People who pay their own way are the ones getting hit hardest, said insurance industry consultant Robert Laszewski. “There is a horrific death spiral going on with the [non-subsidized] part of the market right now,” he said, because rate hikes are limited for those getting help from the government, but not for those paying the full premiums.

    Boards of Blue Cross Blue Shield plans and other nonprofits, he said, tend to be made up of representatives of “labor, the local hospitals, big employers. … They have community connections. So it’s going to take a lot to drive them off.”

    Soon Blue Cross CEOs will cry, “Nobody is going to pay us $1,000 a month at their job to add the family on if President Trump is paying 100% of their low-cost medically underwritten IM insurance PLUS loading up their HSA VISA cards with thousands of dollars annually, all tax FREE. This isn’t fair to us Fascists. Resist TrumpCare if you can.”

    NCPA Question: When TrumpCare sucks the healthy out of the existing employer-pools, who does that leave for Blue Cross to insure?

    http://www.healthleadersmedia.com/health-plans/if-insurance-market-crashes-can-lawmakers-put-pieces-back-together?page=0%2C1#

    Sell your Anthem stock today. Avoid those Anthem BLUES.

  6. Ron Greiner says:

    Devon, you write, “Rhode Island reimburses primary care physicians at only one-third of the fees that Medicare pays. California only pays primary care physicians $0.42 cents for every dollar Medicare pays.”

    We need sunshine and transparency. Us taxpayers should know how much we spend on Medicaid, per person, per state. We need to know how much we are being scammed into paying for Hillary’s KidPloy, per kid, per state.

    In Florida KidPloy charges “full Pay” to parents and charges $205 a month with $6,700 out-of-pocket per kid annually. This has no dental. So how much are taxpayers spending for the ZERO deductible with dental? It has to be a fortune. What, $1,000 a month?

    Why can’t we get all of these numbers?

  7. Ron Greiner says:

    Martin Armstrong: Nero himself blamed the Christians for the fire, and had many arrested and executed beginning the Christian persecutions when he was not executing them for their religion at that time. He just needed a scapegoat. The real source of the stories against Nero are identical in human nature to those spun by career politicians and mainstream media against Trump today. Today, Trump is accused of discriminating against Muslims when it is the same six countries Obama had classified as terrorist nations. The press bashes Trump claiming he has not feelings for 20 million people on Obamacare. The same issue today of reforming the corruption in the Senate, was the central issue for Nero as well.

    Seneca the Younger (c. 4 BC – AD 65), was a Roman Stoic philosopher and statesman. He was a tutor and later advisor to Emperor Nero. Seneca had a hand in financial reform to improve the financial administration of the Empire. Governors were actually being prosecuted for extortion rather than the modern version of too-big-to-jail.

    There is clearly the same plot to overthrow Trump from the Deep State supported by CNN, Washington Post, and the New York Times, which have shown to the world their moral corruption. History repeats because human nature never changes. We have all the elites on Capitol Hill plotting to get rid of Trump and to justify some sort of impeachment trial. Surely, neither Trump nor those who conspire against him on Capitol Hill and in the media will commit suicide. Nevertheless, they are fighting tooth and nail for the very same issue – to maintain the corruption behind the curtain. Trump cannot be bought as was the case with Nero. How do you bribe someone who needs nothing? So the conspirators are creating fake news to justify their actions today as they did back then.

    Trump plays the fiddle as Obamacare burns!

    https://www.armstrongeconomics.com/international-news/politics/what-does-trump-have-in-common-with-emperor-nero-fake-news-the-deep-state/

  8. Ron Greiner says:

    President Trump Alert: CINCINNATI — In his riverfront speech and in remarks earlier at the airport, the President also shopped for support for the House-passed replacement for Obamacare, which he denounced as “one of the biggest broken promises in the history of American politics.”

    It’s got to change, folks. It’s wrong,” the Republican said to an invitation-only crowd of about 300 that included three of his cabinet secretaries and labor leaders.

    “It’s TIME to rebuild our country to bring back our jobs and restore our dreams and it’s TIME, finally, to put America first and that’s what I’ve been doing if you haven’t noticed.” he said to applause.

    Trump also used his appearance to shop for support for the House-passed health care insurance changes.

    He met with two small business owners, labeled as “Obamacare victims,” aboard Air Force One, referencing the withdrawal of insurer Anthem from the state’s health care exchange as a “mess” since the company was the sole exchange option in 18 counties. Trump labeled Democrats as “obstructionists” and called on the GOP-controlled Senate to “save Americans from this catastrophic event.”

    The president is talking up health care as the Senate is balking at many components of the bill passed by their colleagues in the House. Some senators are concerned it eventually will cost 23 million Americans their coverage, per nonpartisan Congressional Budget Office estimates, and end spending on the Medicaid expansion for the poor, including 715,000 in Ohio, by 2020.

    Trump spoke briefly in Cincinnati with the families of Raya Whalen, a co-owner of PlayCare in Troy, Ohio, which sells playground equipment, and a small businessman from Kentucky.

    “Our experience with Obamacare has been a pretty negative one, from having to change our doctors to losing employees because we could no longer afford insurance,” she said. The company’s premiums on insurance it once offered employees increased 600 percent, she said.

    Whalen said she also was crushed when the obstetrician who had delivered nine nieces and nephews would not accept their Obamacare exchange policy for her first child. “Obama’s promise if you like your doctor, you could keep your doctor was a blatant lie.”

    Trump said, “Across America, premiums are skyrocketing, insurers are fleeing, and the American people are paying much more for much worse coverage. The coverage is horrendous. [[It’s horrendous.]]

    “The Democrats are destroying health care in this country. We have had no help. We will get no votes no matter what we do. If we gave you the greatest plan in the history of the world, you would have no Democratic vote. It’s all going to be Republicans or bust.”

    — I think we are going to get Democratic Senate votes for TrumpCare — TIME will tell.

    • Bob Hertz says:

      All good points, but I seen nothing in any actual Republican bills that will make any insurance company more welcoming to small family owned businesses.

      If all the underwriting rules of the ACA are kept in force under Trumpcare, which seems to be the case, the individual market will continue to be a treacherous and expensive place to be.

      In several states, it was possible over the last few years for mom and pop businesses to buy group insurance, even if it was a group of one or two. These families have largely weathered out the storm of the ACA.

      • Ron Greiner says:

        Bob, imagine my surprise yesterday informing the guy who is in charge of half the States for America’s oldest health insurance company that Anthem had left the OH market. He didn’t know!

        He told me it is a 90% go to extend STM with an idea that I came up with. He said we still need to pray but we should know next week. I told him, “WOW, Tom Price can kiss our A$$!”

        Get ready America, it’s TIME for FREEDOM! But, just in 44 States. We can’t get into NY, MA or NJ. But, we are in CT, MD, OR, DC and Maine.

        I’m going to make this guy CEO if he keeps listening to me.

  9. Ron Greiner says:

    Stupid-lazy-socialist college students today at Stanford.

    The Obamacare debate was not fair because it gave “legitimacy” to the idea of repealing Obamacare, Daily columnist Terence Zhao wrote.

    “But does that position really deserve half the stage? Does it really deserve any part of the stage?” Zhao said, citing the low public support for the Trump administration’s replacement bill, the American Health Care Act.

    Repealing Obamacare is “a position that is even more on the fringe and almost twice as unpopular as … overthrowing the democratically elected U.S. government via a military coup,” so it should not be “respected as a legitimate position we should hear out,” he wrote.

    THE TRUTH: There are single parent mothers from coast to coast paying $600 a month, at their jobs, for their lazy 25-year-old son’s health insurance with Obamacare. With TrumpCare’s age-based tax credits the government pays 100% of the son’s premium PLUS, deposits $500 in his tax-free HSA at the bank for medical, vision or dental expenses.

    The single parent mother can keep her $7,200 a year she is currently spending on her loser socialist son and redirect those hard earned dollars to her own tax-free HSA so she will be better prepared for 21st Century Medicare. If this loser socialist-son withdraws his HSA funds for Mud Shark beer he will owe a 10% IRS penalty. This is still cheaper than the 15.3% payroll tax the government skims off the son’s paycheck.

    https://www.thecollegefix.com/post/33313/

  10. Ron Greiner says:

    Spain’s Banco Santander is paying €1 to take over troubled rival Banco Popular, in a deal that illustrates Europe’s new system to rescue failing banks without burdening taxpayers or stressing markets. This is being cheered around the world because the shareholders lost absolutely everything. The bank which was valued in the collapse at €1.6 billion was bought for €1. Forbes wrote:

    “This is an excellent example of how the resolution of troubled banks should be done. The shareholders who employed the management which caused the problem lose all their money.”

    If government will not bailout banks, then eradicating all value to shareholders attaches a completely new kind of risk to shareholders. If they were investors in a manufacturing company that went bust, the assets would go into bankruptcy and there would be a realistic sale of assets. What has just taken place is that if the net asset value of the bank, its own building, property etc., were say even 20% of the share value, then the shareholder face a 100% loss in bank stocks compared to any other share investment. That leaves one poignant question? Why buy bank stocks at all?

    A new risk has just been created. Instead of a bailout loan to bridge liquidity problems as was the case with the original elastic money development of the Clearing House certificates during the 19th century, we now have no government support for which elastic money was invested and bank shareholder are subject to total usurpation of their assets and denied the normal property rights attributed to a free society. The “elastic money” is now central banks trying to “stimulate” the economy solely by means of purchasing government debt.

    Something is seriously wrong in the development. Shareholders rarely have full transparency in bank management to be able to make prudent and informed investment decisions. Welcome to the new crisis created by yet another solution.

    https://www.armstrongeconomics.com/world-news/banking-crisis/bank-stocks-have-a-completely-new-risk/

    Stocks are as fully valued as they’ve been at any other point in 70 years, limiting the likelihood of substantial and sustained further gains.

    A storm is coming…

  11. Ron Greiner says:

    Senate Majority Leader Mitch McConnell (R-Ky.) on Wednesday implemented “Rule 14” for the GOP’s Obamacare replacement bill. The rule allows the House-passed American Health Care Act to bypass committee discussion and go on the Senate calendar for a vote once a revised version is complete. Congress is set to go on recess July 4.

    The sweeping move went under the radar as attention in the Capitol was focused on fired FBI Director James Comey’s Thursday testimony to the Senate intelligence committee on his meetings with President Donald Trump.

    Democratic Sen. Brian Schatz alleged in a tweet “13 Republican men are meeting in secret to make a healthcare plan. Their plan is to do it so fast we can’t stop them. Stop them.”

    During a meeting Thursday in the finance committee, Sen. Claire McCaskill (D-Mo.) asked chairman Sen. Orrin Hatch (R-Utah) if there would be a hearing on the bill. Hatch replied he didn’t know if there would be another hearing but “we’ve invited you to participate and your ideas.”

    “We have no idea what’s being proposed,” McCaskill said in an emotional response.

    “We are now so far from regular order, the new members don’t even know what it looks like.”

    Democrats are playing dumb, we all know what is in TrumpCare. President Trump said, “If Congress doesn’t act to save Americans from this Democrat-inflicted catastrophe, next year is only going to get worse, a lot worse.”

    Rule 14 – let it rip.

  12. Ron Greiner says:

    President Trump said, ” Restoring freedom and opportunity also means repealing and replacing the disaster known as —

    AUDIENCE: Obamacare!

    THE PRESIDENT: That was easy. (Laughter.) Do you see how it’s failing? Okay. So I’ve been saying 116 percent for so long — it was Arizona. So yesterday, I have a new number — 204 percent, in Alaska, increase. It’s a catastrophe. Obamacare, as one of the big insurance companies had said, is in a spiral. It’s in a death spiral. It is dead. Dead. Some of the states are losing their insurance companies. Yesterday, Ohio lost one of the big ones. And Ohio has got problems now. They all have problems — Kentucky, Tennessee. Every place I go.

    But we’re dealing with obstructionists. The Democrats are obstructionists. You know what, it would be great to get along with them, but it seems to be impossible. They are obstructionists. And they have a healthcare plan that’s a disaster, called Obamacare. Again, the insurance companies are fleeing, the premiums are through the roof. The deductibles — I mean, unless you die a long, horrible, slow death, those deductibles are so high — sadly, folks, you’ll never get to use them. It is a disaster what’s going on with Obamacare. Nobody wants to talk about it. But you take a look at the premiums, how high; you take a look at those deductibles. You have nothing.

    And then, of course, the mandate. Let’s pay to get out of it, okay? We’re the only one — we pay to get out of not paying. That’s how bad it is.

    So Obamacare is dead. And don’t let them pin it on the Republicans, by the way. We’ve only been here for a short period of time, okay? But a good bill passed in the House. Something, I hope, great is going to come out through Mitch McConnell and the Senate. And we’re working very hard. I can tell you, we’re really working hard.

    And if we had the best plan in the history of the world, we wouldn’t get one Democrat vote. Just remember that. If we had a plan that gave you the greatest healthcare ever in history, you wouldn’t get one Democrat vote because they’re obstructionists. They’re bad, right now, for the country. They’ve gone so far left that I don’t know if they can ever come back.”

    Democrats are bad. They are never coming back. SAD!

  13. Bill Gamble says:

    Healthcare
    Bill Gamble
    I think there should be 5 options when you go for health care, none of which require you to buy healthcare, although they do require you to ultimately be responsible for your own care. Those options are:
    1. I’ve got the money and I’ll pay for it (then show proof).
    2. I’ve got insurance, here’s my card.
    3. I don’t have Insurance now but I can prove I had it X months ago. I will buy insurance, at today’s monthly cost for the entire interim since I last had it MINUS the proven out-of-pocket expenses for covered procedures during that time period, so issue me a card. The penalty for trying to skate by is the retroactive premium is at today’s price and for today’s risk level. Burden of proof is on the consumer. It will always be cheaper to buy it as you go. It is also an option to buy in retroactive while still in the low risk group if your financial situation improves.
    4. I am flat broke- please help me I’m begging. At this point the government says “yes but”, and determines your eligibility. If you are not actually broke, you just have too many toys or have spent it on the proverbial wine, women, and song, and have decided not to buy insurance, they send you back to 1 or 3 or on to 5.
    5. If you refuse the audit, or refuse the garnishment or property confiscation determined appropriate in #4, you walk away without treatment. If you don’t care, why should we?

    In every case, the government NEVER pays you or the providers, only an insurance premium. MediCaid goes away completely, as the rules above cover everyone under retirement age. MediCare follows the same rules, except everyone qualifies for the full premium assistance. Congress can debate the out-of-pocket expenses and whether to make that assistance needs based. Veterans are also covered under this plan, they just get assistance like Seniors, with the special help needed for service related problems available also.
    As far as regulating the plans and insurance companies, every company should be required to offer “the government plan” at an advertised price, needed so you can see exactly what you are buying. This plan would basically cover all necessary and catastrophic, but not any elective, and could include co-pays and a specified out-of-pocket max per person. There would be 3 allowed risk levels for this plan, with Congress negotiating a rate structure with a rigid ratio on the rates like 2-3-4 or 3-4-5. There would also be a limit of 33% of customers in either of the top 2 risk levels. This limits risk level bait and switch and forces all the companies compete like hell to get those low risk customers, as the rigid ratio on the premiums makes them valuable customers and any increase in network size or reduction in premium to entice them automatically benefits the 2 higher categories also. It also creates incentive for young, low risk people to buy insurance now, as waiting could throw you into a higher risk category and cost you retroactive premiums at a much higher rate. Another feature is that any plan offered by any insurance company to employees of any firm is open to individual people to buy in (at the full cost- employee cost plus company benefit cost). Essentially, that forces companies to create risk levels also, and makes their plans subject to the same low-medium-high tiers to protect themselves from astute health care plan shoppers, while effectively leveling the playing field for all people, not just those without work-subsidized coverage.
    The same concept should be applied to drugs. Drug companies should be required to sell every drug at the exact same price to anyone and everyone. No special pricing for big companies or insurance providers.
    The only way to beat this system is to die without using any health care. Lousy way to “win”, and great for society because even though you paid nothing into health care, you also took nothing out, so we really don’t care.

  14. Gwinnett Colleges & Institute says:

    We need capitalism in healthcare, competition will keep the cost of healthcare done. Unless government will keep costs low for all Americans.

    • Lee Benham says:

      We have plenty of capitalism in Health Care already. The problem is we have a Third party bill paying system with tax advantages that allows the Capitalism in Health care to go unchecked.

  15. Camille - ByrdAdatto Health Care Lawyers says:

    Great points. Care for “all” essentially means care for none. I am continually shocked at the forgetfulness of Obamacare proponents. (I am, of course, being sarcastic.) Health care is a product subject to supply and demand as well as the benefits inherent with marketplace competition. Why are we trying to treat it as something different?
    http://www.byrdadatto.com/contact/dallas/

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