Medicaid: The Program that Keeps on Taking
Medicaid is one of the largest expenses in Missouri’s budget. In fiscal year 2008, Medicaid spending in Missouri totaled more than $7.09 billion. The federal government pays for the lion’s share of that, but Missouri taxpayers were still on the hook for $2.66 billion, or just over 12.5 percent of the state’s total $21.2 billion budget. As Peter Suderman points out in a new article for Reason, Medicaid has gone from an initial inflation-adjusted price tag of $9 billion in 1965 to more than half a trillion dollars just 45 years later. Moreover, those costs are only likely to rise during the coming years:
Just yesterday, the Senate voted to put $16 billion toward extending a temporary boost in Medicaid funding contained in the stimulus; the House is expected to follow sometime next week. Meanwhile, the Obama administration’s signature achievement—the new health care law—relies on an expansion of Medicaid for fully half of its projected increase in insurance coverage. According to the Congressional Budget Office, thanks to the Patient Protection and Affordable Care Act (PPACA), 16 million new individuals are projected to enroll in Medicaid by the end of the decade, and many experts believe that those estimates are low.
To add injury to insult, the health care that people get through Medicaid appears to be pretty bad:
Numerous studies show that, on an array of specific maladies, Medicaid’s health outcomes are dismal—and in some cases worse or no better than the outcomes for individuals who lack health insurance entirely. A University of Pennsylvania study, for example, reported that colon cancer patients in Medicaid have a 2.8 percent mortality rate, compared with 2.2 percent for the uninsured. A study of Florida’s Medicaid patients found they were more likely to have late-stages of prostate cancer, breast cancer, and melanoma at diagnosis than the uninsured.
It’s also worth noting that poor Americans received medical care before the advent of Medicaid. In his history of 1960s liberalism, The Unraveling of America, Rice University historian Allen J. Matusow wrote that poor patients were typically treated by charitable doctors for free. Matusow concluded that “[a]side from middle-class old persons protected from the financial ravages of long illness, the clearest beneficiaries of Medicare-Medicaid were doctors, who, according to one estimate, enjoyed an average income gain of $3,900 in 1968 as a result of these programs.” I don’t know how the medical treatment that poor patients received before the passage of Medicaid compared to that received by the middle class, but it’s historically inaccurate to argue that the poor would not have health care absent a government program.
Still, given that Medicaid is unlikely to be repealed anytime soon, what is the best solution to its spiraling costs and poor service? Suderman argues that it should become a temporary safety net instead of a permanent entitlement. Unfortunately, most politicians seem determined to keep expanding the program. If continued indefinitely, that will lead to both low-quality health care for all and fiscal catastrophe.
