Reforming Medicaid, a Solution?

As health care budgets continue to increase at a higher rate than inflation, government officials suggest that the solution is cuts to the Medicaid budget. Starting as early as this summer,Oregon will begin to cut Medicaid funding, and states like Arizona have proposed to do the same. To offset the costs of Medicaid, Arizona announced yesterday that they hope to start to charge a fee of $50 for smokers and those considered to be obese as an incentive to lead a healthier lifestyle. Penalizing recipients for leading an unhealthy lifestyle will also force providers to treat patients more effectively. “There is no financial incentive for a provider to reduce the number of hospital admissions, for instance, because that drives down the bottom line. We want Medicaid to move away from that concept to one that supports and financially rewards health plans and providers for supporting quality.” The fee will not apply to families with children, the elderly, people with diseases including cancer, or the disabled.

In Oregon, the state Medicaid program, Oregon Health Plan, covers about 585,000 Oregonians. “Under lawmakers' plan, payments to providers will be cut by 11.5 percent, instead of 19 percent as proposed in the governor's 2011-2013 budget.” Oregon is hoping to be able to generate extra revenue with this percentage increase, which will be used to pay back the hospitals tax and also ensure that provider’s rates won’t be cut. “They'll put the money up, but they'll get every penny back," said Republican Rep. Tim Freeman of Roseburg.

Medicaid also plays a role in the latest Planned Parenthood cutbacks. “48 percent of Planned Parenthood patients are Medicaid patients, and 60 percent of women who use health care clinics like Planned Parenthood say [these clinics] are their main health care providers.” Since so many families depend on services Medicaid offer, there’s no telling how budget cuts may affect these individuals, and if there will be a ripple effect for communities as a whole.

At the 2011 Medicaid Managed Care Congress many discussions revolved around how to do more under tighter budget constraints, and it’s sure to be a topic that we cover in-depth at next year’s event.