The Burden of Medicaid Cuts

House and Senate negotiators are beginning to grapple with the fateful issue of how best to restrain Medicaid spending. Their decisions will affect not only the ability of hard-pressed governors to rein in Medicaid costs that are eating up state budgets, but also the ability of some of the nation's poorest individuals to get medical care. The guiding principle should be to extract savings not from beneficiaries too poor to absorb the cost, but from industries and institutions better able to bear the burden.

By those yardsticks the Senate's approach, which gets most of its savings from drug manufacturers, pharmacies and managed care plans, is far preferable to that of the House, which puts the burden on needy Medicaid beneficiaries.

COST-SHARING

The harshest measure in the House budget reconciliation bill would allow states to charge many beneficiaries premiums for the first time and would allow large increases in co-payments above the current nominal levels. The intent of this provision is to make people more aware of the costs of their health care and to create financial incentives for them to use the most cost-effective treatments - for example, health clinics instead of expensive emergency rooms.

That sounds great in theory, but many studies have shown that even small increases in co-payments cause people who are barely scraping by to forgo medical care until they become so sick they end up in an emergency room anyway. The House bill compounds the problem by allowing health care providers to turn away people who say they can't make the payment.




http://www.nytimes.com/2005/12/12/opinion/12mon1.html?hp