Dangerous Times for Medicaid

Abstract:     
Medicaid has become a cornerstone of our health finance system. It covers over 50 million Americans. Many are otherwise uninsurable because of their poverty and/or their disabilities. Others rely on Medicaid because the deteriorating employment-based insurance system increasingly fails to cover low income workers and their families. Medicaid's costs are rising in large part due increased enrollment, and not increasing per-person costs. This paper examines proposed short and long term cost-cutting "reforms" to Medicaid, including those that would shift programmatic power from the federal to the state level, and "ownership society" measures that would reduce or abolish Medicaid's assurance of coverage of a defined array of medically necessary services. This paper argues that some (although not all) of the proposed reforms would lessen our commitment to care for the poor and disabled, in some cases pushing vulnerable people out of public coverage. It argues that the state of private coverage is such that these ejected beneficiaries would become uninsured. Ironically, the Medicaid reforms would, in addition to weakening Medicaid, also weaken the safety net for the uninsured. Some of the long term structural reforms threaten to push Medicaid beneficiaries out of the program to a reduced safety net.

Keywords: Medicaid, Health Law, Health Policy, Medicaid Reform

JEL Classifications: I10, I18, I30, I31, I38

Working Paper Series