Medicaid: Can’t Get Enough of Your Love Money, Baby

Someone at The Boston Globe is catching on.

The paper opens its latest piece on the Bay State's Medicaid woes with the line: “The money, it seems, is never enough.” No kidding! It goes on to explain just how fiscally wrecked the state’s Medicaid program is:

Governor Deval Patrick approved a record $9.6 billion last July for the state’s health insurance program for the poor — sufficient, he assumed, to last a year. But the program’s costs quickly outpaced expectations, forcing the governor to approve an additional $329 million in October and then seek $258 million more, which lawmakers approved last week.

And even that may not last, with six months remaining in the budget year.

The ballooning cost of Medicaid is one of the biggest challenges facing Massachusetts and other states, which have seen demand for the program jump during the recession as increasing numbers of unemployed residents enroll in the subsidized insurance plan.
With Massachusetts confronting an estimated $1.5 billion shortfall in the coming budget year, Patrick has said he is committed to financing the program, known as MassHealth. But he has acknowledged that it cannot continue to grow at this rate.

This isn’t a new problem for the state, which has already killed a slew of benefits in hopes of keeping spending on the program down:

Massachusetts last summer slashed dental benefits for MassHealth recipients, forcing hundreds of thousands of poor, elderly, and disabled residents to visit community health centers, instead of their regular dentists, for fillings, root canals, dentures, and other routine procedures. Bigger cuts or restrictions loom.

Normally when Medicaid costs shoot up, states alter eligibility requirements to keep enrollment levels manageable. But part of the problem states like Massachusetts are having is that the PPACA’s rules prohibit altering Medicaid's eligibility requirements in ways that make it more difficult to get into the program. So states are reacting to the wild cost increases they’ve seen over the last few years but cutting benefits instead. It hasn’t solved the problem.

To make things worse there’s a bigger fiscal roadblock on the horizon: Over the summer, the expanded Medicaid funding that started in the stimulus is scheduled to run out, leading to a funding “cliff” that will only make current fiscal troubles worse. As it is, states relying on that money are already in a grace period: The extra stimulus money was initially supposed to run out last summer, but after a lengthy struggle, Congress relented and extended the padded funding levels by a year. With Republicans running the House, it’s not clear that states will win a similar battle this time around.

Yet despite the program’s ongoing cost programs (not to mention its dubious record on health outcomes), Democrats in Congress chose to use it as the vehicle for half of the PPACA’s health coverage expansion. Congress instructed the federal government to pay for the majority of that expansion, but by the end of the decade, some states will still be on the hook for billions in extra Medicaid costs.

The money, it seems, is never enough.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • ||

    "Over the summer, the expanded Medicaid funding that started in the stimulus is scheduled to run out, leading to a funding “cliff” that will only make current fiscal troubles worse."

    I understand what you're saying here, but I'd point out that when a program is being destroyed by runaway costs associated with what service providers see as a never ending supply of money? Running out of money won't make the fiscal situation "worse"--that's when things start getting better...

    It's just like the rest of the economy--housing was the same thing. The solution to a housing bubble associated with unlimited funding for new houses isn't to extend more funding. When the bubble bursts, the first thing the market does is cut off more funding. That's when--at least--the problem stops getting "worse".

    If the problem is runaway funding, then the funding running off a cliff is the solution. The only thing that could improve their fiscal situation at this point is tax cuts.

    But they'll never do that. They'll hope for growth to save them, and they'll bank on the people of Massachusetts accepting some new level of tax misery as normal. That's what the suckers have always done in the past--why assume the people of Massachusetts are no longer stupid?

  • Xr4L||

    Looking at what they have done to this point why assume the people of Massachusetts have ever been smart?

  • Wind Rider||

    Ya know, now THIS is really progress. Used to be, back in the old timey days, when people actually claimed to still even half-assed be able to even read those really, really old things, like the Constitution, that even with the best political efforts possible, it took, literally, years and years for the train-wreck of unintended consequences to rear its ugly head to the point everybody actually noticed.

    Today's new, slick, more streamlined and efficient political class does such a magnificent fucking job of things, that the train wreck begins almost immediately!

    I, for one, am sure glad they've quit fucking around and making us wait for the nutpunch. (Of course, they'll never match Balko's regularity and speed in that department - but then, they ARE his prime source of material)

  • ||

    Money is no object...just print it!

  • Fluffy||

    Normally when Medicaid costs shoot up, states alter eligibility requirements to keep enrollment levels manageable. But part of the problem states like Massachusetts are having is that the PPACA’s rules prohibit altering Medicaid's eligibility requirements in ways that make it more difficult to get into the program.

    See, this is an example of why you have to use the term "Obamacare".

    95% of the public would say, "PPACA? What's that?"

    It's called Obamacare, guys.

    And these two sentences could be more succintly and accurately rewritten as "Obamacare to states of Medicaid money: Drop dead."

  • Invisible Finger||

    From the article:

    The choices confronting the governor, however, are hard.

    Which means the exploding can will be kicked down the road again. Keep kicking until a new kicker takes over, maybe you'll get lucky and it won't explode until the new guy kicks it.

  • ||

    I'm ashamed of Reason. You use some wack-ass Flying Lizard vid when you could've linked to this:

    http://www.youtube.com/watch?v=7n7yUYVkeGE

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement