Entitlements

Medicaid! Just Look At It Grow!

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At the beginning of the summer, legislators in Congress balked at a proposal to extend the additional federal Medicaid funding initially included in the stimulus. And for a moment, it looked as if the money might not come through. But eventually a funding measure passed. State budgets got a big break. Officials in several states had built an expectation of that extension into their budgets, and without it, those states would've been certain to face significant shortfalls. Now, thanks to that extension, the cost of Medicaid to the states has actually declined slightly. But the program is funded jointly by the states and the federal government, meaning that the size of the state fiscal burden isn't necessarily representative of the size of the program as a whole. And a new report by Kaiser indicates that, in total, the program has expanded beyond what was expected over the last year:

This was the highest rate of growth in 8 years and exceeded the 6.3 percent spending growth that Medicaid directors had expected; higher than expected enrollment, driven by the recession and job losses, was behind the higher spending. State legislatures have authorized a slower 7.4 percent rate of Medicaid spending growth for the current fiscal year, but two-thirds of states said the chances of a spending shortfall were at least 50-50.

If you fund it, it will grow. If you fund it more, it will grow even more.

Despite the extra billions provided for the program, it's not enough. (It will never be enough.) "There seems to be no end in sight for the fiscal pressure on Medicaid programs," the lead author of Kaiser's Medicaid report tells Health Affairs. And that, of course, leads to greater and greater demands for funding. Already there's talk about extending the extra federal funding again next summer. Temporary funding is rarely temporary.

And rather than attempt to slow the program's growth, or cut it back, Congress voted to make it significantly larger: Half of the new health care law's projected expansion of  insurance coverage comes through Medicaid. By the end of the decade, that law is expected to result in additional 16 million individuals getting covered through the program. Historically, state-based efforts to expand Medicaid have not had much success. And overall the program's record is one of spotty health outcomes and rapidly expanding cost.

As John Hood explained in a recent issue of National Affairs, When the program first began, it cost about $9 billion in inflation-adjusted dollars. It passed in part because some legislators thought they could head off larger, more expensive programs by allowing this one to go through. Today the program costs more than $500 billion. Enough is never enough. 

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  1. $500 Billion. Or roughly half the GDP of India.

  2. Sick people need heath care, Peter, and if they can’t afford it, the state needs to provide it. You’ll notice that you’ve said not a word about them. Not a word. And that’s the sad flaw of all of your health care reporting. You have endless criticism, but you have nothing to say to the people who desperately need health care.

    I want you to take on a project: work at a health care clinic for those in poverty for one year. If you come back continuing to rip on our feeble efforts to help them, be my guest. Write a libertarian screed. But these endless posts that discuss these issues and dance, dance, dance around the fact that you can go to the doctor when you are sick and millions still can’t are an act of cowardice, and beneath you.

    1. Sick people need heath care, Peter, and if they can’t afford it, the state you need to provide it.

      Fixed that for you.

      I want you to take on a project: work at a health care clinic for those in poverty for one year. If you come back continuing to rip on our feeble efforts to help them, be my guest. Write a libertarian screed. But these endless posts that discuss these issues and dance, dance, dance around the fact that you can go to the doctor when you are sick and millions still can’t are an act of cowardice, and beneath you.

      You’re doing it wrong. See you don’t get to take the righteous, I’m-a-fucking-saint tone when you are talking about forcing other people to pay for your charity projects. Come back and use that one when we have an actual choice of who to give our money to. That’s real charity, you fucking leach.

  3. Sick people need heath care, Peter, and if they can’t afford it, the state needs to provide it.

    Whoops, lost me on that last turn.

    the fact that you can go to the doctor when you are sick and millions still can’t

    Lemme help you out, here in the real world:

    Those millions of uninsured are going to the doctor. They’re getting health care. Thousands of hospitals provide this care regardless of whether you can pay. Thousands of clinics provide charity care.

    In fact (as Reason has noted), being on Medicaid is actually negatively correlated with getting good health care.

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