ObamaCare: Temporary Rate Hikes Forever


One of the biggest problems plaguing Medicaid is access. Rates vary by state, the jointly funded federal-state health program for the poor and disabled generally reimburses health providers at far lower rates than Medicare, the federal health program for seniors. And Medicare typically pays somewhat lower rates than private insurance. The result? Health providers are wary of adding Medicaid beneficiaries into their patient mix. 

This is a potential problem for President Obama's 2010 health law, which expands Medicaid coverage to about 16 million individuals. So it proposes a fix. Sort of. As The Washington Post reported yesterday, the law makes Medicaid reimbursements for primary care doctors equal to Medicare's reimbursement rates. But only for two years—2013 and 2014. After that, there's no provision for keeping the increased rates. And needless to say, there's no funding either. The tail end of The Post's report suggests the problem this is likely to create without entirely spelling it out:

Atul Grover, chief advocacy officer for the AAMC, praised the Medicaid pay boost.

"I don't think we're going to solve the problem of access in this one short provision. But it's a step in the right direction."

Still, he said, "it's just two years. So what do you do after those two years are up?"

That's a good question, especially since at the end of 2014 there will be millions of new Medicaid beneficiaries, with even more to come, assuming that the health care law has not been repealed or struck down by the courts. But although we don't know what will happen then, we can guess. If the history of Congressional attempts to keep doctors from taking pay cuts under Medicare's sustainable growth rate (SGR) formula via an endless succession of temporary "doc fixes" is any indication, Congress will begin yet another tradition of temporary patches that only make the system more unstable. 

In related news, two members of Congress once again proposed yet another permanent "fix" to the sustainable growth rate this week. It's not the first. I seriously doubt it will be the last.