Thursday, March 31, 2011

Is Medicaid Real Insurance?

Whenever the government gets involved in the private sector, there are always unintended consequences. In a 2000 page bill, my guess is that they had no idea what was going to happen, except that they would gain control over 1/6th of our economy. They built it so complicated to ensure failure so that the only alternative would be for a total takeover by the Federal government.

Repeal is our only hope to preserve our freedom to receive the health care we deserve.


As governors across the land struggle with fiscal pressures and pepper the federal government with requests to scale back Medicaid – many people are losing sight of the fact that health care reform (what some call ObamaCare) requires a huge expansion of Medicaid.

In fact, in just three years the nation is expected to start insuring about 32 million uninsured people. About half will enroll in Medicaid directly. If the Massachusetts experience is repeated, most of the remainder will be in heavily subsidized private plans that pay providers little more than Medicaid does.

That raises an important question: How good is Medicaid? Will the people who enroll in it or in private plans that function like Medicaid get more care, or better care, than they would have gotten without health reform? The answer to that question is not obvious. In fact it's probably fair to say that we are about to spend close to $1 trillion over the next 10 years insuring the uninsured and we really don't know what we expect to accomplish by spending all that money.

Here's a stab at an answer. The 32 million newly insured may not get more health care. They may even get less care – because of difficulties getting a doctor. And even if they do get more, odds are that low-income families as a group will get less care than if there had never been a health reform law in the first place. The reason: the same measure that insures 32 million new people also will force middle- and upper-middle-income families to have more generous coverage than they now have. As these more generously insured people attempt to acquire more medical services they will almost certainly outbid people paying Medicaid rates for doctor services and hospital beds. To make matters worse, the health reform law (following the Massachusetts precedent) did nothing to increase the supply side of the market to meet the increased demand.

Bottom line: after we get through 10 years of spending our $1 trillion under ObamaCare, there is no convincing reason to believe that the bottom half of the income distribution will have more care, better care, or better access to care than they have today.

Read full Kaiser Health News article here.

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