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When will Medicaid begin to get the respect it deserves?

From the July/August ACP Internist, copyright © 2014 by the American College of Physicians

By Robert B. Doherty

The largest provider of government-funded health coverage in the United States, based on number of people enrolled, is not Medicare (49.5 million), the Department of Defense’s TriCare program (10 million), the Veterans Administration (8.9 million), the Federal Employees Health Benefit Program (8.2 million), or the Children’s Health Insurance Program (8.1 million). It does not cover the 8 million plus people who signed up for federally qualified health plans under the marketplaces created by the Affordable Care Act (ACA), not all of whom received government subsidies, although the overwhelming majority did.

Rather, the largest provider of government-funded health coverage is Medicaid, with 62 million enrollees as of April 2014. Medicaid also dwarfs most plans sponsored by the private sector. The Kaiser Foundation Health Plan covers 4.4 million people in California, the most of any single private sector plan in any single state. Only 1 private health insurance plan, the UnitedHealth Group, covers more than Medicaid, with more than 70 million enrollees across the country. Blue Cross and Blue Shield plans cover more than 100 million people, but they consist of 37 independently operated health plans. (Disclaimer: These numbers come from a variety of sources, and although all are as up-to-date as possible, they don’t measure enrollment over identical periods of time. The enrollment data may not completely reflect enrollment in federally subsidized health plans under the ACA. And there may be some double-counting. For instance, some of the people enrolled in Blue Cross and Blue Shield plans are in Medicare Advantage, the Federal Employees Health Benefit Program, and the ACA’s federally subsidized plans.)

Yet no matter how you slice and dice it, Medicaid is huge, and it is getting bigger every day. The Congressional Budget Office estimates that enrollment in Medicaid and the Children’s Health Insurance Program combined will, by 2024, increase by another 48 million people because of the ACA; without the ACA, enrollment would have increased by 35 million people.

You would think that with these kinds of numbers, Medicaid would get even more attention and respect from politicians than Medicare does, but it doesn’t. A politician who tries to cut Medicare is guaranteed to get an earful from the tens of millions of seniors enrolled in the program and from the thousands of physicians, hospitals, medical device manufacturers, drug companies, and others who make money from Medicare.

Yet few politicians fear cutting Medicaid, and when many of them speak about it, it is with a tone of derision. A GOP legislator in Texas, for instance, explained that he opposed the ACA’s Medicaid expansion because it “would trap millions more into Medicaid’s inefficient and fundamentally flawed system.” (Couldn’t the same be said of Medicare?) Most Democratic politicians support Medicaid and its expansion, but they don’t genuflect to the program and its enrollees the way they do with Medicare.

Why the difference? For one thing, even though Medicaid is as old as Medicare—they were both enacted by Congress and signed into law by President Lyndon Baines Johnson in 1965—Medicaid has always been Medicare’s poor sister. This is in a political sense, because the higher-income people enrolled in Medicare are more likely to vote and contribute to candidates and campaigns than the poor people insured by Medicaid. This is also in a literal sense, because Medicare from the beginning was designed to cover all Americans up to the age of 65, regardless of their means and assets, whereas Medicaid was created to cover only poor pregnant mothers and some poor children. Over time, Medicaid has been expanded to cover other categories of lower-income people, but for the most part, you still have to be poor—and in some states very, very poor—to be Medicaid eligible. For instance, in Alabama, other than pregnant women, adults aren’t eligible for Medicaid if they earn more than 13% of the federal poverty level—which works out to be an annual income of $1,517.

The ACA was originally intended to ensure that anyone with an income up to 138% of the federal poverty level could enroll in Medicaid. But after the Supreme Court ruled that the federal government couldn’t force the states to expand the program, half of the states (so far) have declined. The fact that Medicaid is jointly administered and operated by the federal government and the states makes it easier for politicians to duck accountability. If you want to push for beneficial changes, like increasing eligibility, benefits, or payments, you have to lobby the states, or Congress, or both—there is no single decision-maker. Physicians, hospitals, and other clinicians have also been more invested in pressing legislators to support increases in Medicare funding than lobbying to protect and expand Medicaid, because more of their patients, and revenues, have come from Medicare.

Medicaid also suffers in comparison to Medicare because some conservatives oppose providing government help to “able-bodied” poor people, unlike seniors who they might argue have “earned” their Medicare benefits and are more deserving of help because of their ages. For instance, one Missouri Republican recently said he opposes Medicaid expansion because the state’s focus should be on “taking care of those who cannot take care of themselves” and “expanding an entitlement to able-bodied adults defeats that desire.”

Yet I think Medicaid’s day is coming, the day when it begins to get the attention and respect it deserves. When the 62 million people enrolled in Medicaid become over 100 million enrollees over the next 10 years, politicians will have to pay attention to them. With more people covered, the cost of the program, to federal and state governments, will increase, forcing policymakers to look at ways to make it more effective and efficient. Physicians, hospitals, and drug companies will realize that many more of their patients and much more of their revenue have begun to come from Medicaid. Many younger adults raised in middle-class families will have a stake in Medicaid, because as they enter the workforce in lower-wage jobs, they may be eligible for Medicaid coverage in the states that have expanded it.

Medicaid may not attain the reverence and clout that Medicare has, but I believe its days of being the underfinanced and disrespected poor sister are coming to an end.

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