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Congress should let ObamaCare's Medicaid payment increase expire

12/29/2014

The Obama administration continues boast of the rise in Medicaid enrollees. Just before Christmas, for instance, Cindy Mann, deputy administrator of the Centers for Medicare and Medicaid Services, hailed as a "milestone achievement" the addition of 9.7 million Americans to Medicaid and the Children's Health Insurance Program (CHIP) since October 2013.

"This is great news. But, the best news is that the number of people with health coverage continues to increase," Mann wrote. "New data released this week show[s] that the drop in the Nation’s uninsured rate so far this year is largest over any period since the early 1970s. The uninsured rate is now at or near the lowest level recorded in data spanning 50 years. And, the number of people with health coverage is growing as Medicaid and the Marketplace continue to work."

Access to health insurance doesn't necessarily mean access to healthcare, and Medicaid is a constant reminder of that fact. Many doctors have refused to participate in the government-run healthcare program, citing low reimbursement rates and burdensome regulations. And with a federally funded temporary payment increase set to expire at the beginning of the year, more primary care physicians may bolt from the program.

"[F]ederal officials have not set forth a strategy to expand access to care with enrollment, and in many states Medicaid payment rates for primary care services, like routine office visits and the management of chronic illnesses, will plunge back to 2012 levels, widely seen as inadequate," The New York Times explained over the weekend. "For the last two years, the federal government has required state Medicaid agencies to pay at least as much as Medicare pays for primary care services. Family doctors, internists and pediatricians have thus received Medicare-level payments for primary care, with the federal government making up the difference in costs."

The temporary payment increase was designed to bring more primary care providers into Medicaid to treat the influx of millions of patients into the program, though whether it accomplished this goal is up for debate. The Times cited a study by the Urban Institute, which estimates that payments will be cut by an average of 43 percent, assuming the federal government or states don't extend the funding. Though doctors in some states will see less of a cut than others, those in California, Florida, Michigan, New Jersey, New York, Pennsylvania, and Rhode Island will see a 50 percent payment reduction, at the very least.

The only way the payment increase can be extended is by congressional authorization, much like the so-called Medicare "doc fix," which Congress frequently passes to avoid cuts to the reimbursement rates for physicians. These cuts were designed to keep Medicare fiscally sustainable, but they're routinely ignored in the absence of real entitlement reform. This fix has been applied 17 times since 1997, the most recent of which was a $21 billion measure passed by Congress earlier this year.

As the Times notes, President Barack Obama proposed a one-year extension of the Medicaid payment increase in his FY 2015 budget. His budget, of course, went nowhere on Capitol Hill. When Congress reconvenes next month, under complete Republican control, the pressure from the administration, Democratic leaders, and lobbyists to extend the payments could intensify. But with the national debt at $18 trillion and the costs of entitlements projected to skyrocket in the coming years, Republicans shouldn't cave and continue to fund a broken Medicaid program.