Mandatory Medicaid expansion: prescription for disaster

Dennis G. Smith at the Heritage Foundation explains how the mandatory Medicaid expansion in the Obama/Reid/Pelosi health care plan ignores the already precarious financial conditions of the States:

Under the giant House and Senate health bills, Congress is counting on enrolling 15-20 million more people into the Medicaid program, albeit with promises of enhanced federal funding. Fresh evidence from the National Association of State Budget Officers (NASBO) demonstrates that states are in no position to accept any increased costs of expanding Medicaid. But the bills would force more people who are currently eligible for Medicaid to enroll--and the states would be left to pick up the tab without any additional federal funding.



State General Fund Expenditures Drop for Second Year in a Row


A new report from NASBO shows that the budget situation faced by states is truly unprecedented.[1]


Over a 32-year period (1979-2010), state general fund expenditures increased on average by 5.6 percent annually. Between 1979 and 2008, general fund spending had declined only once: in 1983 by 0.7 percent from the previous year. But state spending declined by 3.4 percent in 2009 and is projected to decline by 5.4 percent in 2010.[2]


Expanding Medicaid at the Cost of Everything Else


In their 2010 budgets:


•31 states cut personnel,


•30 states cut K-12 education,


•30 states cut higher education,


•29 states cut Corrections,


•28 states cut Medicaid,


•25 states cut transportation, and


•22 states cut public assistance.[3]


Given the budgetary outlook, states will continue to make program reductions. Both the House and Senate bills impose a "maintenance of effort" (MOE) requirement on states to prevent them from lowering current Medicaid eligibility. Giving Medicaid preferential treatment will force states to make deeper reductions in other program areas.

This is complete insanity on the part of our elected officials.  Ben "cornhusker kickback" Nelson is now advocating that all states receive the same federal Medicaid assistance that he negotiated for Nebraska.  Where do these people think that money will come from?

Did you know that Medicaid recipients are eligible for a free cell phone? (So are people who are on welfare, food stamps or live in public housing).

And you should put down your coffee before you read about this Medicaid benefit in New York (h/t Don Surber):

A Dutchess County woman took a daily $300 taxi ride to visit her son in Albany for three years -- and taxpayers picked up the tab. From the Times Union:

The $196,000 cab bill was just one example of $169 million misspent by Medicaid, according to state Comptroller Thomas P. DiNapoli, who released three audits Tuesday on the public system that pays for the health care for the state's poor and disabled. [snip]

The DOH defended Dutchess County's approval of the rides. According to the DOH's statement attached to the comptroller's audit, the woman's child was a patient at the St. Mary's Rehabilitation Center for Children in Queens. When the child was transferred to St. Margaret's Center in Albany in 2004, St. Mary's sent a letter to the Albany facility "stressing the importance of the mother's involvement in the child's care."


"Based on this opinion, the Dutchess County Department of Social Services approved the mother's transportation between Poughkeepsie and Albany in order for her to continue to participate in ongoing training/education specific to the child's care," the DOH said.

The cab rides kept going for three years.

Other problems found by the auditors:

$53 million in overpayments for Medicaid recipients who had more than one identification number.


$20 million that was nearly spent because of a clerical error. A reimbursement rate for a mental health provider was erroneously changed from $147 to $15,151 – instead of $151 -- and the DOH computer system did not catch the mistake. Auditors found the error and notified the DOH before any payments had been made under the higher reimbursement rate.


$5.4 million in overpayments to 10 hospitals that billed for discharging a patient when, in fact, the patient had been transferred to another facility. Hospitals receive higher payments for discharges rather than transfers.


$1.2 million was paid for services that were not medically necessary or not provided, like the cab rides for the Poughkeepsie woman. She took a taxi five days a week to visit her child at St. Margaret's Center, an Albany nursing home for disabled children.

I can't understand how any sane representative would vote to mandate the expansion of a system so horribly broken.  However, I completely understand why they don't want the final negotiations to be broadcast on CSPAN.