Why States Are So Miffed about Medicaid — Economics, Politics, and the “Woodwork Effect” | Health Policy and Reform

Perspective
Why States Are So Miffed about Medicaid — Economics, Politics, and the “Woodwork Effect”NEJM | June 15, 2011 | Topics: Medicare and Medicaid
Benjamin D. Sommers, M.D., Ph.D., and Arnold M. Epstein, M.D.

Medicaid is under attack. During the past 6 months, various U.S. politicians have proposed radical restructuring, spending cuts, and even the outright elimination of the program. House Republicans have recommended converting the traditional entitlement program for low-income families and the disabled into block grants for states or private vouchers, and they have also declared their goal of repealing the large Medicaid expansion slated for 2014 under the Affordable Care Act (ACA).

There has been even more activity — and vitriol — at the state level. Arizona plans to cut nearly 300,000 adults from its Medicaid rolls over the next year, Florida’s legislature voted to shift all Medicaid enrollees into private managed-care plans to reduce costs, and Texas Governor Rick Perry went so far as to suggest that his state might be better off opting out of Medicaid entirely.1

In part, state leaders are so riled up about Medicaid because state budgets are in dire straits. But the ACA requires the federal government to pay nearly the full cost of the Medicaid expansion (100% initially and 90% after 2019), and without this expansion millions of uninsured Americans would receive care from public clinics and hospitals that are subsidized by state dollars. So isn’t the Medicaid expansion a winning proposition for states?

There is of course more to the story. Although states will receive a large infusion of federal dollars under the ACA, other less-publicized features of the legislation render Medicaid a looming fiscal threat and administrative challenge. In combination with political considerations, these factors have made Medicaid the perfect ideological punching bag for conservatives.


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Why States Are So Miffed about Medicaid — Economics, Politics, and the “Woodwork Effect” | Health Policy and Reform