View Full Version : The Medicaid Cure

01-10-2014, 09:11 AM
Something really interesting is happening on the health-care front: costs are rising much less rapidly than anyone expected. This is good news for the budget; itís also good news for Obamacare. There was much skepticism about promises that health reform would ďbend the curveĒ, reducing cost growth; well, the curve is bending, and itís likely that the cost control measures that are part of Obamacare (and have been in effect for several years) are part of the reason...I havenít seen mentioned much, however, is that another aspect of recent developments ó the rapid rise in Medicaid enrollment, despite Republican efforts to block it ó adds to the prospect of continuing good news on health costs.

Medicaid gets a bad rap. Itís a poor peopleís program, and itís widely assumed that this means poor care. In fact, thereís not much evidence that this is true, and claims that Medicaid patients canít find care are greatly exaggerated. Beyond that, however, Medicaid is the piece of the US health care system (aside from the VA) that does the best job of controlling costs. It does this by being able to say no. For example, itís able (in a way Medicare so far canít) to say that it wonít pay for me-too drugs that are far more expensive than equally or almost equally good alternatives. This ability to say no, combined with its size, means that Medicaid covers people far more cheaply than private insurance, and probably than Medicare.

One way to think about this is that Medicaid is actually the piece of the US system that looks most like European health systems, which cost far less than ours while delivering comparable results.

Now, expanded Medicaid is a key part of Obamacare ó and so far, despite GOP obstruction, Medicaid enrollments have outpaced insurance through the exchanges. This is often reported as if it were a bad thing ó as if Medicaid were somehow a fake solution, as if only purchases of private insurance count. But Medicaid is good, very cost-effective coverage! And rising Medicaid enrollment is, aside from a huge benefit to the previously uninsured, a step toward better cost control in the system as a whole.


March 31st - Tick-Tock :wink: