How Medicaid & Obamacare Hurt the Poor - and How to Fix Them

"Most physicians can't afford to accept Medicaid" patients, says Dr. Alieta Eck, a primary-care physician based in Piscataway, New Jersey. "If you're getting paid about $17 per visit, it won't be long before you can't pay your staff or pay your rent."

Medicaid is the nation's health care system for the poor. It's funded jointly by the federal government and the states. Medicaid is either the first- or second-largest budget item in all 50 states and the program is slated for a massive expansion under President Obama's health-care reform law. Despite the program's huge and growing overall cost, reimbursements to medical providers are so low that many practices refuse to accept Medicaid patients, causing long waiting periods for treatment.

Eck and her husband, Dr. John Eck, are the founders of Zarephath Health Center, a free health care clinic in Somerset, New Jersey, where they each volunteers six hours per week taking care of poor patients. While the Ecks don't accept Medicaid in their private practice, some of the patients that show up at their free clinic are Medicaid recipients who can't find a regular doctor.

"The hardest thing for a Medicaid patient to do is get a doctor's appointment," says Avik Roy, who writes a health care blog at Forbes.com and is a senior fellow at the Manhattan Institute. One consequence is that Medicaid recipients show up at emergency rooms at nearly double the rate of the privately insured, often with accute problems that could have been addressed earlier in a doctor's office. They're also more likely than both the privately insured and the uninsured to have late-stage cancer at first diagnosis.

After they've been diagnosed, it's also difficult for Medicaid patients to find qualified surgeons who will treat them. A University of Virginia study found that Medicaid patients were about twice as likely as the privately insured to die in the hospital after surgery. Even the uninsured were more likely to make it out of the hospital alive than Medicaid patients.

Despite the program's failings, in 2014 Obamacare will add millions of new patients to the program's rolls. "All too often, people who claim to care for the poor say, 'I'm going to give you a card that says you have health insurance and my work is done,'" says Roy. "But the hard part is making sure that person gets treated."

Obamacare was designed to expand Medicaid by about 17 million enrollees by 2021, but it likely won't meet that goal because the Supreme Court ruled that states don't have to participate in this component of the law in order to keep current levels of funding. So far, the governors of 19 states have come out against expanding Medicaid in their states.

So what's the best way to provide quality health care to the poor without spending more money that we don't have? Roy says the federal government should take the same money it spends on Medicaid and block grant it to the states so they can experiment with health care plans in which the patient is in control.

"Let them spend it on the doctor of their choice," says Roy. "Let people take the money and get the bureaucrats out of the way, and you'll find there's suddenly a lot more efficiency in the way people actually get health care."

Eck believes charity care could be a big part of the solution, if only the government made it easier for doctors to volunteer their time. She has worked with state Sen. Robert Singer (R-N.J.), who has co-sponsored a bill in New Jersey that would allow the state to cover physicians for malpractice in their private practices as a way of compensating them for volunteering. The bill is currently awaiting consideration by the state senate's health care committee.

"Every doctor I talk to says, 'I would do that in a heartbeat,'" says Eck.

In the meantime, when Obamacare takes full effect next year, charitable clinics like Eck's will be more essential than ever to pick up the slack for a social safety net that's already not working.

"I've been doing this for nine years," says Eck, "and I can honestly say that I come away feeling good that I was able to make a difference."

About 5 minutes.

Produced, shot, edited, and narrated by Jim Epstein.

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