Economic Challenges of Medicaid - Essay Example

Economic Challenges: Medicaid
Medicaid is one of the national health care programs aimed to support low-income people who are unable to pay for medical care themselves. This program covers about 51 million Americans. In Washington, Medicaid is funded by the state and the federal government which reimburses hospitals for providing care to qualifying people with disabilities and people who cannot finance their own medical expenses. Taxes are the sources of finance for this function and that is why the main battle concerns budget proposals and spending. The state of Washington gets financial support from the federal government to cover Medicaid needs (Connolly, 2005).
This year the state of Washington is faced with the problem that the federal government decided to reduce financing to 60 million in "inappropriate" financing gimmicks out of the federal-state program over the next 10 years” (Chaddock, 2005). The state authorities suppose it is nothing more than shifting the obligations of federal financing to the state budget. As for the federal financing it rises with state Medicaid spending.
The state of Washington tries to reduce the level of Medicaid spending by cutting interpreter services. For instance, “since 2003, Washington has reduced by $1 million each month spending on interpreter services for Medicaid beneficiaries with limited English-language skills” (Washington State, 2005). It is expected that the cost of health care and pharmaceuticals will continue its current trend of rising faster than state tax collections. The percentage of uninsured increased from 8.6%t in 2001 to 10.9% in 2004. The percentage of
uninsured in some rural areas is much higher, it is about 17 %. The great concern amongst state and local lawmakers is the rising cost of Medicaid. Medicaid costs have actually been rising more slowly than private healthcare rates.
On the other hand, it is expected that the cost of health care and pharmaceuticals will continue its current trend of rising faster than state tax collections. It can be explained by the fact that people with disabilities need special treatment and expensive drugs in many cases. Such people belong to the group of the most costly Medicaid beneficiaries.
In 2003, the total Medicaid spending in Washington was $5,053,403,005. Medicaid spending (federal and state) increased by about one-third–between the years 2000 and 2003. It was caused by increases in the enrollment of children and non-disabled adults. The 22 % of the state budget is spent on Medicaid. The program is voluntary for states but provides federal matching payments for state Medicaid expenditures. Depending on the relative “wealth” of a state, the federal government’s share of Medicaid costs ranges from 50% to a statutory maximum of 84%. The current concern is that as Medicaid rolls continue to expand, the deficit-ridden federal government will be less able to fund Medicaid spending (DeBose, 2005).
The basic problem with Medicaid is that Washington foots the bulk of the bill, yet most of the administrative decisions are made at the state level. “Offsetting tax breaks mostly for the affluent with spending cuts that could hurt the poor could be politically risky, particularly in the Senate, where moderate Republicans have already warned that the juxtaposition may be untenable” (Murray and Weisman, 2005).
As an increased focus is placed on limiting the growth in Medicaid spending and as the debate over the future of Medicaid intensifies, it will be critical to understand and protect the role that Medicaid plays in the health care system for people with disabilities. Open-ended financing and flexibilities in Medicaid have permitted Washington to innovate and improve the delivery of services to people with disabilities. In Washington, Medicaid receives more than the federal minimum requirements in providing coverage of services to persons with
disabilities. Washington state ranks 42nd among the states in Medicare spending per patient.
That’s about $ 3,900 per patient per year for all Medicare services.
The problem has deep political contradictions. According to the survey: “The Senate wants an $899 billion spending cap; the House calls for an $893 billion cap” (Washington’s Ailing Health Care System, 2002). On the other hand, it is supposed that the federal administration wants to give states more flexibility to administer the federal-state health insurance program for the needy, with a tradeoff: Washington would cap its contribution in the form of a block grant.
Facing a large deficit, the administration is eager to find areas to cut--and budget sanity dictates that something be done with the 40-year-old program. Among the sticking points in discretionary domestic spending are which farm subsidies should be cut next year and the funding level for veterans' health programs.
So, the new estimate was revealed in a briefing in which Medicaid Services officials detailed their plan to widen the coverage of the uninsured and save money in Medicaid. Last year, Washington spent more on hospitals that simply provided data on quality performance, and there's some thought that Medicare might do that for doctors in 2006. Thus doctors as a whole wouldn't yet be paid based on the performance evidenced by the data.
The future of Medicaid is unclear. On the one hand, the state government needs to reduce spending on non-health services (like interpreting), on the other hand, it will try to raise the taxes and support Medicaid and other services, as medical and job problems often come together. In general, national standards should be adhered to, and Washington authorities should be allowed to pursue local solutions to their challenges. Only in this case, they can provide support for people with disabilities and low-income families. Read More