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Medicaid Cuts Alert

May 4, 2005

Summary: Here are some of the real problems of cutting cost by denying care, instead of by improving the U.S. healthcare system, one of the most inefficient in the world.

Huge cuts in medical care for the poorest and sickest patients could happen in many or all states, if Federal and state governments try to save money by imposing arbitrary caps and co-pays. (Medicaid is called different names in different states, such as Medi-Cal in California, or Medical Assistance in Pennsylvania.) Everyone knows that there is waste throughout U.S. health care. The problem is that most of the political proposals are all about saving money by numerical quotas or prices that arbitrarily cut needed care, not about improving the system.

For example, doctors as well as patients fear a cap on the number of prescriptions, because it will force doctors to choose which needed prescriptions to omit -- making them practice substandard medicine (or close their eyes and let their patients practice it on themselves) if many people are to be treated at all. Large co-pays on prescription drugs will result in many people on Medicaid (who must be poor to qualify) not filling some or all of their prescriptions, resulting in more illness, drug resistance, and spread of infectious disease. New fees for laboratory tests will be charged against the doctor's office or clinic, which will likely have to cover the cost since their patients will not have the money -- a major problem for public or independent practices, which often operate on a very tight margin if they accept Medicaid patients at all.

There are better ways to save money. One idea is to require prior authorization before paying for Viagra and similar drugs under Medicaid (as private health plans often do, even outside of HMOs -- Blue Cross requires it for Viagra, Cialis, and Levitra, as well as 23 other drugs included for various reasons). Doctors might welcome relief from pressure to write the prescriptions.

This strategy of finding critical areas of clear abuse that result in huge financial losses could be greatly helped by laws requiring more transparency in exactly how government health funds are spent. Today the real economics of health-care delivery is hidden by secret prices and deals.

But ultimately there is no simple solution, because Medicaid is a huge program, accounting for almost one in five of all U.S. healthcare dollars -- and it is the care of last resort, paying for the people that private insurance and other systems don't want. Three quarters of the Medicaid beneficiaries are low-income children and their parents, and the rest are elderly or disabled -- and two thirds of Medicaid dollars are spent for nursing-home care, drugs, and other services for the elderly and disabled. Medicaid cost per person has grown less rapidly than the cost of private insurance -- but the number of people covered has grown as insurance companies have increasingly learned how exclude the people who need the most care.1 AIDS is not particularly expensive compared with other major chronic diseases.

The bottom line is that it is not consistent with American values to abandon the most vulnerable people. We need to improve our healthcare system (one of the least cost-effective in the world) instead of managing financial problems by leaving illness untreated.

What You Can Do

Check with friends, or with AIDS and other organizations you respect, either locally or online, to find out how to get action alerts telling you when it is important to call Congress or your state government to protect Medicaid and other healthcare programs.

Note that phone calls and faxes are often better than letters to Congress, as anything sent in the mail may be delayed for two weeks or more for irradiation or other precautions against terrorist attack, especially during security alerts. Emails are used, but are problematic because email from constituents can be lost among the flood of mass emails sent to everybody in Congress.

Often a personal voice on the phone is best -- either to register your opinion on a current issue, or for a first contact if you have personal experience or expert information you want to share. There may be a local office, if the cost of calling Washington or the state capitol is an issue. Usually there are no official toll-free numbers for calling your representatives, although sometimes private organizations provide them (in which case they will receive the number you called from, when they are billed). In our experience, long waits on hold have been rare -- though sometimes it will take several calls to get through the busy signal, so a Redial button may help. Almost always the calls are brief once you do reach the office. Be polite; if you live in the official's state or district let the person you are speaking with know that; and make sure it is clear what issue you are calling about, and which side you are on.


  1. For background on Medicaid and other current health issues, see the Kaiser Family Foundation. Our reference above is to an "Ask the Experts" Webcast of April 20, 2005, archived both in video and as a transcript on the site.

ISSN # 1052-4207

Copyright 2005 by John S. James. Permission granted for noncommercial reproduction, provided that our address and phone number are included if more than short quotations are used.

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This article was provided by AIDS Treatment News. It is a part of the publication AIDS Treatment News.