The "Obamacare" Fallout: The Real Problem With Medicaid Expansion And The Affordable Care Act
The Coming Storm
With the recent Supreme Court ruling on the Affordable Care Act (or "Obamacare" as is has come to be known), there is a storm brewing on the horizon of the healthcare landscape in America. In this article, we'll discuss what the real problems are, and why so many people are focused on the wrong things.
**Before We Begin**
This is a non-partisan article. The arguments put forth here are based soley on facts and logic, not on political ideology. If you are looking for partisan commentary, either for or against the Affordable Care Act, then I would suggest you check out the forums, as there are plenty of great discussions there.
Where The President Went Wrong
I will be the first to admit, there is a need for healthcare reform in this country, there can be no doubt of it. Far too many people do not have access to affordable healthcare, and of the uninsured, the majority are children and the poor, the people who arguably need it the most. With all of this being said however, the President and Congress are misguided in thinking that, dealing with the Insurance Industry is going to solve anything.
Telling people you're going to tackle healthcare reform in this country by reforming the Insurance Industry is like (to borrow one of my favorite lines from Aaron Sorkin) "running for President of the Walt Disney Corporation by saying you're going to fix the rides at EPCOT". Forcing people to buy insurance, expanding Medicade, and requiring businesses to provide coverage for their employees is all well and good in theory, but it ignores the most critical aspect of the whole issue... insurance companies don't treat people, doctors do.
Doctors Will Stop Taking Medicaid
When I was in college, I worked part time in the business office of a local medical practice. I processed payments, did most of the non-medical paperwork for the doctors there, and also helped out answering the phones and setting appointments when the nurses were busy.
One of the biggest questions I would get from people on the phones was "do you accept Medicaid patients?", which we did not. When I asked the doctor who actually owned the practice why he didn't take Medicaid, he told me that he used to, when he first opened, but that the low payments and unreliability of the program made him decide to quit dealing with it.
With the expansion of Medicaid in the Affordable Care Act, you can expect more and more doctors to follow his lead and simply stop accepting Medicaid patients. You see, the problem is, Medicaid pays less (much less in most cases) than other insurance providers, which means that doctors don't get paid as much for treatments and procedures for these patients. Medicaid also doesn't cover things like "missed appointment" and "cancellation" fees, two things that nearly every doctor in the country uses to maximize productivity.
Healthcare Costs Will Go Up For Everyone
As a side effect of the expansion of Medicaid, we can expect insurance costs, and health care costs in general, to go up for everybody. As I explained above, Medicaid pays substantially less than other insurance providers. The national average, at the moment, is 72% of the Medicare rate (which itself is substantially lower than commercial providers). This means that a procedure that a doctor would be paid $1,000 for from Medicare, would only pay $720 from Medicaid. So who pays that extra $280 dollars? I think you already know the answer to that one.
Doctors do make a lot of money, that is a fact, but they also have a great deal of overhead. An office, staff, utilities, and let's not forget Malpractice Insurance. That is to say nothing of the initial cost of becoming a doctor in the first place. According to the Association of American Medical Colleges, the average debt at graduation for a new doctor was $160,000. So to expect doctors to simply accept the loss in revenue for dealing with Medicaid is just plain unrealistic.
In any business, when your overhead increases, you either cut costs or raise prices. Since most of a doctors costs are fixed (rent, utilities, equipment, staff, insurance, etc.), there really isn't a whole lot of room for cutting back on expenses. This means that the only option is to raise prices. This will result in doctors working with fewer Insurance companies. Since most insurance companies contract with doctors in advance to establish fixed costs, doctors will simply choose to operate with "premium" insurance providers and cash customers exclusively.
Before You Comment
Aside from the general "keep it clean, or if you cant, at least keep it clever" warning I post on all of my articles, I'm adding the following admonition: confine your comments to the topic at hand. If you want to rant on politics in general, take it to the forums; this article is about Medicaid and Insurance Coverage as it relates to the Affordable Care Act, so keep that in mind before you comment.
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