We will be hearing more about how Medicaid is draining money from the state, as in this news story.
Senate Republicans said Monday their two-year budget proposal demonstrates how Medicaid keeps siphoning away money from other priorities, …
The proposal for state government spending through mid-2015 sets aside $1.2 billion over those two years for additional costs of Medicaid, the federal-state health insurance plan for 1.5 million poor and disabled North Carolina residents. ….The increase comprises nearly all of the 2.3 percent overall spending increase proposed in the $20.6 billion plan for next year, said Sen. Pete Brunstetter, one of the chamber’s chief budget-writers. …. Brunstetter said higher-than-expected Medicaid costs this year also caused Republicans to scale back other initiatives and contributed to them offering no pay raises this coming year for teachers and state employees.
Stories about the Medicaid mess should be prefaced with some key facts:
1. Recent research, from a study of Oregon’s Medicaid expansion, shows that the program has virtually no effect on health.
As this Forbes writer shows, a closer look at that study shows that the result was even more damning. For instance, people in the study, obviously, knew they had been admitted to Medicaid. They benefited from the placebo effect. Like taking a sugar pill, just knowing they were admitted to a special program can make people feel better. And the study showed that a good slice of these people reported better health — before they even started getting care under Medicaid.
In short, a large chunk of the billions spent on Medicaid is wasted.
2. The same writer, in a different forum, noted that the University of Virginia found “Medicaid patients were almost twice as likely to die as those with private insurance; their hospital stays were 42% longer, and cost 26% more. Compared to those without health insurance, Medicaid patients were 13% more likely to die, stayed in the hospital for 50% longer, and cost 20% more ….”
3. North Carolina has a “Cadillac” Medicaid plan, which in many ways overpays for services.
4. According to a state audit, NC spends far too much on administrative costs.
5. NC has chosen to fund services above and beyond what Washington demands. A Civitas report from a year ago indicated that each year NC Medicaid pays billions for services that the feds don’t mandate. That’s right: Congress spends money like a drunken sailor, but even they quailed at requiring states to pay for many health services. Tar Heel State lawmakers, however, in years past stepped up to spend even more money.
Bottom line: North Carolina spends profligately on medical care that in many cases is likely to be of dubious value.
Just remember all that as the health care spending debate drags on.