Mark Rosenberg, M.D.
In the second birthday greeting of the year (the first was the 50th anniversary of Medicare), we celebrate the signing in 1965 by President Lyndon Johnson of the Medicaid authorization. In contrast to Medicare, which is funded and managed entirely by the federal government, Medicaid was designed as a federal-state cooperative program to cover medical expenses for certain low-income individuals—specifically, aged, blind, and disabled persons and parents and dependent children receiving public assistance.
The Medicaid program is a hybrid of federal and state funding and control—the federal share of funding is contingent on the state’s adherence to federal standards. This feature of the program has been a source of ongoing tension between states and the federal government.
For an example of disharmony arising from the federal-state partnership in the Medicaid program, we can look at our own State of Illinois. Traditionally, state control of the administration of the plan has meant significant variability in the benefits and access to care from state to state, with some limiting payments to physicians and other providers. In Illinois, it was widely acknowledged that low payment levels had a direct correlation with physician participation; that is, physicians chose not to treat Medicaid recipients rather than accept the program’s low payment for their services.
That was the subject of Memisovski v. Maram, a federal lawsuit that challenged the state’s payments to providers as inadequate to provide access to care by Medicaid recipients. The suit was brought on behalf of all children in Cook County who were eligible for Medicaid
I was a witness for the plaintiffs. I testified about the lack of access to care and low physician participation because of Illinois Medicaid’s inadequate reimbursements. In a major decision that, unfortunately, did not impact other states, the court decided in favor of the plaintiffs and required the State of Illinois to provide adequate payment to ensure physician participation in its Medicaid program.
More recently, the Affordable Care Act (ACA or Obamacare) expanded Medicaid by making it widely available to individuals and families earning below 133 percent of the federal poverty level. And unlike traditional Medicaid, the federal government is paying the entire cost of expanded Medicaid in the first years and a large share thereafter.
However, the same Supreme Court decision that in 2013 found the ACA to be constitutional also held that the federal government could not require a state to expand its Medicaid program.
States choosing to forgo Medicaid expansion—mostly red states—continue to include only aged, blind, and disabled people and pregnant women and dependent children in their Medicaid programs. This is unfortunate, because there is clear evidence that the states that have enrolled low- income families in expanded Medicaid have benefitted from the ACA, with approximately 10 million newly insured.
Hopefully, now that the ACA has become a permanent fixture in American healthcare (see “Affordable Care Act Prevails at SCOTUS Once Again,” Tenth News, August 2015), more states will take advantage of the federal government’s support of Medicaid funding and expand their Medicaid-eligible population.
Finally, because Medicaid is the primary funding source for long-term care for the elderly and disabled, states have obtained waivers of federal requirements in order to find alternatives to institutional care. The resulting innovation is leading to expansion of community-based healthcare.