Medicaid Is Far From Broken

October 15, 2013

Medicaid Is EfficientCritical Health Insurance Should Be Offered to More Virginians

Virginia’s Medicaid program isn’t the broken, out-of-control system that its opponents portray. Far from it. The public insurance program for low-income people provides a wide range of Virginians with needed health care, improves their overall well-being, holds down medical costs, and protects families from financial ruin because of serious illness or injury.

This paper explains how Medicaid does that efficiently, and why Virginia lawmakers should accept federal money to make it even better.

Despite the strong rhetoric of those opposed to expansion, the fact is Medicaid is an efficient insurance program that connects people with the health care they need to stay healthy and productive. And lawmakers should expand coverage options to get hard-working Virginians the help they need.

Among the report’s key findings:

  • Medicaid coverage is efficient.
    • It costs much less to cover people of similar health status with Medicaid than private insurance. Medicaid costs 27 percent less for children and 20 percent less for adults than private insurance.
    • Growth in Virginia Medicaid spending is largely due to the steady rise of health care costs nationwide and greater use of services. These factors account for 66 percent of the growth in costs since 1990.
    • Medicaid enrollment has more than tripled since 1990, but that accounts for just 24 percent of spending growth and also includes enrollment increases from three recessions.
  • Physicians are accepting new patients.
    • Contrary to what many critics assert, most doctors accept patients with Medicaid insurance – about 76 percent.
    • The share of doctors accepting new Medicaid patients is nearly the same as the share who are accepting new patients with private insurance or Medicare.
    • And the Affordable Care Act gives primary care physicians a strong incentive to accept new Medicaid patients right now because it increases reimbursement rates for Medicaid through 2014.
  • Medicaid coverage improves health.
    • Gaining access to health coverage means that people can get the routine care they need before an inexpensive condition becomes a costly emergency or an expensive chronic illness.
    • Compared to people without insurance, people with Medicaid are 25 percent more likely to report that their health is “good” or “excellent.”
    • Expanding Medicaid can have significant long-term benefits, including lower overall death rates. In states that expanded Medicaid coverage between 2000 and 2005, the overall death rate declined 6 percent compared to neighboring states that did not expand coverage.
  • Expansion would cover hundreds of thousands, but if the money stops, so does expansion.
    • Providing Medicaid coverage to nearly 400,000 Virginians without health insurance is a great deal because the federal government will pay 100 percent of the cost through 2016 and no less than 90 percent after that.
    • During the 2013 General Assembly session, Virginia lawmakers took the smart step to authorize an automatic end to the expansion if the federal commitment is ever reduced.

Get the full report (pdf)
Read the press release (pdf)