Medicaid: A Grim Diagnosis

COMMENTARY Health Care Reform

Medicaid: A Grim Diagnosis

Apr 15th, 2002 3 min read
Nina Owcharenko Schaefer

Senior Research Fellow, Health Policy

Nina Owcharenko Schaefer is well known as a champion of patient choice and robust competition in America’s health insurance markets.
Simple is usually better, right?

So it's not surprising to hear some members of Congress agreeing with syndicated columnist Molly Ivins on how to reduce the number of Americans without health insurance. "The answer is universal health insurance, a single-payer system," she writes. "Every other industrialized nation manages to do this better than we do."

Tell that to Ralph Smith. The 57-year-old Canadian suffers from prostate cancer, a condition that can prove fatal if it's not treated promptly. He's doing better now, but no thanks to "the answer." After waiting nine months for treatment in Canada's single-payer system, he went out and found his own care, at his own expense.

Smith's case isn't an exception, either. Lengthy lines for healthcare are common in Canada. A September 2001 report from the Fraser Institute, a Vancouver-based think tank, found that the average waiting time for surgery in Canada (between a doctor's referral and treatment) rose from over three months in 1999 to four months in 2000-2001.

Things are worse for the people stuck waiting for care in Britain's National Health Service. A recent report published by the London-based Adam Smith Institute notes that some 1 million are on NHS waiting lists. "One in four cardiac patients die while waiting, and one in five lung cancer patients wait so long they go from being treatable to untreatable," notes London's Guardian newspaper.

At least British patients can opt to pay for private care (if they can afford it). Most Canadian provinces have made it illegal for patients to pay out of their own pockets for medical services that are covered by the government-run system. As Mark Steyn, a columnist for Canada's National Post, wryly notes, Canada's got "all the coerciveness of the Cuban system, with none of the efficiency."

Fortunately for Ralph Smith, he had the means to help himself. But many in Canada -- and other countries with single-payer systems -- don't. And neither do the millions of Americans who would, under various proposals being considered by Congress, be forced into Medicaid, the federal government's own "single-payer" health-care program for poor people.

The fact is, Medicaid's ailing -- and adding the estimated 40 million Americans who lack health insurance at any given time would make matters worse.

State-run Medicaid programs are in big trouble. Last year, 37 states spent more on Medicaid than they had budgeted -- $410 million in Indiana alone -- and 20 states anticipate shortfalls in this year's spending.

If Medicaid rolls expand, the federal contribution grows, but so does the state contribution. To many, spending more on Medicaid means less for education, law enforcement or a variety of state services.
States have begun responding to these financial shortcomings by making cuts to Medicaid. They limit services, cut back on medication, curb treatment options and reduce payments to doctors.

The result, of course, is substandard care. Take breast cancer. The National Cancer Institute reports that women on Medicaid are three times more likely to die from it than women who aren't on Medicaid. The Institute also found that women on Medicaid were 41 percent more likely to be diagnosed with breast cancer "at a late stage" and 44 percent less likely to receive radiation treatment.

Rather than force uninsured Americans into a flawed program that puts bureaucrats in charge of health-care decisions, President Bush has suggested a way to help these families get affordable insurance that meets their needs. His solution: refundable health-care tax credits.

He proposes that low-income uninsured families and individuals who don't have employer-based coverage receive a subsidy worth up to $3,000 a year for families and $1,000 for individuals to help cover premiums. Providing these subsidies through refundable tax credits will give these families and individuals the credit "up front" when payments are due, not make them wait for reimbursement at year's end. Under such a system, even those who owe no taxes would get the help they need.

Perhaps most importantly, it would put uninsured Americans in charge of their own healthcare -- a claim neither Medicaid nor the Canadian system can make. Is it worth it? Ask Ralph Smith. The fact that he's alive today may have everything to do with the fact that he gave up on "single-payer" in time and did what all Americans could do under President Bush's plan -- take control of their own health care.

Nina Owcharenko is a health-care policy analyst at The Heritage Foundation, a Washington-based public policy institute.

Distributed nationally by Scripps Howard News Wire

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