There was an article in the Greenville News today explaining the difficult position the state is in. We will run out of money for Medicaid by March 4th of 2011. Since the state is in the worst financial condition in 50 years it does not bode well. The Medicaid officials are requesting that the agency be allowed to run a deficit. I'm not sure how that works. If we don't have the money to fund the agency how can it run a deficit? We cannot print money the same way the Federal Government can. I guess we could borrow money but I'm certainly not one that would want for our state to borrow money in order to pay Medicaid costs. The other option is for the state to stop funding other agencies and programs. The Federal Government pays a large portion of our cost for Medicaid. The state is running a shortage of a projected shortfall of $228 Million this year. Enrollment in Medicaid has increased by 100,000 people since 2007 and an expected 10% increase again next year. By 2918 when the full Obama care takes effect Medicaid rolls will swell by an estimated 480,000 people in South Carolina at an additional cost to the state of about $1 Billion. The number of children eligible will climb (we already insure 43% of all kids in the state). By raising the Federal Poverty Level the Obama care bill raises eligibility for about 16 million additional people in the country (half of the proposed 32 million who are supposed to be covered with insurance as a result of the bill).
If there is one part of the bill that needs to be killed it is the Medicaid part of the bill. That alone will put huge financial burdens on the state as well as all of the other states. We have become a 'nanny' state for Medicaid recipients and not one politician.....not one, has raised an objection. It is as if we are afraid to to say anything. Somebody needs to say something before all of the states go broke. The legal requirements of Medicaid make it impossible for states to cut out or not fund the majority of the benefits, which means that when the state runs a budget shortfall it must either raise money or defund other programs. This is how the Feds can control what a state does with its money. The string is always long and strong.
The other part of the financial strain is on the hospitals and Dr's that treat Medicaid patients. The medical community is now feeling the pinch of the poor economy. Fewer people are doing elective procedures and surgeries due to loss of insurance and more and more people are turning to the "free" care given by law at hospitals. This happens to be the most expensive care and yet hospitals are not allowed to turn people away. The worst case scenario is when a hospital can no longer afford to operate and closes its doors. There are many documented cases of this already and if the hospital didn't close there are some that have closed their emergency rooms. The Federal Government can mandate that a hospital treat patients for free but it cannot mandate that the hospital stay open. The same is true for insurance companies. If the insurance company cannot afford to cover sick people it can go out of business or take certain types of policies off of the market. Such is the case in SC for individual children's policies. Insurance companies have taken those policies off of the market. So much for guaranteeing insurance coverage for children that are already sick.
I attended a meeting last week and the speaker works for Innova in Fairfax County, VA. They are the largest non governmental employer in the county and have over 15,000 employees. They are in the process of laying off 45 nurses in each of their hospitals and replacing them with 45 nurses assistants. The company is expecting their reimbursements for Medicaid and Medicare to be reduced by 20% in the next two years and that their "free" care will go up by 30%. I'm sure this scenario is being repeated all across the country.
Another development that is catching on is the so called VIP practice. This office operates with a set number of patients (600 or so) and charges each patient a set fee per month/quarter/annually of somewhere around $1200/year. There are practices that have told their 5,000 patients goodbye and have taken on 500-600 patients that pay the fixed fee. That leaves over 4,000 patients to find another Dr. There are at least 4 of these practices in the Upstate and possibly more. That means a lot of people are having to find a Dr.
What does this mean? It means that, even if you have insurance, and even if you have money that the availability of good health care is going to be difficult to find. Hospitals will soon have to face the budget axe and do what other businesses have already done......layoff employees and eliminate unprofitable parts of their business. Some hospitals operate "free" clinics. Don't expect to see these stay open when the hospital is forced into choosing between offering services they get paid for versus services they don't get paid for. If the VIP type practice catches on to a large degree there will be many many people looking for general practitioners. Add to that the problem that some Dr's already do not take Medicare or Medicaid patients. As the Federal Government reduces payments for those patients you can expect more and more Dr's to refuse to take those patients on. As I said before, the Feds can mandate anything they want, what they can't do yet is mandate that you stay in business or that you have to take certain patients. I say yet, because there is talk already of making VIP type practices illegal.
So, if you get a chance to call or talk to your political representative ask him about the increasing number of Medicaid patients and what that will do to our costs. Tell him to roll back the Federal poverty level and to get rid of the Federal mandate that hospitals have to treat patients for free at emergency rooms. Taxes in SC will have to go up just to pay for the increasing number of Medicaid patients. That alone is going to put a huge burden on South Carolina. That alone will reduce your access to good health care, to good Dr's and to better care. If we insist on providing free care to 1/5 of the population in SC then get prepared to pay for the benefit. It will not be free and it will not be cheap.