States Battle Over Medicaid Eligibility and Access to Care

Would you work for one third of what you're usually paid because the government demanded it? That's what doctors are asked to do in Medicaid, the joint state/federal health care program for the poor.

"One of the challenges for Medicaid is that the reimbursement levels for doctors are lower than they are for Medicare, that's true across the country," says Neera Tanden of the Center for American Progress, a liberal-leaning think tank. And Medicare pays some 20 percent less than private insurance.

With Medicaid reimbursement so far below Medicare, access to care is endangered.

Virginia’s Republican Governor Robert McDonnell says, "You don't want to undermine the quality of care for Medicaid patients because you have a shrinking number of doctors and hospitals that accept Medicaid."

One of the oft-hidden truths about government-funded health care is that it is hard to get a doctor because they're paid so little.

The costs of Medicaid are shared by the states and the federal government, but the states manage it. And they approach it in very different ways.

"What you tend to see is larger, more urbanized, more politically liberal states tend to provide more generous eligibility," says Ed Haislmaier of the conservative Heritage Foundation.

Those states make people further up the income scale eligible for Medicaid. Some offer benefits to those with incomes as high as three times the poverty level -- close to 60,000 dollars in income for a family of three.

But that drives up costs, and to afford them, those states have to pay doctors rock bottom rates.

"The worst offender is New York state," says Haislmaier. "A primary care physician in New York state gets paid about a third from Medicaid what that doctor would get from an elderly Medicare patient … under Medicare."

California pays 46 percent of what Medicare pays.

That raises the question of whether being eligible means anything if beneficiaries have trouble getting a doctor.

"Good luck trying to find a doctor cause the pay is so bad the doctors just would go broke if they took Medicaid patients," says Haislmaier.

“If doctors aren’t being reimbursed at a proper level, then they choose not to offer coverage and that, that becomes an access issue," adds Neera Tanden of the Center for American Progress.

However, other states, like those with big rural populations such as Oklahoma and Mississippi, limit eligibility but pay doctors at or near 100 percent of Medicare rates because they want to make sure people in rural areas can find a doctor when they need one.

So, ironically, some poor states pay doctors better than rich ones.

Under the new health care law, the federal government will give states the money to pay primary care doctors at 100 percent of Medicare rates, but only for two years. Then the states are back on their own -- facing the same old dilemma of deciding between broad eligibility or broad access to care.