N.E.W. Libertarian

Promoting clean, honest, open, and limited government in North East Wisconsin

Wednesday, January 17, 2007

Medicaid Cost-Shifting

Lasee’s Notes

Last week, I met with the Manitowoc County Board of Health concerning Medicaid access for dental services, a major problem (I know that sounds exciting). Access to providers, as well as Medicaid reimbursement, are important issues because, annually, the state spends $1.65 billion, the federal government spends $2.58 billion in Wisconsin, and those tax dollars pay for 652,000 Medicaid and BadgerCare recipients in Wisconsin.

Medicaid and BadgerCare reimbursement is the amount of money the state pays a hospital, doctor or dentist for the medical services provided. The state of Wisconsin is only reimbursing providers for about 38% of their medical charges. To make up for that, the providers charge everyone else more. This is the hidden health care tax.

If a business is losing money on a particular product, they drop that product, or they make up for it by charging more for another product. If a doctor (hospital or dentist) is losing money on a patient, they do the same thing, charge everyone else more.

This means higher costs for those 63% of us with private insurance in Wisconsin. That means higher premiums for those who are paying for their own health insurance and for the employers who pay for their employees’ health insurance. Wisconsin health insurance premiums are well above the national average. A good part of that is caused by under-reimbursement of Medicaid, BadgerCare and Medicare. Higher premiums mean that fewer people can afford their own insurance and fewer employers will continue to offer it. It also increases the cost of having employees in Wisconsin if the company pays for all or part of health insurance.

This means that we are all paying a hidden Medicaid tax; our taxes are even higher than we thought. Our tax-funded, government-provided health care is not fully funded and this is a major problem.

On top of the existing hidden Medicaid tax, the Governor wants to add more users to BadgerCare and Medicaid rolls without increasing the funding. He says we can add tens of thousands of people and somehow become more efficient so it will not cost more. I am not making this up. He said that in his inaugural address and the media seems to be taking his word for it.

That increase means the reimbursement rate is likely to drop, which will drive the hidden Medicaid tax up even more, increasing the cost for the majority of citizens and businesses. Is this responsible fiscal leadership?

Because of the shortage of dentists willing to see Medicaid patients, the patients are going to the emergency room for toothaches and other dental needs. This expensive emergency room visit is charged to Medicaid, costing the taxpayer a lot more than it should. This is caused because our state will not compensate providers more fairly for the work they do.
When I wrote about this subject five years ago, I ended by talking about our structural deficit and the need to reduce state spending and start paying these providers more reasonably. Well, five years later, our honest budget deficit has grown to $2.15 billion dollars (Wisconsin is one of only three states running a deficit) and things have gotten worse with reimbursement (we have not increased our rate for years). For the foreseeable future, we need to do everything we can to reduce new state spending. At the very least, we must stop adding more programs and more people to the under-funded Medicaid system.

In other states, not only are dentists refusing to take patients on Medicaid, doctors are starting to do the same thing. I do not want to see this happen in Wisconsin. Raising Medicaid reimbursement rates will help keep more providers willing to see Medicaid patients. This increases access to health care for low-income families.
Health care is a major issue in this state and this country. We believe that access to good health care is one of the most important things we can have. The more expensive it gets, the harder it is for all of us to afford it.

Maybe that is what those who want a government takeover of the health care delivery system want. I believe we must be careful. The grass is not always greener on the big government/socialist side of the fence. Someone still has to pay for fertilizer, weed, feed and cutting. That is just a fact of life. If the government pays, the taxpayer pays.
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Lasee’s Notes is a weekly column by Representative Frank Lasee, 2nd Assembly District, covering events in the Legislature and statewide.

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