While an entire series of newsletters could be devoted to this issue, you should be aware of some new information. In 2003 Medicaid spending was up one-third from the year 2000. However, increased program spending was driven largely by rapid increases in enrollment of children and parents in low-income families. In fact Medicaid costs actually grew at a slower rate than private insurance costs. According to the Kaiser Commission on Medicaid and the Uninsured, the real problem is rising health care costs and “the states’ ability to pay the bill, not that Medicaid spending is out of control.”
According to a study in the May/June 2004 issue of Health Affairs, the U.S. continues to spend much more on healthcare services than any other industrialized nation, even after more than 10 years of managed care. In 2001, each American spent 18.2 percent of their income on medical care, more than they spend on food, tobacco, housing and transportation.
So before we scrap the whole Medicaid program, lets determine the actual problem.