By David Orentlicher
While Medicare-for-All has proved controversial, every Democratic presidential candidate should embrace one of its key elements—folding the Medicaid program into the Medicare program. That would be much better for patients, doctors, and hospitals. It also would be much better for public school children.
Medicare would be a much better program for patients, doctors, and hospitals in several ways. Lower-income families suffer because Medicaid is a federal-state partnership, and some states have stingier Medicaid programs than do other states. In particular, Florida, Texas, and twelve other states have not signed up for the Affordable Care Act’s Medicaid expansion, leaving more than two million lower-income Americans uninsured. Under our current Medicaid system, access to health care for the indigent depends where they live. Folding Medicaid into Medicare would give the poor access to health care in every state.
It also would ensure that Medicaid recipients have genuine access to care. Because Medicaid generally reimburses physicians at lower rates than does Medicare or private insurance, it can be difficult for Medicaid recipients to find a physician to provide care. Low reimbursement rates for hospitals can lead to budget deficits, particularly when Medicaid recipients constitute a substantial percentage of a facility’s patients. That can make it difficult for a hospital to provide optimal care. Folding Medicaid into Medicare would ensure that Medicaid coverage is good coverage.
Moving Medicaid patients into Medicare not only would be important for the health of lower-income Americans. It also would do much to address the serious shortfalls in K-12 funding for all children. Because Medicaid is a federal-state partnership, states shoulder a substantial share of the program’s funding. In California, for example, state and local governments spend nearly $37 billion a year on Medi-Cal, the state’s Medicaid program. Overall, Medicaid consumes the largest part of state budgets after K-12 education.
Medicare, on the other hand, is a federal program, with almost all of its funding coming from the federal budget or payments by Medicare beneficiaries. If states no longer had to pay for the health care of Medicaid recipients, they could use the freed-up dollars to address the chronic underfunding of their schools. In recent decades, shifting of costs from Washington to state capitals has squeezed local budgets. Shifting costs back to DC would provide much-needed relief for the states and allow them to invest much more in the future of their children.
Federal-state partnerships have been justified in large part in terms of local control of policy. But policy-making authority is illusory when funding does not keep up with basic public needs. Folding Medicaid into Medicare would do much to make sure that patients and children throughout the country receive the services they require, whether they live in a rich state or a poor state.
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