Medicaid is gobbling up state budgets left and right, and Pennsylvania is no exception. State Medicaid costs from 2014 through 2020 are estimated to increase by $841.2 million. Currently, Medicaid consumes 21% of the state General Fund budget.
The Philadelphia Inquirer reports on the drastic measures—like not covering organ transplants—other states have taken to cut exploding Medicaid costs. Yet Medicaid has always been a low-quality provider of health care. In many cases, those on Medicaid have producing worse health outcomes than the uninsured.
Saving the poor and disabled from this dysfunctional system will not come from tweaking benefit provisions or enrollment requirements, but comprehensive reforms.
1. Pennsylvania needs to crack down on Medicaid fraud. The Auditor General’s investigation revealed improper eligibility determinations on more than 1,600 randomly selected applications between January 2005 and March 2008—resulting in $3.3 million in payments to ineligible recipients. At this rate, overall fraud and waste in Pennsylvania Medicaid alone approaches $1 billion.
2. Instead of a fee for service system, recipients should be awarded credits to purchase insurance. Under this system enrollees have more control over their health care. Florida, South Carolina and Louisiana have already adopted this approach. When individuals have more control over their health care dollars they use medical services more discriminately, and doctors have more freedom in treating Medicaid enrollees.