Changing The Rules: It Is Just The Beginning
Stanley Feld M.D.,FACP, MACE
A proposal to cut Medicaid payments to some insurers with excessive reserves stirs concern from healthcare insurers.
Progressive politicians refuse to believe that entitlement programs like Medicaid are not viable. Politicians should be looking at creative ways to structure the Medicaid form of insurance for both physicians and patients.
I have not written a blog lately because both the Democrats and the establishment Republicans in both the house and the senate disillusion me. Neither house or senate members are interested in being creative.
Neither body knows how medicine works.
These politicians have no interest in doing what is best for the people who elected them. They are only interested in maintaining power and extending their power over the people they govern.
The result will be to decrease to quality of care to patients forever.
In the meantime there have been news stories on how different corporate organization and big businesses are trying to take over medicine.
Many readers have noticed that emergency clinics are popping up in every city and town.
I believe these emergency clinics centers are in reality real estate plays waiting for so that big corporations, like Aetna; to buy them out in order to expand their plans to take over medical care.
It feels similar to the proliferation of small banks in the 1980’s. These new small banks’ plan was to grow and be bought out at a premium by larger banks in order to enlarge the sale premium.
When the defective program (Medicaid) is a failure one should learn from that failure. One should not continue to try fixes to the program (Medicaid) when each fix creates greater dysfunction.
One should institute another plan that might work. However, government officials continuously apply an additional patch that leads to more unintentional consequences.
This week New York State governor Andrew Cuomo put another patch on its failed Medicaid system. I predict this patch will lead to more unintended consequences. The result will be to make Medicaid coverage worse for its New York State’s Medicaid recipients.
Governor’s Cuomo’s initial mistake was expanding Medicaid at President Obama’s request. He then compounded the mistake by subsequently allowing illegal immigrants in the state to receive Medicaid coverage.
It is not wise to take a financially failed system and expand it. It is much better to change the system.
Now Governor Andrew Cuomo’s budget is proposing to cut Medicaid payments to certain health insurance companies with excess reserves, a move that is alarming insurers because of its intent and its ambiguity.
“The proposal, part of the $168.2 billion executive budget released last week, says that any Medicaid managed care or long-term care Health Maintenance Organization that has excess reserves across all lines of business would be subject to a prospective cut in Medicaid rates.”
Why would an insurance company want to participate in these programs?
The immediate unintended consequence is that the insurance company that found a defect in the payment schedule for HMO’s and managed care would leave the Medicaid market.
The second unintended consequence is it would discourage companies from having incentive to make a profit.
“Under current law, all Health Maintenance Organizations are subject to minimum reserve requirements,” said Erin Silk, a spokeswoman for the Department of Health. “This policy will provide the commissioner with the discretion to make rate adjustments to plans holding reserves in excess of the statutory requirements for reasons that cannot be explained or justified.”
The state did not project any savings from this proposal.”
The state cannot run Medicaid without insurance companies being the administrative service providers. It is the same old story. This comes on top of a proposed fourteen percent tax on for-profit insurers as well as the state receiving a cut of the proceeds when a nonprofit insurer converts to a for-profit insurer as a result of the new tax law.
Governor Coumo wants this additional money because he thinks the insurance industry is going to have a windfall from President Trump’s new tax law. He figures the state will collect $640 million dollars more as a result of this move.
“There were 3 million New Yorkers enrolled in these types of plans in 2014, according to a report from the United Hospital Fund.”
The insurance industry gave the usual illogical reason for opposing Cuomo’s proposals.
These insurance companies are there to make money. They are not going to let Coumo out of his commitment. I believe they will walk away from providing administrative services for the states Medicaid insurance coverage.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
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