Tuesday, May 10, 2005


What would you do if you were a state governor and found out that the costs of your Medicaid program (the program that funds health care for certain groups of poor people) were soaring?

It seems that you would get together with other governors to plan on cuts in the benefits and on increases in the amounts the patients must pay themselves:

In recent months, the governors have drafted at least three versions of a paper titled "Medicaid Reform: A Comprehensive Approach." The documents, obtained by The New York Times, offer a vision of "Medicaid plus health care reform," including "incentives and penalties for individuals to take more responsibility for their health care."

Sounds bracing, doesn't it? But the Medicaid expenses haven't really soared because of careless and irresponsible spending by individual enrollees. They have gone up because:

Drug prices and hospital costs have risen at a brisk pace, but the increase in enrollment is a more important factor.

From 2000 to 2004, according to the Congressional Budget Office, the number of Medicaid recipients grew by one-third. This growth coincides with the erosion of employer-sponsored health benefits. As employers have cut back coverage and raised premiums, private insurance has become less available and less affordable to low-wage workers.