Baucus Mulling Even Broader Medicaid Expansion

The problem is this: The health reform bill to be taken up by the Senate Finance Committee this week requires that nearly everyone have insurance coverage, but some members of the panel — notably Sen. Olympia Snowe (Maine), the only Republican showing any interest in the proposal — say the mandate is unfair without greater subsidies to help working families afford their new coverage.

The solution: An even greater expansion of Medicaid?

So reports The Washington Post, which points out today that Finance Chairman Max Baucus (D-Mont.) is in the pickle of wanting to expand subsidies but not knowing how to pay for them.

In a meeting Monday night with Finance Committee Democrats, Baucus cautioned that lawmakers may have to find additional revenue sources or cost savings, depending on how drastically they seek to change the bill. “The main discussion was, ‘Okay, how do we make insurance affordable for people? Because we’ve got to make insurance affordable.’ But the next question was, ‘How do you pay for it,’” Baucus said.

One option Democrats were discussing was to expand Medicaid as a potentially less expensive way to cover low-income people.

That strategy, though, is something of a punt. As we’ll point out in a piece later today, the Medicaid expansion already included in the Democrats’ proposal — which would hike eligibility from 100 percent to 133 percent of the federal poverty level — already poses risks because so many of the nation’s physicians are refusing to treat new Medicaid patients. Indeed, only about 40 percent of the nation’s doctors have a policy of accepting all the new Medicaid patients that arrive at their door, according to a report released this month by the Center for Studying Health System Change. Nearly 30 percent of physicians won’t take new Medicaid patients at all, the group found.

There is some debate around the reasons for this reluctance, but it can’t help that Medicaid pays, on average, 72 percent of what Medicare pays for the same services, according to an April report from the Urban Institute.

The health reform bill in the House recognizes that discrepancy, and includes a provision that would hike Medicaid rates to match those of Medicare by 2012 in hopes of encouraging more physicians to participate. But Senate Finance Committee leaders, ever-searching for savings, left that provision out of the upper chamber’s proposal.

Not that there aren’t advantages to Medicaid as it stands. Supporters are quick to point out that patient costs under Medicaid are much less than private coverage alternatives.

Still, while Medicaid might be the tempting option for lawmakers looking for savings, it will do little good to patients if it doesn’t ensure them access to care. Indeed, what good is providing coverage that few doctors will accept?