A New York Times article from March 15, 2010, documents the most serious problem with cuts to Medicaid payments to doctors: doctors dropping out of the program. The article focused on doctors in and around Flint, Michigan.
According to the article, in 2008 Medicaid reimbursements averaged only 72 percent of the rates paid by Medicare. Michigan, at 63 percent, had the sixth-lowest rate in the country. However, that low ranking does not even take into account the 8 percent Medicaid payment cut implemented last fall in Michigan.
To add to the strain on doctors that accept Medicaid, Michigan’s Governor Jennifer Granholm, has revived a proposal to impose a 3 percent tax on physician revenues. Without the tax, the Governor has warned that the state may have to reduce Medicaid payments by 11 percent.
Due to these drastic cuts, many doctors stress that they can no longer afford to accept Medicaid patients. The article cited doctors that stated they could not afford overhead expenses like salaries, an office mortgage, or malpractice insurance if they accepted Medicaid patients. This problem is especially potent in economically depressed communities such as Flint, Michigan. The year 2009 saw a record enrollment increase of 3.3 million people into the Medicaid program. The Medicaid program now serves 47 million people, with the control granted to states to manage spending by limiting eligibility, benefits and provider payments.
The cuts to Medicaid payments, coupled with the increase in Medicaid enrollment could create a perfect storm with vast amounts of individuals dependent on Medicaid without access to healthcare.
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