Medicaid Expansion Buckles Under The Stress of “Open Enrollment”

I have been an insurance broker in the state of Illinois for the past 13 years and I have seen first hand what happens when an over burdened, tax funded, Government controlled, entitlement program like Medicaid is offered to those with incomes well into the middle class. Last year, SCHIP covered about 7 million low-income children and Medicaid covered an additional 23 million. This year, the U.S House of Representatives passed the H.R.2 SCHIP Expansion Bill. This bill adds another 6.5 million children to Medicaid. In fact, according to U.S. Census Bureau data, 42 million children will now be eligible. The bill also allows States to receive federal reimbursement for adding more immigrant children and pregnant immigrant mothers, and removes the 5 year waiting period now required for legal immigrants to be eligible. This would enable immigrants to come to the United States and qualify for benefits the moment they get here.

The present income eligibility cap is $44,000 for a family of 4. The new bill raised the Medicaid limit to $66,000. New York will even include families who earn $88,000 and other state’s allow families to subtract from their income calculation what they spend on rent or mortgage or heating or food or transportation. So children in some families with incomes well over $100,000 will now be eligible. With the median U.S. household income being $50,000 and 60% of U.S. households earning less than $62,000, this means that 3/5ths of American households will now qualify for free health care for their children. The other 2/5ths have the burden of paying for all of this!

In fact, several Medicaid “expansion” programs have been enacted in our State by recently impeached
and now infamous Governor Rod Blagoyevich (Democrat). More on how he handled Medicaid in Illinois:
http://blogs.wsj.com/health/2008/12/18/blagojevich-a-childrens-hospital-and-medicaids-stingy-ways/ In fact, our state was the first to expand these Medicaid entitlement programs to include the “All Kids Covered” plan www.allkidscovered.com the “Mom’s & Babies” plan:
http://www.allkids.com/pregnant.html and the “Family Care” plan http://www.familycareillinois.com/

These entitlement programs not only have provided free health insurance coverage to all low income women who are currently pregnant (“Mom’s & Babies”) and all children – here legally or otherwise (“All Kids Covered”) but they also provide free health insurance to all low income mothers of children who are insured under the “All Kids Covered” program (“Family Care”). One does not need an actuarial degree to quickly conclude that these types of entitlement expansion programs simply can not continue to work without massive and endless influxes of Tax Payer Dollars. In fact, the State of Illinois is currently $1.5 Billion (yes that’s BILLION) behind in payment of claims to medical practitioners who have provided treatment for Medicaid recipients. Furthermore, submitted claims by unpaid practitioners have accrued a potential liability of $81 million in interest due to payment delays over the past 8 years! http://www.mysuburbanlife.com/broadview/archive/x1874998363/Illinois-must-fix-Medicaid-woes Quick update: As of January 2009 a moratorium has been placed on the sliding scale portion of the Illinois Family Care and the Mom’s & Babies program. One can only wonder why. Could it be due to lack of funding?

Illinois was lauded as the “Flagship” state for all others to follow regarding the expansion of the Medicaid entitlement programs. If this is the template for all others to follow, then god help us all, or at least those of us that actually fund the Medicaid system through our hard earned tax dollars. Weighty decisions such as expanding the Medicaid system to virtually “All Kids” regardless of their actual need, simply can not be made based entirely on emotion! Prudent decision makers must weigh the DESIRE to help all mankind against fiscal REALITY.

There simply is not enough money to provide such irresponsible expansions of the Medicaid program. Most especially with the $780,000,000,000 (BILLION)”Porkulus” Bill just passed in the Senate. This is why President Bush vetoed the SCHIP program http://www.nytimes.com/2007/10/03/washington/03cnd-veto.html which was pushed irresponsibly forward by the Democratic Party. The Conservative side of the House shares the same concern for those truly in need. This side of the House wishes to help those who are deserving of such entitlements e.g. legal residents of this country who actually qualify during a legitimate needs assessment. Most certainly not a needs assessment that includes the middle class who can and should insure themselves against medical risk.

Expansion of these entitlement programs to anyone else is a well meaning, but  fiscally irresponsible act. One that, in the end, will end up crippling the already over burdened Medicaid system. This will especially be true when the “Baby Boomers” all start entering the assisted living arena without Long Term Care coverage to help shoulder the burden of the ever increasing cost of professional care that will, without a doubt, be needed for this gigantic population of new senior citizens. This can all be avoided by shifting the risk where it belongs. Namely, the private health insurance industry. This is where the money is, and always has been, to shoulder this burden.

Expansion of these entitlement programs to anyone else is a well meaning, but  fiscally irresponsible act. One that, in the end, will end up crippling the already over burdened Medicaid system. This will especially be true when the “Baby Boomers” all start entering the assisted living arena without Long Term Care coverage to help shoulder the burden of the ever increasing cost of professional care that will, without a doubt, be needed for this gigantic population of new senior citizens. This can all be avoided by shifting the risk where it belongs. Namely, the private health insurance industry. This is where the money is, and always has been, to shoulder this burden.

Those of us who are in need of health insurance have many options to choose from. These options are priced very affordably, most especially so if one takes advantage of the recently expanded tax incentives awarded to those who own HSA qualified HDHP’s http://www.sbisvcs.com/Health%20Insurance%20products.htm Even if one can not qualify for the aforementioned HDHP option due to underwriting restrictions, then there are many other options now available to those who have been rendered “uninsurable” in the individual health insurance market.

These options include the following:

1) State Insurance Risk Pool Coverage provided under HIPAA http://www.naschip.org/states_pools.htm

2) Small Group or Employer Sponsored Health Insurance which contains the all important “Guaranteed Insurability” clause.

and

3) HIPAA certified “Defined Benefit” Health Insurance policies issued on an individual basis to anyone regardless of medical history http://www.sbisvcs.com/guarantee_issue.htm

An integral part of making fiscally sound responsible decisions, means you must explore ALL of your options before leaning on a Medicaid system that is already over burdened by those deserving, and most recently, those who are undeserving.

This is why it is always prudent to consult with a reputable and knowledgeable health insurance broker (not a captive agent who can only offer one company’s products). It does not cost a penny more to buy your health insurance using a broker than to purchase it blindly on the internet. That being said, why not take advantage of the wealth of knowledge accumulated by insurance brokers all over this great country of ours? The majority of them truly have your best interests at heart, and will do their very best to guide you in the right direction to properly secure your financial future. This is most important now, since one can only assume that the quality of care (e.g. ordering expensive follow up tests to properly diagnose a condition) that a Medicaid recipient receives, must inherently suffer. Simply due to the fact that the practitioner knows in advance that payment for services already rendered is behind, and payment for future services may never come! http://www.mchenrycountyblog.com/labels/Kids%20Care.html

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