Medicaid

Medicaid is a federal and state program that provides healthcare for the needy who qualify. This is currently about 54 million people. About $300 billion was spent in 2005 with the federal government paying $177 billion and the states paying $120 billion. Eligibility is fundamentally based upon having a child in a family with income below the poverty level, which for 2005 was about $20,000 per year for a family of four. If that is the case, the guardians or parents taking care of the child and the child may qualify for the program. Pregnant women and children under 6 years are eligible if they are in a family with income less than 133% of the poverty level. The State Children's' Health Insurance Program (SCHIP) is designed to provide healthcare coverage for children up to 19 years living in a family with an income less than 200% of the poverty level. The parents, however, are not covered. People with severe disabilities who cannot work are covered. The working poor who make greater than $20,000 per year or people who do not have children at home are, in general, not eligible. These are the people that make up are large part of the uninsured population.

In an effort to control costs, the federal and state governments have tightened the rules over the past several years so that fewer people can qualify for Medicaid. This has lead to an increase in the number of uninsured.

Things to consider:

Hospital care is reimbursed at about 90% of costs.
Physician reimbursement is about 60% of Medicare fee schedule rates, which are low to begin with, and have not kept up with inflation.
A 2004 study demonstrated that only 62% of physicians nationwide will see Medicaid patients because of the poor reimbursements, with some states at a significantly lower frequency.
In 2000, there were 36 million people on Medicaid and in 2005, there were 51 million people at a cost of $300 billion per year.
The cost of care for this population is higher than it should be since they receive poor preventive care and often utilize the emergency rooms for their primary source of healthcare.
The cost of the Medicaid program has increased by 7.4% to 12.9% per year from 2000 to 2004 despite cuts in the program to attempt to save money.
In 2005 (the last year for complete data), the average cost of care for the 50 million Medicaid patients was about $6,000 per person with institutionalized patients costing about $78,500 per year. The cost for the non-institutionalized patients was about $4059. This is similar to the cost of private health insurance premiums. If the private insurance companies had overhead similar to Medicare (1.8% vs. 20% for private insurers), the cost of coverage would be about $3300. The savings would be about $39 billion annually and they would have a more traditional healthcare experience by keeping them out of the nation's ER's and giving them comprehensive preventive care.