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News of the Day ... in Perspective


Showdown over Medicaid

The Bush Administration is heading for a confrontation with states over Medicaid, contending that states often pay their share with “phantom dollars” to leverage federal contributions, writes Robert Pear (New York Times, 2/16/04).

Bush hopes to save $1.5 billion next year and $23.6 billion over the next ten years by restoring the “fiscal integrity” of Medicaid. Federal and state Medicaid spending amounted to more than $265 billion in 2003, a 60% increase in the past five years. Federal officials expect it to double in the coming decade as the population ages.

In 2002, Medicaid surpassed Medicare as the nation’s largest “insurance” program, providing services to 1 in 7 Americans, writes John Iglehart (N Engl J Med 2003;348:2140-2148). It is the largest item, next to elementary and secondary education, in most state budgets.

Additional Information:

New York cuts Medicaid coinsurance payments to independent physicians by 80%

Provider taxes and other Medicaid funding methods. Medical Sentinel, summer 2001

Criminal prosecutions for Medicare and Medicaid fraud

Medicare and Medicaid the main reason for rising costs and insurance failure (AAPS News, Aug 1992).

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