The More People We Enroll in Government Insurers, The More Doctors Will Accept Lower Reimbursements

Aaron Carroll explains why so many physicians favor the Medicaid expansion:

What many seem to miss, over and over, is that we’re not debating between giving the uninsured Medicaid or private insurance. We’re debating between giving them Medicaid or nothing.

Many of the doctors who hate Medicaid don’t like that it under-reimburses. They get much more money from private insurance. So they preferentially choose privately insured patients, and they avoid Medicaid patients. That’s their right.

But some types of physicians don’t have that option. About one third of kids are covered by Medicaid, as are one third of births. So pediatricians see a disproportionately large number of Medicaid patients, as do OB-gyns. Medicaid generally doesn’t cover non-elderly adults well. So general internists and family physicians see a large proportion of the uninsured.

Ask these groups if they’d like to see Medicaid expanded, and they will say yes.

Why? Well, a GP who sees an uninsured patient, and likely receives nothing for caring for them, would rather get a Medicaid payment, even if it’s not as much as it would be from private insurance. Something is better than nothing. The same goes for hospitals that care for the uninsured or under-insured. They would all rather get “measly” Medicaid dollars than get nothing at all.

A few years ago I was on a panel on health care reform that included a Tea Party doctor, and one of the points he made was that we can’t reduce our health care costs by paying less to health care providers (even though their prices are crazy inflated) because one by one, they’ll just stop taking Medicare and Medicaid patients.

And maybe they would if we did something stupid like raising the Medicare age or kicking people off Medicaid. But if we add more people to the Medicare and Medicaid rolls, then more and more health care providers will have no choice but to accept patients with government insurance. There’ll be so many of us that providers will have to accept the lower reimbursement rates. That’s how single payer countries manage to keep costs so nice and low. The government insurer has so much buying power that they get to dictate prices to the providers.