Medicare Compliance & Reimbursement

Democrats weigh on benefits of 'flawed' program

During lengthy appearances before the Senate Finance Committee on Jan. 19, HHS nominee Michael Leavitt faced a broad debate about Medicaid's place in the big scheme. Leavitt presented the program as essentially broken: "Delivering health care to the needy is important, but Medicaid is flawed and inefficient," he said.

Democrats defended Medicaid. "Medicaid costs are growing, but mostly from an increase in enrollment and the same health care cost inflation that affects every insurance plan," said senior Democrat Max Baucus (MT). "In fact, Medicaid growth is lower, on a per capita basis, than both Medicare and private insurance."

Between 2000 and 2004, said New Mexico Democrat Jeff Bingaman, Medicaid grew only 4.5 percent per capita. Growth rates over the same period for employer-based coverage and Medicare were 12.6 percent and 7.1 percent, respectively.

Leavitt said that, during his tenure, Medicaid was the second-richest health coverage available in Utah, slightly less generous than Medicare but some 35-40 percent more generous on average than private employer-based coverage. Again, however, Baucus had a different take.

"We hear that Medicaid is Cadillac coverage compared to the private sector," Baucus said. "But keep in mind that, unlike most private insurance, Medicaid covers long term care." Calling Medicaid the long-term care "payer of last resort," Bingaman said the real need was "reforming the long-term care system."