NY State Medicaid Spending: Surely This Can’t Be (But It Is)

The previous post on Elliot Spitzer and Medicaid fraud linked to this item; see middle of Page 2 at link), where it was noted that The State of New York:
- will spend $44.5 billion on Medicaid in fiscal 2005-2006.
- will serve 4 million Medicaid recipients.

That’s $11,000 per person, $22,000 per covered couple, $44,000 for a four-person family.

It seems to me that the state could buy every Medicaid recipient traditional health insurance, PLUS long-term care insurance for every recipient over 50, for less than half of what it spends now, even with no underwriting (i.e., no exclusions for “pre-existing conditions”). What am I missing?

There is a siren-flashing APB out for Porkopolis on this one.
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UPDATE: Porkopolis to the rescue (with details and documentation).

Read the whole post. He quotes from a Buckeye Institute article that gets to the bottom line: “If the state really wants to help working, uninsured people it should consider direct health-care vouchers or Medical Savings Accounts as the best ways to foster self-reliance and to control taxpayer costs.”

New York, Ohio, and other high-cost Medicaid states would actually be better off if they entirely funded health-care allowances for all Medicaid recipients and told them “Here. This is yours to spend ONLY on medical care. If you go over the allowance, we’ll cover you. But we’ll split the savings with you every year that you stay under.” Access to the money would only be permitted by approved medical providers, and the accounts could be easily monitored by state and federal auditors. Overall, I would characterize it as the voucher concept with a cost-saving twist.

I have some misgivings about this concept (because it seems unfair to those NOT on Medicaid, might discourage people on Medicaid from improving their lot in life, and at the extreme cause some greedy parents to neglect providing needed care for their kids), but it seems beyond dispute that it would save tens of billions of dollars nationwide, cut down tremendously on paperwork, and encourage Medicaid recipients to be stewards of their health-care dollars.

The other part of Medicaid is the long-term care piece, which could probably be solved by buying long-term care insurance on a group basis for all (unnamed) recipients. But that one probably requires more thought.

Comments and e-mails are welcome.