Byline: Knight-Ridder
A health-care coalition Thursday proposed a $21 billion overhaul of Medicaid, the government health program for the poor, that would extend coverage to 11 million people, expand benefits in about half the states and increase payments to doctors and hospitals.
The coalition, led by the American Medical Association, called the present program inadequate because it covers only 41 percent of the poor, provides benefits that vary widely from state to state and pays health care providers less than other insurance plans.
Dr. James Todd, an AMA executive, cited those shortcomings to justify his description of Medicaid as 'a system unworthy of America.'
State Assemblyman James Tallon of New York, who directed the Medicaid study begun in August 1987, declared that Medicaid 'simply does not work in its current form.'
The plan would cost $20.7 billion a year: $9 billion to cover the poor, $6.5 billion for benefits and $5.2 billion to increase reimbursement rates.
The group didn't specify how federal and state governments should share the increased costs. But if the present practice continued, federal costs would increase by $11.5 billion and the states' by $9.2 billion. However, the reforms would save state and local governments, hospitals and the poor about $7.5 billion, the group said.
The plan developed by the Health Policy Agenda for the American People would reshape Medicaid, a federal- state program established in 1965.
Applicants no longer would have to be on welfare to qualify for Medicaid. Everyone living below the federal poverty level, which is $9,690 for a family of three, would be eligible.
States also would have to offer a minimum package of benefits, which would be the same as those now offered by the state of Washington. About 23 states would have to expand benefits, according to Kenneth Thorpe, a Harvard economist who helped develop the proposal.
The proposal also would increase Medicaid payment rates, in the case of doctors, to those paid by Medicare for treatment of the elderly and disabled. For hospitals, the higher rates would cover their costs to provide care.
'Medicaid pays between 50 and 60 percent of what Medicare pays,' Thorpe said.
Last year, Medicaid cost federal and state governments about $51 billion to provide health care for 22 million poor people. The federal government provided about $5of every $9 for Medicaid. States financed the rest.
Of the 11 million new beneficiaries, 4.2 million would be children and many others would be men, Thorpe said. He said most of the new beneficiaries live in southern and western states.
Tallon, the Democratic majority leader of the New York Assembly, conceded state and federal governments would need to raise additional revenue to cover the plan's costs.
A Senate Finance Committee staff member said the proposal was consistent with smaller changes Congress has made, but doubted revenues could be found for such a change.
