Medicaid delivers healthcare daily to millions of impoverished Americans. It is a lifeline to over one in five Americans, covering medical care from simple checkups to life-saving procedures for millions of individuals. However, behind the scenes, physicians who treat Medicaid patients have a hushed but vital problem: in many states, Medicaid reimbursement has not kept pace with rising costs.
State governments set Medicaid reimbursement rates with some federal assistance. Medicaid typically pays doctors much less than private insurance or Medicare for the same services. Medicaid reimbursement averages just 72% of Medicare rates, according to the Kaiser Family Foundation, and that difference is even larger compared to private insurance. For family doctors, this means treating Medicaid patients can be a loss, most of the time, rather than a sustainable practice.
As the cost of living, medical school debt, and practice overhead have risen, Medicaid reimbursement has remained fairly level in many states. For a doctor, that means there is less to work with in order to keep clinics open, pay workers, and buy new equipment. For patients, this can translate into fewer doctors who take Medicaid, longer waits, less access, and, in some communities, dire healthcare shortages.
When the Affordable Care Act expanded in 2013-2014, the federal government temporarily raised Medicaid primary care payments to Medicare levels. The impact was simple: more physicians saw Medicaid patients, and access increased. But when the pay increase lapsed, reimbursement levels fell back to historically low levels. The temporary fix showed that higher payments would directly translate to more access for patients, but policymakers have done nothing to make it permanent.
Physician burnout is a factor in the crisis. Already stressed practices with high Medicaid, patient percentages report both more administrative aggravation and lower profit margins. The financial realities of low reimbursement rates, combined with high medical school debt, can discourage young doctors from practicing in low-income communities. The outcome is a vicious cycle where the very patients in dire need of care have difficulty locating doctors willing to provide it to them.
Raising Medicaid reimbursement rates is not only a question of fairness to physicians but of granting 75 million Americans who depend on Medicaid stable, timely access to care. It would invest in physicians who provide care to these patients, stabilize the healthcare workforce, and reduce health disparities. These higher payments would make more physicians accept Medicaid patients, which would provide them with access to better primary care. This could manage chronic conditions and keep health issues from spiraling into emergencies that could be more expensive further down the road.
Doctors should not have to choose between financial feasibility and caring for patients and people. If the U.S. is serious about building a more equitable health system, then the long-delayed raise for Medicaid doctors cannot be delayed any longer.
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