Medi-Cal is a microcosm of what's wrong with government managed health insurance

As we continue to debate the potential replacement of Obamacare and, in particular, the impact any pending changes may have on either Medicare or Medicaid, it’s important to recall some of the shortcomings of the existing system. This is particularly true when we look at the increased number of people who have been put on the Medicaid rolls under Obamacare. We can see some of the results rolling out on a smaller scale by looking at the state-run system in California, Medi-Cal. There’s an article out this week in the LA Times which covers the growing complaints of low income families who charge that the poor reimbursement rates and strained pool of providers means that they are basically receiving lower quality coverage compared to those with private plans offered through their employers.

A group of Medi-Cal beneficiaries filed a lawsuit against the state Wednesday, alleging that low payments to doctors are creating an unequal healthcare system in California.

Thomas A. Saenz, an attorney representing the plaintiffs and president and general counsel for the Mexican American Legal Defense and Educational Fund, said the state is required to provide coverage to low-income Californians through Medi-Cal that’s equivalent to the care other Californians receive through private insurance or Medicare.

But Medi-Cal patients have a harder time finding doctors, wait longer for appointments, end up in the emergency room more often and have their diseases diagnosed later than those in other insurance programs, Saenz said. That’s in part because the state mismanages the health program and delays payments to doctors, making them unwilling to see Medi-Cal patients, he said.

Fewer choices in doctors. Longer wait times for appointments. Delayed diagnosis and care. Is any of this sounding familiar? It’s the same trouble we’ve seen on a national level with the Medicaid expansion that took place under Obamacare. Keep in mind that all of this was not only predictable, but had been screamed about by opponents of the program from the beginning. Back in 2012 Heritage was warning everyone about this, explaining why Medicaid needed serious reform before we could talk about expanding it. And keep in mind that this was being foretold before all the elements of Obamacare had fully kicked in.

Medicaid needs reform, not expansion. This federal–state health care program provides health care to over 60 million Americans and consumes a growing portion of state and federal budgets. Research shows a long history of Medicaid enrollees having worse access and outcomes than privately insured individuals. Due in part to low reimbursement, one in three doctors refuses to accept new Medicaid patients. Despite access issues, Medicaid spending continues to grow. In 2010, total federal and state spending on Medicaid exceeded $400 billion.

Sounds eerily similar to what’s now being claimed about Medi-Cal, doesn’t it? And that shouldn’t come as any surprise. The government can mandate the reimbursement rates for any program they establish, but that doesn’t mean that all providers have to accept those rates if it’s going to drive them out of business. So fewer doctors and clinics are willing to take new patients who are enrolled in these programs and the ones who do tend to be the low-end service clinics. (Frequently walk-in clinics where you will see a Physician’s Assistant rather than an actual doctor.) That’s not “equal care for all” no matter how you slice it.

And yet we have people like Bernie Sanders flying the socialist flag proudly and claiming that he wants everyone in the country put on Medicaid immediately. Yes, Senator Sanders, you will definitely be providing equal care for all if we do that. But it’s going to be equally mediocre at best.