Turning a Blind Eye to Medicaid’s Abuses

August 24th, 2010 at 2:37 pm | 12 Comments |

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Last week, pharm House Democrats held a series of events for Consumer Protection Week, with a focus on health reform. Highlighting problems with health insurance companies, Democrats are working to build support for Obamacare.

As I noted before, attacking health insurance companies may be clever politics, but it is somewhat selective.  Rescission isn’t limited to the private sector. (I wrote on Britain’s National Health Service.)

Several readers pointed out that we don’t necessarily need to look across the Atlantic to make the argument.

In a recent essay, John Goodman, President and CEO of the National Center for Policy Analysis, considers some of the problems with government and healthcare: right here.

Yet, in all the episodes of abuse, do you recall even a single instance where an insurer:

  • Arbitrarily dropped coverage for tens of thousands of enrollees with the stroke of a pen — just to save money.
  • Dropped entire categories of care — such as dental care or home health care — because it decided these services were too costly?
  • Arbitrarily reduced the fees it paid to doctors and hospitals, pushing many out of its network, and leaving its enrollees with serious access to care problems?

Probably not. For a private insurer, each of these activities would be a serious violation of contract. Yet there is one insurer that does these things routinely. It’s called Medicaid. About half of all the newly insured people under the new health law will be enrolling in it.

Goodman goes on to name “a few tug-at-the-heart-strings examples” in his essay:

  • A nine-year-old Denver boy died because Medicaid quit paying (in error, it turns out) for his asthma medications.
  • An elderly Michigan woman died of a severe dental infection after Medicaid cut off her dental benefits.
  • A 64-year-old Tennessee man lost his Medicaid coverage right in the middle of his treatment for colon cancer because of income eligibility changes.
  • Maryland Medicaid refused to pay for life-saving liver transplants for two children — arguing that while the procedure was medically necessary, it was not appropriate.

To read Goodman’s outstanding article on rescission, Medicaid-style, see his latest Kaiser Health News column.

Recent Posts by David Gratzer

12 Comments so far ↓

  • LFC

    Yes, there is incompetence in Medicaid and I assume Medicare too, but I’ll put up the pure screaming seething ball of greed and incompetence that is United Health Care against anything out there when it comes to the worse of the worst. I’ve personally experienced the continual failure to pay, along with the attendant bad excuses. I’ve fought the grudging payment when faced with the documentation that proved they were wrong, only to have to do it all over again when they make the exact same claim for the 9th or 10th time. I’m still dealing with the multiple recently attempted claw backs of payments made over a year earlier.

    I’m sure you can find horror stories about any health insurance provider, but UHC has a long and storied history of fines, lawsuits, and failures. If you are faced with a health insurance provider choice and one of the choices is UHC, stay away!

  • Rabiner

    For every ‘horror story’ regarding Medicaid I’m sure you can find many more from private insurance companies which are smaller in size.

  • Chris

    I don’t mind reading — as a matter of fact I come here to get it! — conservative push back on a variety of issues including health care. But I have yet to read a single Gratzer column that isn’t knee jerk and over the top partisan. This guy is not interested in investigating the conservative case with an intelligent and discerning eye.

    Can’t you find someone else to write on this subject?

  • Rabiner


    I tend to agree. He’s using anecdotal evidence to attempt to create concern about a situation that isn’t problematic. Is there going to be problems in administering a complex governmental program such as Medicaid? Of course but so is any large complex company going to have similar problems. The difference is government makes decisions based on costs and private companies make decisions based on profit margins (of which costs are part of the equation). I’d rather deal with the entity not trying to profit off me while providing the same service.

  • Madeline

    I dunno. I usually like Goodman, but I thought he was a little over-the-top in Treme.

  • llbroo49

    Almost surprising that even the Tea Party wants to keep both Medicare and Medicaid exactly as they are. The sad part about this article and author is that if Democrats tried to make changes or acquire the funding to address the very issues this articel brings up- David would complain about the cost and centralized decison making.

  • easton

    Rescission isn’t limited to the private sector. (I wrote on Britain’s National Health Service.)
    And when the hell are your ever going to write about the Japanese, Taiwanese, or German Health Care systems? Oh, right, never.

    And I love this condemnation by anecdotes, find a few cases of human error and lay it all on DA Dirty GUBMINT

    I have been living in Mexico for 5 years, not too long ago my wife took sick and had to go to the Hospital and was there nearly a week. Since I have Government runs IMSS I didn’t have to handle a single bill or statement or anything. As poor as Mexico is IMSS is not bad, I know that I will get decent, basic health care. One of my co workers here had skin cancer, (he scuba dives nearly every weekend) Basic cell carcinoma was given a month off of work, and was treated and as far as we know cured since they removed the tissue. And across the street from where I live there is a charity hospital that takes all comers. Despite Mexico’s problems it has health care outcomes nearly as high as the United States and spends a fraction of the cost. Don’t get me wrong I am not recommending the system but have found it to be more responsive than any insurance company I ever dealt with.

    When I go back to the states for Summer vacation I buy temporary insurance for my family, and my wife got a simple pap test. We were billed 3 times for the same procedure and got a hellish runaround for a simple routine procedure.

    And I love this part about Dental care and Home Health Care, 15 years I worked in Northern Jersey and I sure as hell never had Dental Care.

    By the way the US is ranked 37th in the world, below such powerhouses as Morocco, Malta, Oman, Cyprus, etc.

    And I agree with every other poster here that Grazer is a hack. Honest to God I could lay out a better Conservative agenda for health care than he, and I wouldn’t even agree with it.

  • Oldskool

    Also not mentioned are the fines insurance companies pay as an ordinary operating expense. It’s cheaper for them to pay a few million in fines to one state or another than it is to pay off the claims they sold to policy holders. Yeah, we need more of that kind of “health care”.

  • Non-Contributor

    The NCPA … the only non-partisan group that would quote John Stossel and Newt Gringrich on their website as credible sources of information.

  • mickster99

    David your article lacks the punch the focus that implications of the menace that Obama’s health care is going to destroy America, that it is based on Maoist Socialist Communist Nazi desires to take over health care and place death panels for end of life counseling. You need to focus on the big picture. Death panels poll very well. We’ve effectively created a perception amongst perhaps 40% of the voters that death panels are real. It’s time to drive these points that frighten those who are less informed and unable to bring to bear their own effective critical thinking. You need to do more to keep the fear and anxiety levels up higher. Remember: factual based reporting is not essential. If you feel necessary make things up. Its standard practice rally amongst rightwing progagandists. So don’t let any issues you have about real journalism get in the way. The goal is to keep the right wing in a perpetual state of fearl The fact that you are a “conservative journalist” should give you automatic cred amongst your readers. Lies and making stuff up have worked superlatively up to know. So go for it dude!

  • Right2Express

    In repsonse to LFC above, you should contact your state board of insurance. If the insurance company (UHC) is wrong or owes you money, once you file your complaint with the state board, believe me, You will get your money. Now LFC and Rabiner think about this. IF we end up with in a single payer system, meaning the government controls all aspects of health care, who do you go to when your claim isn’t being paid? Where do you complain then? At least with the current system you have the option of changing companies or your employer has the options of changing companies. ( individual purchasers do have to be insurable to move around – which is a hard situation if you are not)

    I am a 22 year life and health agent in Texas. The only claims I have had rejected where an orthotic shoe – which was contractually listed as an exclusion and a Doctors fee for reading a lab tests that are read by a machine and not bythe doctor. And 1 repeat MRI that was being used when the standard of care is to use a Cat Scan.. Pretty good for 22 years wouldn’t you say?

    All other claims were filed incorrectly by the doctor’s office and once filed correctly were paid.

    Obama Care is offering small employers 35% tax credit if they will insure their employees.. but get no tax credit to insure family members who work in the family owned business. I do not understand this. It is another smack at the small employer and more so the family. IT costs the same to insure your sister or adult child worker in the business as it does any other employee.
    There are DOL and IRS rules that do not allow an employer – especially a small employer 25 lives or less – to buy better benefits for themself and or family members than all other employees.

    So why does the credit not exist for the family member? Does the family member not have a right to work ? Why the descrimination against the family member?

    Then in 2014 the small employer will only get the tax credit if he/she buys insurance for his/ her employees through the exchanges. So now the employer, to be competitive will be forced to buy from the exchanges. In this situation the exchanges will be able to offer health coverage for equal to or even up to 35% more than non government owned insurance companies and still get the business.

    Last LFC if you had an insurance agent involved who was worth their salt your claims would be paid. My point being, set up a system with no agent involved and the insurance companies exchanges and the government will all just walk right over your. Might as well go live in any country you want to, because there will not be anything special about living here anymore.

  • Rabiner


    “IF we end up with in a single payer system, meaning the government controls all aspects of health care, who do you go to when your claim isn’t being paid? Where do you complain then? At least with the current system you have the option of changing companies or your employer has the options of changing companies. ( individual purchasers do have to be insurable to move around – which is a hard situation if you are not) ”

    No one stated that Single Payer would mean government control over all aspects of the health care system. Single Payer only refers to who pays for health care, not who provides it. In addition you can have a system like Switzerland or other countries where many people purchase supplemental insurance similar to Medicare Advantage. There are many forms of single payer which were never discussed during the HCR debate since once you said single payer people would basically put their fingers in their ears and scream about socialism.

    Was the HCR bill perfect? Far from it and that will need to be rectified in the upcoming Congresses but it’s a start. Nothing is built in a day, it takes time to work out the kinks and figure out better ways to accomplish your goals. The Civil Rights Acts were passed over 10 years instead of trying to get it perfect the first time around.