Why Medicaid Funding Will Always Encourage Musical Chairs

Companies and cities/states regularly jockey for federal Medicaid money. They will often twist themselves into pretzels to grab as much “free” money as possible.

The Medicaid formula, where the federal government matches or exceeds the monetary amount allocated by the state, encourages musical chairs. That is, state and city governments work hard to acquire Medicaid money to ensure matching federal funds (“free”) even when that means cutting expenses somewhere else…or raiding other revenue sources. 

This opinion piece  accuses the governor of Louisiana of plundering the state’s Medicaid Trust Fund for the Elderly to subsidize campaign contributors who operate private nursing homes. The subsidies (if true) would offset the cuts to reimbursement that Medicaid made in 2011.

The piece mentions in passing that Louisiana nursing homes are due to receive $893 million in state and federal Medicaid money in fiscal year 2014. The Trust Fund is supposed to contribute $184 million of that, which in turn was responsible for “attracting” $500 million.

Is it any wonder that funny things happen when so much money is at stake? The payment system encourages fiscal gimmickry.

This second piece is about elderly in Northern Kentucky moving across state lines to take advantage of Ohio nursing homes. Although the number of people doing this is small (90 in 2011) the cost is significant. An extra $6 million added to Ohio’s Medicaid bill. A referral agency estimated that 10-20 Kentuckians cross into Ohio every month so they could get into a nursing home.

Kentucky’s rules for Medicaid funding for nursing home patients  is a lot more stringent than Ohio’s. As such, there are a lot fewer available beds in Kentucky than there are in Ohio. The Ohio River divides the two states.

If the federal government stayed out of Medicaid there wouldn’t be so many politicians rearranging the deck chairs on the Titanic (which is what the LA state budget looks like). Liberal states like Ohio would still attract those wanting more social services, but they’d cut back if the influx threatened to overwhelm them.

Currently, states fund their budgets with debt so the public isn’t asked to contribute directly to Medicaid. If debt is ever abolished, Medicaid would be cut drastically. Nursing homes would need to increase their charitable intake tremendously. Until then, Medicaid musical chairs will continue.

One thought on “Why Medicaid Funding Will Always Encourage Musical Chairs

  1. Pingback: Why Would a Nursing Home Association Support Taxing Its Members? | Senior Care stuff

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