Join us today! The Bluegrass Institute is releasing a new report, entitled “An Unsustainable Path: The Past and Future of Kentucky Medicaid Spending, ” at a policy briefing today, June 29, at 12:30 p.m. in Room 248 of the University of Kentucky’s Carol Gatton Business and Economics Building.

You can now view a full copy of the report here.

Medicaid is on an unsustainable path towards fiscal disaster, putting Kentucky’s most vulnerable citizens at risk.

Today, 2 out of 3 children on Medicaid are denied appointments with specialists, compared to only 1 in 10 privately-insured children. Without essential, sweeping reform, Medicaid will continue wasting Kentucky’s resources on a grossly overexpanded enrollee base while failing in its fundamental mission of providing access to health care for the truly impoverished.

“I think the evidence suggests it’s time to turn to more fundamental reforms instead of piecemeal fixes,” said the report’s author, John Garen, Ph.D., Gatton Endowed Professor of Economics at the University of Kentucky and a Bluegrass Institute adjunct scholar.

Co-sponsored by the Bluegrass Institute and the BB&T; Learning Laboratory on Capitalism, the policy briefing is free and open to the public.

All media inquiries should be directed to Jim Waters, Vice President of Policy and Communication, at jwaters@freedomkentucky.com.

One of the most significant reforms of the Patient Protection and Affordable Care Act (PPACA), commonly referred to as Obamacare, is the expansion of Medicaid to 133 percent of the Federal Poverty Level. Since the bill’s passage, many studies have surfaced showing poor health care access and outcomes for patients with Medicaid.

We’ve written recently on a study by the New England Journal of Medicine (NEJM) that found children receiving health care coverage through Medicaid were far more likely to be denied by a specialist than children with private insurance.

Now the government wants to prove the same thing. The New York Times reported yesterday that the Department of Health and Human Services (HHS) will begin a new project posing secretly as patients to determine how difficult it is to get access to care when on government health insurance programs, Medicaid and Medicare.

The question remains, why is HHS conducting a study so similar to that of the NEJM and others?

Thomas Lifson of American Thinker surmises, “It is all too easy to see where this is leading. Having expanded demand without addressing the supply of doctors, and paying less for that expanded demand than market prices, the Obama administration needs a fall guy, and doctors fit the bill.”

This past spring during the budget showdown in Frankfort, Kentucky’s Center for Health and Family Services (CHFS) and the Department for Medicaid Services (DMS) issued a public notice warning of proposed cuts to provider reimbursements. If the governor’s plan to borrow funds from next year’s Medicaid budget was not passed, DMS threatened to cut reimbursement to providers by 35 percent. The public notice was only available online for a short time.

The Bluegrass Institute issued an Open Records Request to view these proposed cuts again. We recently received a response from CHFS providing a copy of the public notice.

Here’s what you’ll find in the document: if you’re a health care provider, you’re in trouble. Across the board, providers would face 35 percent reduction in reimbursements for Medicaid patients. Medicaid currently pays less than both Medicare and private insurance.

Next week, we will release a study on Medicaid spending in Kentucky, and this year’s Medicaid budget deficit is only the beginning of our problems. The state and its health care providers will be faced with increasingly difficult choices to make.

Unfortunately, instead of working with providers to improve the efficacy of Medicaid, the state has already determined which areas they’re going to cut.

These cuts will turn treating Medicaid patients into a losing proposition for providers, who will have to choose between accepting Medicaid and staying in business; as a result, the most needy Kentuckians are the ones who will suffer.

This week, Health and Human Services (HHS) cut premiums in 17 states by 40 percent for individuals with pre-existing conditions. Kentucky is one state that will see these premiums decline.

One reason for the cut is the low enrollment in the law’s Pre-Existing Condition Insurance Plan. To date only 18,000 Americans have signed up for the plan, while the government had predicted that 375,000 Americans would enroll in this plan in 2010.

The question remains, why have the numbers for enrollment in the high-risk pool remained so low? Will the federal government’s incentives be enough to move hundreds of thousands to this plan? And beyond that, what will the impact be to the private insurance market, specifically in Kentucky?

Is this the type of reform that will drive costs down and spur innovation in the market? The federal government’s increasing role in our health care should cause concern. In Kentucky, we remember the failed state-run experiment in the 90′s all too well.