Medicaid Politics and Policy 1965–2007

Perhaps only a political and policy enthusiast like me would really enjoy this book. It is a 400-page history of the federal and state Medicaid program since its inception in 1965. Medicaid has grown unevenly, often uncontrollably, and sometimes unpredictably in many different program areas and states without much direction or corrective action on the part of the federal government. It began as an add-on to public assistance and is essentially a program of "welfare medicine."

The underlying theme of the book is that Medicaid is a "weak entitlement," both morally and institutionally. It is weak on moral grounds because of its close association with public welfare; it reflects our cultural attitudes toward poor people, women, and people from racial minority groups. Medicaid recipients have not paid into an account like Social Security beneficiaries have; and unlike veterans, they are not owed anything by our country at large. It is weak institutionally because it has neither a trust fund nor an administrative equivalent of the Social Security Administration with its large bureaucracy and political defenses. The major strength of Medicaid has been the program's flexibility to take care of a wide range of medical and associated social services, but because of the tendency to expand, a steady growing enrollment, greater benefits coverage, and higher total expenditures, it has consumed increasing proportions of state budgets and federal expenditures. As a result, the Medicaid program today is under siege.

This book describes the great divide in the Medicaid program between the frail elderly population, people with chronic illnesses (including mental illnesses), persons with disabilities, and the rest of the population (which includes pregnant women, children, and the working poor). Frail elderly persons and those with chronic illnesses amount to only 30% of Medicaid enrollment but account for 70% of the expenditures. In many respects, this group is uninsurable and would not have access to expensive medical services if not for Medicaid. Balancing the commitment of Medicaid to this needy and most vulnerable population with the concern for the working poor is an ongoing policy concern. It has become a political football game as the Medicaid program has come up for renewal and revision in the U.S. Congress. The title of this book includes the terms "politics" and "policy," and there are reasons for this. Policy helps us understand what is at stake, and politics helps us understand what is possible.

For persons with mental illness, the Medicaid program is now the "safety net" for many institutional and community-based services. The book describes in some detail the history of the "IMD exclusion," the reason why Medicaid excluded patients in institutions from receiving payments because of the traditional responsibility of the states to take care of these individuals in state hospitals. In more recent years, Medicaid has been used by many states through waivers for case management, community support, and preventive care. Without Medicaid, many of these services would be discontinued, and given the dramatic downsizing of psychiatric beds, more individuals would find themselves without any hope for care and treatment. This would only add to the already prevalent public health problem of persons with mental illness who are homeless or incarcerated.

Unfortunately, the book does not deal with the mega-policy of national health reform and the potential of a major health care financing overhaul in this country in order to cover the uninsured and to provide uniform benefits for every American. The authors' view is that national health insurance would be very limited and modest and have little impact on Medicaid. As we enter this new election cycle, one hopes for a new opportunity for a comprehensive overhaul of our fragmented health care system.