The Mess in Medicaid

Medicaid and Medicare. Few words relating to America's health have been mouthed so often since Congress wrote them into law in 1965. Yet few Americans understand them. As a consequence, the Department of Health, Education and Welfare has printed 550,000 copies of a deliberately cute, three-color booklet entitled MEDICAID--MEDICARE--Which Is Which? Medicare, it points out, is a federal program and is the same all over the U.S. Medicaid, on the other hand, is a federal-state partnership under which states design their own programs. How widely these vary and how grave are their defects became clear last week as Medicaid passed its fourth birthday.

Whereas Medicare has drawn predictable criticism for costing more than was estimated and invited abuse by a few unscrupulous doctors, dentists and druggists, it is in general a successful and effective program. Not so Medicaid, which is a shambles at both the federal and state levels.

Patchwork Program. In Washington, Medicaid is a headless monster. To the extent that it is run at all, it is controlled by one of the most cumbrously named offices in government: the Medical Services Administration of HEW's Social and Rehabilitation Service. Its commissioner, Dr. Francis L. Land, was summarily dropped from the post last July at the height of congressional criticism over Medicaid's failings. The Administration has still not replaced Land.

Congress designed Medicaid as a patchwork program. Each state could join after its plan was approved by HEW. The minimum benefits, which every state must provide for all "public assistance" (meaning welfare) recipients, are 1) in-and out-patient hospital care, 2) other laboratory and X-ray services, 3) nursing-home treatment and physicians' services. The patient's eligibility depends on the state's definition of need. That may be anywhere between $2,448 family annual income, as in Oklahoma, and $5,000, in New York.

Enmeshed in Tape. Through 1969, Wyoming was the only state offering nothing beyond minimum benefits and only to welfare families. Forty states had operating plans offering additional services such as dental care, prescription drugs, home health care, eyeglasses, clinic services and a variety of diagnostic services. No two states had all the same benefits for the same type of people. In 22 states coverage had been extended beyond the welfare population to the stratum classed as the "medically needy" --those who can subsist only if they have no doctors' or hospital bills to pay.

It is largely in determining what constitutes medical indigence that many state plans have become hopelessly enmeshed in red tape. In New York, which ranks with California as one of the two most liberal states, an applicant for medical-indigence status must supply information about the annual income of each family member, the total of savings, stocks, bonds, and the cash value of insurance policies, including dividends, Social Security payments, and contributions from legally responsible relatives. The applicant should then receive a qualifying card, which is valid for no more than a year, during which time the whole process has to be repeated at least once.

Inflation and Fraud. The Federal Government reimburses 50% of Medicaid costs to the richest states, and up to 83% to the states with the lowest per capita income. Despite this bait, some of the poorer states have been in no hurry. Only seven were ready to go when Medicaid became operable in January 1966; before the year was out, the total was 26. By the end of 1969, 15 others were operating. To overcome the foot dragging, the Federal Government stipulated that any state which had not submitted an acceptable plan by Jan. 1, 1970, would forfeit federal funds for medical aid to dependent children, the blind, and those otherwise disabled. As a result, seven states got in under the wire last week: Alabama, Arkansas, Florida, Indiana, Mississippi, New Jersey and North Carolina. That leaves two holdouts, Alaska and Arizona, which fear that their large Indian population might cost them more if they choose Medicaid instead of their present reservation medical programs.

Medicaid costs have skyrocketed partly because virtually all the states exercise little control over the services rendered or the fees charged. (Connecticut and Illinois have better-than-average management.) Costs have been inflated by some blatant fraud, but HEW officials say this bothers them less than overcharging, which is both more extensive and harder to detect. Perhaps the biggest single cost-boosting factor has been the rise in doctors' and hospital charges throughout the U.S.

The annual federal cost of Medicaid has gone up from an estimate of $1.6 billion made in late 1967 to $2.4 billion by the spring of 1969 and $5.5 billion today. The original Medicaid law contemplated, but did not specifically command a gradual and orderly expansion of state plans so that by 1975 every American meeting eligibility requirements would get comprehensive medical care. The target date has now been set back to 1977. By then, if the planners' hopes are fulfilled, Medicaid should be making care available to many more than the 10 million Americans now covered. And the benefits should be vastly superior to the present crazy-quilt, costly and largely inadequate care.

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