Maybe "Low" Medicaid Rates Are What We Should Be Paying To Make Health Care Affordable For All

I recently read a comment on social media from a doctor equating accepting Medicare and Medicaid to (a doctor) signing her slavery agreement. And as insulting and inaccurate (slaves didn't sign agreements!) as this statement is, the sentiment is not too far off from what many doctors in America share. Doctors often refer to Medicaid as charity work.

The claim that Medicaid reimbursements do not cover the cost of care is near universal.
Some specialists claim they make about $8/hr. treating Medicaid enrollees. Others publish a sampling of their Medicaid reimbursement payments online to show Medicaid paying less than $5 for care billed at $400. Of course, they never share all of the information about a claim, just enough to "prove" their narrative of poverty inducing Medicaid rates.

physician complaints about Medicaid are the same as the ones they have about private insurance; they just hate Medicaid (and Medicare) more because of the lower reimbursement rates. For all payers, doctors complain about jumping through hoops to get paid, late payments, paperwork, and regulations. Some doctors have also complained about the behavior of Medicaid patients (don't exactly know what they mean by that).

Unfortunately, doctors and hospitals can get away with their Medicaid-rates-are-too-low claims because they are the ones setting the rates. And, as we know, they charge different rates for different groups of patients—Medicare, Medicaid, patients with private health insurance, patients without private health insurance, etc. But these rates aren't related to actual costs because a doctor's time and effort are never measured. So doctors cannot prove Medicaid rates don't cover the cost of their services. Still, that doesn't stop them from demonizing Medicaid, but the reality is that doctors don't like any program or law that controls the fees they can charge or requires them to meet certain standards.

Brief Primer On Medicaid Reimbursement Rates

Medicaid is a federal health insurance program for low-income adults, children, disabled adults and pregnant women. As of December 2016, Medicaid had 69 million enrollees. Medicaid is administered by the states in accordance with federal government program requirements. The federal government and states supply funding for Medicaid.

States, with federal government approval and in accordance with federal requirements, establish their own Medicaid provider (doctors/hospitals/care centers) reimbursement rates. States publicly announce their Medicaid rates annually or every two years, letting providers know what rates they will pay for all medical care procedures. Rates differ based on geographical region and other factors. State Commissions hold a comment period before rates go into effect. Rates may increase, decrease or stay the same from year-to-year. Citizens can log onto their state's health and human services department website and view Medicaid rates. (Some of the rate information is just interesting to see, but it also counters physician claims of $1 reimbursements for care billed at hundreds of dollars.)

Doctors must apply to treat Medicaid recipients and submit quality data to receive certain rates.
According to a recent survey from The Physicians Foundation, about 63.7% of doctors treat Medicaid patients.

Medicaid Rates And Health Care Reform

America is a very rich country, and we can provide health insurance to all citizens; it's just a matter of having the will to do so. However, and despite our enormous wealth, I can't imagine a situation where America can continue to absorb ever-increasing and obscenely high medical care prices. We will need medical care price controls to prevent health insurance costs from devastating our economy. Government-set Medicaid reimbursement rates are just one option of setting medical care prices to a more affordable level.

Maybe Medicaid rates are too low and don't cover the cost of care, but maybe they are just where they ought to be, given the
actual cost of medical care. Maybe doctors and hospitals need to reduce costs in other areas and accept lower reimbursement rates that are more in line with what the rest of world charges for the same or better care.


In America, we treat doctors like rock stars, so it's no surprise that some of them often act the part. Criticize a doctor for any reason, legitimate or not, and you'll be met with a wait until you need us response. We will all need medical care, and that is their job, so we should expect them to be there when we need them. But we shouldn't expect to pay what most people admit are outrageously high medical care prices in comparison to what's charge throughout the world.

We can't afford to blindly accept doctors' assertions that Medicaid rates are too low or don't cover cost. At least not without insisting they make an effort to lower expenses and provide some measure of the cost of care.

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