5 Myths Americans Believe About Medicaid — And Why They’re Wrong

Although Medicaid has made a difference in the lives of people like Jill, a young nurse, and Amy, a home health aide, plenty of misunderstandings persist about the program. This week in BeneStream’s “I Am Medicaid Expansion” blog series, we debunk the five most common myths about Medicaid.

In July 1965, President Lyndon B. Johnson signed H.R. 6675 into law, establishing Medicare and Medicaid. And even before Johnson put pen to paper, Medicaid was steeped in controversy.

At the Harry S. Truman Library in Independence, Missouri, where Johnson signed the bill, he remarked, “few can see past the speeches and the political battles to the doctor over there that is tending the infirm, and to the hospital that is receiving those in anguish, or feel in their heart painful wrath at the injustice which denies the miracle of healing to the old and to the poor.”

But while the same Johnson-era Medicaid myths persist, one thing has changed: Medicaid has been time-tested, delivering comprehensive care at low costs to millions of Americans.

Here are the most common myths that linger around this misunderstood program:

Myth #1: Medicaid beneficiaries can’t find providers that accept the government-sponsored coverage.

Perhaps the most pervasive misconception about Medicaid is that its recipients can’t find doctors who accept it.

But contrary to critics’ claims, research by the Urban Institute shows Medicaid recipients were just 1.3 percent more likely — after controlling for other socio-economic factors — to have trouble finding care than individuals with employer-sponsored coverage. While 11 percent of Medicaid recipients reported difficulty making an initial appointment, only 2.8 percent were ultimately unsuccessful.

That’s roughly equivalent to individuals with employer-sponsored insurance, and it’s a drastic improvement over individuals with no insurance whatsoever: Medicaid enrollees receive care twice as often as their uninsured counterparts.

So while access problems undeniably exist across in our nation’s healthcare system, the data shows Medicaid enrollees don’t experience significantly different barriers to care than any other population.

Myth #2: Medicaid offers low-quality care to its recipients.

Medicaid’s detractors love to argue that the program provides inferior quality care to its beneficiaries.

And while Medicaid isn’t perfect, its coverage is equal to or better than many employer-sponsored plans (and far better than the care most low-income workers are offered). Medicaid offers comprehensive insurance — including vision, dental, and pharmaceutical coverage — with almost no out-of-pocket costs.

That comprehensive coverage has led its recipients to report even higher satisfaction with Medicaid than those who purchased private insurance on healthcare exchanges. Furthermore, adults insured by Medicaid are significantly less likely than privately insured adults to report unmet needs for prescription drugs, mental healthcare, and medical care.

Myth #3: Medicaid is for the extremely poor, not working-class Americans.

More than 7 million Americans who didn’t have health insurance prior to the Affordable Care Act are now enrolled in Medicaid, with another 1.5 million applications currently under review.

Contrary to the myth, most of those enrollees aren’t out-of-work recipients, either. They’re young nurses like Jill, who struggled with medical bills after being hit by a distracted driver, and home health aids like Amy, whose daughter’s ear infections and son’s seizures put a strain on her pocketbook. They’re our favorite restaurant workers, bus drivers, schoolteachers, and millions more people in need of a helping hand with medical costs.

Like Jill and Amy, 20 percent of working Americans struggle with medical bills — 42 percent of whom are forced to take on extra work to make those payments. Thankfully, though, Medicaid keeps millions of Americans out of poverty annually, and it decreases recipients’ out-of-pocket medical spending from approximately $871 to $376 per year.

Myth #4: Medicaid expansion is too inflexible for state-by-state customization.

As of this writing, 32 states (including Washington, D.C.) have adopted the Medicaid expansion. Why haven’t the remaining 19 states expanded Medicaid? Their reasons vary, but many complain that the program is too inflexible for state-by-state customization.

For starters, many governors — such as Pennsylvania’s Tom Corbett — want to include work requirements or co-pays as conditions of Medicaid benefits. Other state governors have asked to limit Medicaid eligibility to less than 138 percent of the federal poverty level.

But the purported inflexibility of Medicaid expansion is a non-issue. States are welcome to adopt their own versions of the program, and the Obama administration has granted dozens of waivers that enable states to impose lockout periods, charge premiums, integrate wellness programs, and restrict certain types of coverage (e.g., non-emergency transportation).

Myth #5: Medicaid expansion is too expensive for states to adopt.

A sober look at the states that have expanded Medicaid contradicts this myth. The percentage of people who are uninsured has fallen, while medical costs in expansion states have risen more slowly than the nonpartisan Congressional Budget Office predicted.

This has benefited states such as Kentucky, which found that the more people use Medicaid, the less they’ll use other state-funded healthcare resources. In fact, Kentucky’s estimated Medicaid expansion will improve its bottom line by $819.6 million between 2014 and 2021.

And Oregon’s Medicaid expansion has extended healthcare to more than 472,000 additional residents, contributing to a 40 percent drop in uninsured individuals between 2013 and 2014. Between 2014 and 2015, Medicaid expansion saved the state roughly $275 million in healthcare expenses.

So no, Medicaid isn’t reducing access to care, bankrupting states, or encouraging poor-quality care. Instead, it’s helping millions of previously uninsured Americans proudly say “I am Medicaid expansion,” and it’s saving states hundreds of millions of dollars in the process. Even half a century later, Medicaid truly is helping to create the “Great Society” that Johnson had dreamed it would.