How is it possible that no coverage could be better than government coverage? Roy explains that the burdensome paperwork requirements and low fees make Medicaid a headache for doctors:
It turns out that Medicaid’s problems aren’t just that the program underpays doctors. It’s also that the program is a huge hassle to work with, in terms of paperwork and billing requirements. It’s also that Medicaid reimbursement checks come late, and it takes a lot of effort on the part of busy doctors to track bureaucrats down for timely payment. An uninsured patient who pays cash is infinitely easier to deal with, even if the uninsured patient only pays $20 up-front for an office visit.
Clearly Medicaid is due for reform. Roy plugs the Coburn plan to block-grant Medicaid funds to the states. Based on this new evidence from the GAO, it seems as though any reform that moves the system closer to simply placing cash in recpients’ hands would be an improvement.