The current Medicaid program is a jointly funded federal and state cooperative agreement to care for the most vulnerable in our country – children born into poverty, those who are blind or disabled, and the elderly.

Coverage is guaranteed if eligibility criteria are met, and the coverage is comprehensive, including medications, hospitalizations, behavioral health and long term care.

In Hawaii, over 340,000 residents are currently enrolled in the Medicaid program, mirroring the nationwide rates of approximately 25 percent of the population. There are two versions of Medicaid in the islands: the fee-for-service program and the privatized managed care program known as Hawaii Med-QUEST.

These programs are considered entitlements, and anyone who qualifies is guaranteed to be covered.

Both use a combination of federal and state funds to provide care for their enrollees. In Hawaii, for every $1 spent from state funds, the federal government chips in a slightly higher rate of $1.22. Currently there is no cap on the federal funding amount.

President Trump and his cabinet are looking at a change in Medicaid funding. Two major options have been proposed. The first is a block grant mechanism, with few further details available so far. In this proposal, states would receive a certain fixed dollar amount to provide for care for those in both Medicaid programs and would be given more control over how those funds are spent. There would be an increase for overall inflation, but no additional amount proposed for the rising cost of care.

The second type of funding is per capita, based on the numbers of people enrolled, and historical costs of care.

The objective is to lower the federal government’s Medicaid spending. Based on the March 2016 budget resolution, the total amount of Medicaid spending is supposed to be decreased by 41 percent by 2026.

However, there can only be one result if the federal funding goes down and the number of enrollees is unchanged: more spending on the state level, funded by state taxpayers.

Block grants or a per capita limit would be disastrous in Hawaii for several reasons.

First of all, we don’t have enough doctors to handle the numbers of residents regardless of insurance status. University of Hawaii Manoa statistics show that there is an estimated 500 fewer doctors across the state. Neighbor islands are particularly affected by a lack of specialty care available in addition to lower access to primary care.

This doctor shortage is well known, and as more providers age into retirement, despite the efforts to increase the numbers of medical school slots, there will still be a shortage into the next decade or longer.

Secondly, although many are loathe to admit it, the practice of medicine is a business. In order to stay afloat, providers need to be paid, and Medicaid pays the least of all of the insurance providers in the state. Statistics show that the reason the rate of medical inflation for the Medicaid plan is lower than that for private insurance is because of  lower payments to providers. That includes not just doctors, but also hospitals, nursing homes and all other care providers as well.

These first two facts are well known, and Hawaii is not alone struggling with the need for more providers and lack of adequate reimbursement. Nationwide, patients with Medicaid insurance are having the same problem finding available doctors.

Private doctor offices have no reason to open their doors to those whose insurance pays the lowest rates of reimbursement. This leaves the few who do take Medicaid handling the bulk of this patient population. In a study done by the Department of Health and Human Services, even with a list of participating providers, more than half were unable to accommodate patient requests for appointments, and this study was done before the latest Medicaid expansion.

The consequences of the proposed changes to Medicaid don’t just affect poor children, or poverty-stricken working age adults. Hawaii has a growing number of elderly people who are more likely to require assistance as they get older. Statistically, for someone 65 or older today, there is a 68 percent chance of needing long-term care due to cognitive impairment or becoming disabled in at least two activities of daily life.

When this happens, patients are often placed in nursing homes or private care facilities. Average yearly costs for care can be upwards of $100,000. Who pays for this? Without private long-term care insurance, patients must use all of their assets to pay for their care. Once that is exhausted, taxpayers foot the bill when the elderly require long-term placement for nursing home care.

Nationwide, two-thirds of all nursing home residents are on Medicaid. With an increasing number of senior citizens in Hawaii, that cost of care could exponentially expand with no increased federal dollar commitment under a block grant system and inadequate payments to providers in a per capita system.

If the proposal for block grant funding and/or per capita funding for Medicaid passes, each state will be left to cover any shortfall from a federally mandated program. Costs for medical care are not going to go down in the future, and as the population ages, the demand for funding can only go up.

At some point, state legislators will be forced to make tough choices about coverage for children, the blind, the disabled, and the elderly, in an attempt to save money to keep the program in operation. Everyone in the state will be affected, as any additional need for Medicaid funding beyond the federal granted amount will have to come from taxpayers.

That’s bad news for all of us, no matter how we are insured.