Now Obamacare is Crippling…Family Planning?

California has very generous funding for family planning
clinics, serving people under 200 percent of the federal
poverty level. California also has really crappy funding for
Medicaid, the federal-state health program for low-income families
and children; the state recently cut reimbursement rates to

providers and
pharmacies by ten percent. That’s a bit of a problem, as the
Affordable Care Act—Obamacare—pushes
more and more people toward Medicaid. In particular, it’s a
problem for California’s family planning clinics, which are
expected to start seeking reimbursement from Medicaid instead of
from the old Family PACT program.

According to
Kaiser Health News:

For the last 15 years, such clinics have been paid through a
robust state program called the Family Planning Access Care and
Treatment Program, or Family
PACT. It is the first and largest program of its kind, covering
the cost of family planning services for nearly 2 million uninsured
women and men, with no cap on spending. Nearly 60 per cent of
Planned Parenthood’s income is from the program. But this year, its
revenue streams are going to start shifting dramatically: 84 per
cent of the clinic’s patients became eligible for Medicaid, or
Medi-Cal as it is known in California, on Jan. 1, because of the
expansion of care for the poor under the federal health care
reform.

Quoting Kathy Kneer, the president and CEO of Planned Parenthood
Affiliates of California, the article says “clinics will lose money
on every Medicaid patient.”

Isn’t there an old joke about losing money on every sale and
making it up in volume? Yeah, it’s a bit of a dark joke.

Physicians in general already face this problem. When the latest
Med-Cal rate cut was announced, Bloomberg
pointed out that a gynecologist in Folsom, California was paid
$95 to $200 for pelvic exams by private insurance, but $25 by the
state plan even before the ten percent haircut. As a
result, just 57 percent of California physicians accepted new
Medi-Cal patients in 2011, which was the second-lowest rate after
New Jersey. That rate is unlikely to rise with the lower
reimbursements, even as 1.1 million Californians were expected to
join the Medi-Cal roles as part of the Obamacare grand plan.

California Healthline
quoted Jon Roth, CEO of the California Pharmacists’
Association, saying, “The margin in drug products is roughly two
percent to four percent. If you’re looking at a 10 percent
reduction, you’re immediately upside down and dispensing medication
at a loss.”

The solution? Many pharmacies say they won’t provide medications
on which they take a big loss. Pharmacies in other states have

flat-out refused Medicaid patients, so this shouldn’t come as a
surprise.

California’s Family PACT program may well have been too generous
to begin with—especially in a state with long-term financial
difficulties that it’s still
just papering over. But at least that scheme paid for services
rendered. That stands in stark contrast to the Affordable Care
Act’s promise of expanded services which governments are already
unable to afford to an ever-widening pool of recipients who are
bound to be disappointed.