Proposed health cuts may limit access further

A new government proposal would cut reimbursement rates for doctors who accept Medicare by 30 percent in 2012. And hundreds of billions of dollars in reductions in both Medicare and Medicaid are on the table now as the Obama administration and Republicans negotiate over the budget.

The potential cuts are raising concerns for the more than 100 million Americans who rely on the programs, as well as the doctors who treat them.

Dr. David Ansell, author of "County: Life, Death & Politics at Chicago's Public Hospital" and chief medical officer of Chicago's Rush University Medical Center, is one of those doctors.

He told CBS News, "People are dying because they don't have simple access."

For more than 30 years, "Early Show" Consumer Correspondent Susan Koeppen reported, Ansell has been treating patients who couldn't get help anywhere else.

"I've always taken patients regardless of their ability to pay," he said.

Ansell says he's seeing a growing number of patients with Medicaid or Medicare who just can't find physicians willing to treat them. He says the main problem is the government's low reimbursement rates.

"I don't fault the doctors," Ansell said. "I fault the system."

One study by the Colorado State Task Force found that a doctor earning $100 through private insurance would be paid about $71 through Medicare, and only about $50 through Medicaid.

Ansell said, "Doctors just want to see patients, but they also want to be paid fairly."

One of Ansell's patient, 64-year-old Wallace Harris, came to him when he had nowhere else to turn.

Harris said, "Some specialists, they just refuse to accept my Medicaid card."

Some would consider Harris a hero, Koeppen said. He was shot while trying to help a woman who was being attacked.

Harris told CBS News, "I've worked over 50 years in this country and I've paid taxes. So why shouldn't I have some kind of benefit when I need it?"

And it's not just Medicaid. Jean Callahan, a 73-year-old retired school teacher, suffers from kidney disease. She thought being on Medicare meant she would be protected.

"Medicare is our insurance," Callahan said. "And for people to reject it, I felt stymied. I just felt hopeless."

"The Early Show" wanted to find out how widespread the problem is, so we called 40 primary care physicians at random across the country. Ninety-five percent told CBS News they accept new patients with private insurance. And most - 78 percent - still accept Medicare patients. But only 13 percent said they would see patients on Medicaid.

Ron Pollack, executive director of Families USA, an advocate for health care consumers, said the results didn't surprise him at all.

Pollack remarked, "Clearly, we have a crisis right now with respect to Medicaid."

But health care providers on the front lines, like Dr. Ansell, are concerned that, with more cuts on the horizon, the crisis could spread.

Pollack said, "The first baby boomer hits 65 this year. There's going to be 78 million baby boomers, and they are going to come flooding into this health care system. And we ain't seen nothing yet."

Meanwhile, a first-of-its-kind study released just last week found Medicaid benefits low-income people physically, psychologically and even financially. The study was conducted on 10,000 low-income, uninsured adults in Oregon who were randomly selected in a 2008 state lottery to accept additional people into its Medicaid program. The health outcomes of these people were compared to the 80,000 applicants who weren't selected in the lottery.

The findings, published on July 7 as a working paper on the website of the National Bureau of Economic Research, shows adults with Medicaid coverage were 25 percent more likely to report they were in good to excellent health, and 10 percent less likely to report being depressed.

Those with Medicaid coverage - as compared to uninsured people - were 40 percent less likely to have to borrow money or skip paying other bills to pay for health care. In addition, the same group was 25 percent less likely to have an unpaid medical bill sent to a collection agency.

As for the cost, Medicaid coverage increased the likelihood of outpatient care by 35 percent, the use of prescription drugs by 15 percent, and of hospital admission by 30 percent, which leads to about a 25 percent increase in annual health care spending.