why do state governments pay hospitals?

Question

I read this article in the NYTimes, and I don’t understand why hospitals are paid by states in the first place. Doesn’t Medicare pay individuals directly who then pay the hospital? Why the government middleman?

https://www.nytimes.com/2019/10/03/nyregion/medicaid-donation-hospitals-cuomo.html?smid=nytcore-ios-share

In: Other

Answer 1

>Doesn’t Medicare pay individuals directly who then pay the hospital? Why the government middleman?

No, that is not how insurance works for anyone. Insurance is paid directly to the billing entity. Imagine the quantity of fraud and misappropriation if Medicare or Aetna was sending around checks to people for $50k and telling them “make sure you pay the hospital with this money”.