Back in 2005, with my office overflowing with patients, I made the decision to drop out of Medicaid. I wasn't alone. At the time a national survey revealed that a full half of America's practicing physicians weren't accepting Medicaid. It was a necessary business decision. Medicaid was only paying me $30 for a new patient, $8 for a follow-up. Many of my elderly patients had Medicaid for a secondary insurance, and this 20% of the bill amounted to less than $2. At a time when my offices expenses were skyrocketing, it simply wasn't worth the time to ask my office biller to fill out and submit the Medicaid bills.

Nevertheless, it was a very difficult decision for me emotionally, as I was very connected to my patients. Rather than ask them to see another doctor, I decided to keep seeing them for free, or at a markedly reduced rate. My patient Marcus, a mentally challenged 40-year-old man with severe constipation, who worked part-time as a janitor, always came with his mother; I kept seeing him and she insisted on paying me $50 per visit. At the same time, I had several disabled patients who I was glad to see for their Medicare payments alone, and many elderly patients who would pay a small fraction of the 20% that Medicare didn't cover.

Overall I was much happier, as were my patients, and I had no urge to turn back the clock when Medicaid raised its rates slightly. Still, a significant problem remained. As more and more doctors dropped out of Medicaid, I found fewer specialists I could refer patients like Marcus to see. 

When his constipation worsened and he needed a gastroenterologist, I ended up referring him to Bellevue Hospital, where I had trained, and where he received good care from the G.I. residents in the clinic.

But Medicaid payments to hospitals have been cut drastically by the states, threatening the networks of residents and attending who take care of these patients. States have cut Medicaid payments both to universities (Graduate Medical Education that pays for residents), and to public hospitals themselves by many millions of dollars. In New York City, for example, last year Health and Hospital Corporation (which includes Bellevue) was cut by $105 million. This year the state is on the verge of cutting $370 million from the city's public hospitals (including $70 million in Medicaid reimbursements).

At the same time, if the current plan for government-run health care reform passes, we are facing an unprecedented expansion of Medicaid by 10-15 million more people. But who is going to take care of them if the networks we already have established are overwhelmed as it is and facing further cuts?

As it is, Medicaid is an insurance that is too easily overused. PriceWaterhouseCoopers, an accounting research firm, has determined that Medicaid patients are twice as likely to use the Emergency Room unnecessarily than the uninsured. This overuse generates expense, and Medicaid, like Medicare, is driving the country into bankruptcy.

But rather than address this problem, we are on the verge of adding many millions of more patients to this costly dysfunctional system.

Marc Siegel M.D. is an associate professor of medicine and medical director of Doctor Radio at NYU Langone Medical Center. He is a Fox News Medical contributor.

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Dr. Marc Siegel, a practicing internist, joined FOX News Channel (FNC) as a contributor in 2008..