• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • More Bold Proposals to Solve the Medicaid Crisis

    Successful health care reform requires bold changes, not more of the status quo. Nowhere is this truer than in the case of Medicaid, the federal-state partnership to provide health care to the poor and disabled. Unfortunately for taxpayers and program beneficiaries, this was neglected by Obamacare. The new law leaves failing policies in place while expanding the program to cover more than 20 million new individuals. This will only exacerbate existing problems.

    Despite the bad policies that are now law under Obamacare, some in Washington continue to recognize that Medicaid is in crisis mode, pushing for reform to reduce the program’s burden on taxpayers while improving its quality. Last week, Senators Tom Coburn, M.D. (R–OK), Richard Burr (R–NC), and Saxby Chambliss (R–GA) introduced legislation to give states flexibility to fix Medicaid.

    Medicaid is on an unsustainable path and promises to consume a growing portion of state budgets and increase deficit spending. In response, state legislators have begun to aggressively seek ways to reduce the program’s cost while also improving it. But due to federal mandates and bureaucratic barriers to change, this is easier said than done. Both the stimulus and Obamacare enacted maintenance-of-effort (MOE) requirements that restrict states from altering Medicaid eligibility. Moreover, states must apply for waivers from the Department of Health and Human Services (HHS) to make significant changes to the programs—a lengthy and often unsuccessful endeavor.

    States are thus left with few tools to reduce spending: They can reduce provider reimbursements, reduce benefits covered under the program, or raise taxes. Medicaid payment rates for physicians are already about 58 percent of private insurance rates, severely reducing access to primary care physicians and specialists. The result is a low-quality program where beneficiaries are even more dependent on emergency room care than the uninsured. In sum, Medicaid has become an expensive and poorly performing program, yet states have their hands tied and cannot address the causes.

    The Coburn–Burr–Chambliss proposal would give states a capped allotment to provide coverage for specific members of the Medicaid population: pregnant women, low-income children and families, and the long-term care services received by low-income elderly and disabled. Funding would be based on the number of residents living in poverty and would grow with increases in costs and population. This system would be more equitable than the existing one and would remove incentives for states to grow their programs to unaffordable levels simply to obtain more federal funding. No changes would be made to funding for acute care to low-income elderly and disabled Americans. Finally, the proposed legislation would do away with the restrictive MOE requirements and repeal Obamacare.

    In our own reform proposal, The Heritage Foundation suggests going even further. We also start by repealing Obamacare. Then, we move moms and kids currently dependent on the failing Medicaid program out of Medicaid and provide them with financial assistance to buy the same private health insurance as other Americans. We then refocus Medicaid to cover the low-income elderly and disabled—creating a true safety net program—while providing states with a capped federal allotment to experiment with better ways to meet the needs of Medicaid’s most vulnerable population without unnecessary, burdensome federal obstacles.

    This approach would focus Medicaid on those individuals for whom a safety net is needed, move working families into private health insurance, and alleviate the unsustainable burden on state and federal taxpayers to fund a failing Medicaid program.

    Posted in Obamacare [slideshow_deploy]

    4 Responses to More Bold Proposals to Solve the Medicaid Crisis

    1. Joseph F. Page, Troy says:

      The problem with this solution is cost. The average health insurance cost for a family in Michigan is about a thousand dollars a month. Before this reform can work, the cost of health insurance MUST be reduced. I propose that the federal government agree to pick up 100% of the cost of catistrophic healthcare costs (say the annual amount over $20,000 per person) and thus put a relatively low cap on the health insurance coverage. To pay for this, completely remove all tax deductability/exclusion for health insurance and health care costs. It the high-cost health care that drives up the cost, so let the government pay for it and also step in to reduce these costs throgh steerage to the most efficient, high quality, centers of excellence.

    2. Bria , New Hampshire says:

      To name a few:

      Fix Medicaid by prosecuting ALL the Medicaid fraud and imprisoning or deporting offenders. Make sure this process is swift and aggressive. Eliminate redundant and overpaid positions within the Medicaid organization and actually streamline the process to be quicker, leaner, and cheaper. Also standardize the process for eligibility but more importantly, verify they qualify. Disability qualifiers must be more robust and need to be implemented with real checks and balances. In many cases Disability is overused and abused by people that are able to work.

    3. R Schloemer says:

      So, do you think we might be able to shore this up if we just figure out how the Canadians do it? After all, they manage to have a similar level of care at 1/10th the cost…

    4. Bogdan V. says:

      I don't have any type of health insurance. I am an employee and have to pay for medicare. Why should I have to pay for someone else's health while my own health is in jeapordy everyday? Who are those people that they are better than me? Let them fend for themselves like anybody else has to. That goes for social security, welfare, public housing, etc.

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.