Monday, August 15, 2005
Welfare reform as a model for Medicaid reform
[Mary Katherine Stout, "Ending The 40-Year Entitlement," The Texas Public Policy Foundation, 29 July 2005.]
In this recent column, TPPF health care policy analyst Mary Katherine Stout points out that Medicaid is not the first goverment program that needed to scale back from being an open-ended entitlement to return to its role as a safety net for the truly needy:
In 1996, the United States Congress passed landmark welfare reform legislation, making it the most sweeping entitlement overhaul this country has ever seen. Today, nearly ten years after Congress’ bold action, the lessons of welfare reform should serve as the blueprint for reforming Medicaid, an even bigger entitlement program threatening state budgets across the country.
As Medicaid celebrates its 40th birthday, it has become a government leviathan, devouring state budgets and leaving taxpayers bracing for the future. Although eligibility was originally limited to those qualifying for welfare’s cash assistance, the Medicaid program has grown to encompass a growing number of people and services.
Now, states are desperate for Medicaid reform to control costs and rid the program of rigid federal requirements. The path for achieving these reforms is clear: end the entitlement and give states greater flexibility.
Welfare reform changed the way federal funding came to the state by giving the state a fixed amount of money to run their program, and providing bonuses to states achieving high performance. Medicaid reform should take the same approach by prioritizing spending, and establishing broad goals for performance. States must have significant authority to tailor the program to fit their needs, and wide latitude to better align Medicaid with other government assistance programs.
What’s more, Medicaid must be a program with reciprocal obligation. Medicaid recipients should share in the cost of their care by paying meaningful monthly premiums and copayments. Since 1982, copayments have been limited to a nominal amount of no more than $3, in most cases.
Although median family income today tops $43,000 and a stamp costs 37 cents, Medicaid’s copayments are effectively frozen in 1982 – when median family income was just over $20,000 and a stamp was 20 cents.
Many of Medicaid’s fiercest advocates are already objecting to suggested reforms that would control spending, taking particular exception to increased cost sharing. Such a position defies reality and reason.
Welfare reform successfully restored the idea that government assistance doesn’t come free or without obligation; a concept most Americans understand whether they are working for a paycheck or paying for a doctor visit.
Medicaid reform must tackle the entitlement and provide states the flexibility they need while giving recipients greater responsibility over their lives.
[Matthew Hisrich, "A Backgrounder on Kansas Medicaid," The Flint Hills Center, 19 July 2004.]
[Mary Katherine Stout, "Ending The 40-Year Entitlement," The Texas Public Policy Foundation, 29 July 2005.]
In this recent column, TPPF health care policy analyst Mary Katherine Stout points out that Medicaid is not the first goverment program that needed to scale back from being an open-ended entitlement to return to its role as a safety net for the truly needy:
In 1996, the United States Congress passed landmark welfare reform legislation, making it the most sweeping entitlement overhaul this country has ever seen. Today, nearly ten years after Congress’ bold action, the lessons of welfare reform should serve as the blueprint for reforming Medicaid, an even bigger entitlement program threatening state budgets across the country.
As Medicaid celebrates its 40th birthday, it has become a government leviathan, devouring state budgets and leaving taxpayers bracing for the future. Although eligibility was originally limited to those qualifying for welfare’s cash assistance, the Medicaid program has grown to encompass a growing number of people and services.
Now, states are desperate for Medicaid reform to control costs and rid the program of rigid federal requirements. The path for achieving these reforms is clear: end the entitlement and give states greater flexibility.
Welfare reform changed the way federal funding came to the state by giving the state a fixed amount of money to run their program, and providing bonuses to states achieving high performance. Medicaid reform should take the same approach by prioritizing spending, and establishing broad goals for performance. States must have significant authority to tailor the program to fit their needs, and wide latitude to better align Medicaid with other government assistance programs.
What’s more, Medicaid must be a program with reciprocal obligation. Medicaid recipients should share in the cost of their care by paying meaningful monthly premiums and copayments. Since 1982, copayments have been limited to a nominal amount of no more than $3, in most cases.
Although median family income today tops $43,000 and a stamp costs 37 cents, Medicaid’s copayments are effectively frozen in 1982 – when median family income was just over $20,000 and a stamp was 20 cents.
Many of Medicaid’s fiercest advocates are already objecting to suggested reforms that would control spending, taking particular exception to increased cost sharing. Such a position defies reality and reason.
Welfare reform successfully restored the idea that government assistance doesn’t come free or without obligation; a concept most Americans understand whether they are working for a paycheck or paying for a doctor visit.
Medicaid reform must tackle the entitlement and provide states the flexibility they need while giving recipients greater responsibility over their lives.
[Matthew Hisrich, "A Backgrounder on Kansas Medicaid," The Flint Hills Center, 19 July 2004.]
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