Monday, July 31, 2006
Does Kansas get its share of federal Medicaid funding?
[Pamela Villarreal, "Federal Medicaid Funding Reform," NCPA Brief Analysis No. 566, 31 July 2006.]
A new policy brief from NCPA breaks down federal Medicaid funding by state and compares those numbers to state poverty levels. As the analysis shows, Medicaid operates on a "rich get richer" model where wealthier states that spend more on Medicaid get more federal money in return. States like Kansas that receive less funding than would be the case if funding correlated with poverty levels reveal that a program meant to serve the truly poor may in fact be making a mockery of the concept:
Overall, 23 states received less than their share of the poverty population would merit, while 27 states received more. In fact, one-in-four federal Medicaid dollars (roughly $44 billion) would have been allocated to different states if funding was based on the poverty distribution alone.
The goal of Medicaid is to provide health care for the poor, but the federal government has made it into a “free-for-all” for states, rewarding those that spend the most. Bringing some common sense to the funding method would help contain spending growth by removing the incentive of states to spend more. It would also distribute federal funds for the poor more equitably.
- Federal funds could be allocated to states based on their poverty distribution; if a state has 10 percent of the nation’s poverty population, it would receive 10 percent of Medicaid funds.
- States could choose to cover optional populations with their own funds.
- Federal funding per poverty person could be capped, so that states do not have an incentive to spend more simply to receive more funds.
States should have the flexibility to use their federal funds as they choose. For instance, they could provide vouchers for Medicaid enrollees to purchase private health insurance, fund Health Savings Accounts or pay premiums for employer-provided insurance.
The goods news is that the Deficit Reduction Act of 2005 allows states to use their funds to experiment with Medicaid program modifications. But the matching formula needs to be changed as well. Distributing federal funds on the basis of need would help equalize Medicaid funding and encourage states to moderate their spending growth.
[Matthew Hisrich, "Kansas Medicaid Spending Comparisons," The Flint Hills Center, 20 August 2004.
Gregory L. Schneider, "Where the winds of reform go whipping cross the Plains," The Kansas City Kansan, 12 July 2006.]
A new policy brief from NCPA breaks down federal Medicaid funding by state and compares those numbers to state poverty levels. As the analysis shows, Medicaid operates on a "rich get richer" model where wealthier states that spend more on Medicaid get more federal money in return. States like Kansas that receive less funding than would be the case if funding correlated with poverty levels reveal that a program meant to serve the truly poor may in fact be making a mockery of the concept:
Overall, 23 states received less than their share of the poverty population would merit, while 27 states received more. In fact, one-in-four federal Medicaid dollars (roughly $44 billion) would have been allocated to different states if funding was based on the poverty distribution alone.
The goal of Medicaid is to provide health care for the poor, but the federal government has made it into a “free-for-all” for states, rewarding those that spend the most. Bringing some common sense to the funding method would help contain spending growth by removing the incentive of states to spend more. It would also distribute federal funds for the poor more equitably.
- Federal funds could be allocated to states based on their poverty distribution; if a state has 10 percent of the nation’s poverty population, it would receive 10 percent of Medicaid funds.
- States could choose to cover optional populations with their own funds.
- Federal funding per poverty person could be capped, so that states do not have an incentive to spend more simply to receive more funds.
States should have the flexibility to use their federal funds as they choose. For instance, they could provide vouchers for Medicaid enrollees to purchase private health insurance, fund Health Savings Accounts or pay premiums for employer-provided insurance.
The goods news is that the Deficit Reduction Act of 2005 allows states to use their funds to experiment with Medicaid program modifications. But the matching formula needs to be changed as well. Distributing federal funds on the basis of need would help equalize Medicaid funding and encourage states to moderate their spending growth.
[Matthew Hisrich, "Kansas Medicaid Spending Comparisons," The Flint Hills Center, 20 August 2004.
Gregory L. Schneider, "Where the winds of reform go whipping cross the Plains," The Kansas City Kansan, 12 July 2006.]
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