Abandon Medicaid, All Ye Who Enter Here?


The Wall Street Journal reports on a few of the states publicly weighing the idea of dropping out of Medicaid:

The idea of abandoning Medicaid as a solution is so extreme that even proponents don't expect any state will follow through, but officials are floating the discussions because dire budgetary pressures have forced them to at least look at even the most drastic options.

Medicaid, begun in 1965 and jointly funded by federal and state dollars, is the nexus of care for the neediest Americans, and a huge payer to hospitals, nursing homes and doctors. Medicaid enrollment totaled 62 million nationwide in 2007, the most recent data available.

But Medicaid has become one of the biggest items on state budgets, and states complain they don't have enough flexibility to pare it without losing their federal matching funds. The federal government, on average, covers 57% of the cost of the program for states. In exchange, states must keep Medicaid open to all who qualify.

Some states, in particular those led by Republicans, are calculating whether they'd be better off giving up the federal funding and replacing Medicaid with a narrower program of their own. Texas Gov. Rick Perry has proposed that his state get out of Medicaid in favor of a state-run system unburdened by federal mandates—including the one that prohibits states from reducing eligibility for the program if they want to qualify for the federal matching funds.

"We feel very comfortable that we could come up with a more equitable, a more efficient, and obviously a more cost-effective way to deliver health care," he said.

How to tackle the soaring cost of Medicaid was one of the big topics in the hallways at the Republican Governors Association gathering in San Diego last week. Mr. Perry said that in private discussions, most attendees agreed they wanted more freedom in choosing how to provide health care to the poor.

Washington state has also looked at the idea of dropping out the program, but Democratic Governor Doug Porter tells the Journal that it's not likely.

"It's not a serious consideration, but it's illustrative that people are even thinking about it," Mr. Porter said. "That I'm doing it is stunning."

I suspect Porter is basically right. Of all the states that have floated the idea, only Texas seems to have anything close to serious interest. But the fact that these states are even considering such a radical step suggests the magnitude of the problem, which has frequently been lost amidst concerns about Medicare and other programs. Will all the recent talk about dropping out of Medicaid lead to a slew of states backing out of the program? Probably not. But it does help underline the desperate need for reform.

More on Medicaid's failures and the path to reform here and here.

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  1. Please. Rick Perry flaps his gums and all of a sudden, Texas is serious about dropping out of Medicaid? For all you non-Texans, let me clue you in: Perry says a lot of things that sounds good to the GOP base here, but he rarely, if ever, follows through on them with any action. When more people other than Governor Goodhair are talking about it, then it’s time to pay attention.

    1. Texas, much to its chagrin, is facing a huge budget deficit that has gotten zero publicity so far. This is not supposed to happen in a conservative, low tax state that is “open for business”. This is supposed to happen only in California.

      If anything saves Medicaid in Texas it will be the fact that lots of old folks and nursing homes benefit from it. They have some stroke.

      Rick Perry would throw children off Medicaid in a split second. Lots of people here would agree that’s what the little bastards deserve.

  2. Still, abandoning Medicaid could be a bonus for Perry if he were to run in 2016.

  3. Doug Porter is the Democrat governor of what state? Never heard of him.

    1. Washington

    2. Christine Gregoire (D) is Washington State’s governor.

      This Doug guy is some DSHS flunky with wild ideas that will never fly in this left coast state.

  4. States should be able to decide their own gay marriage and drug policies… but they must be forced to accept Obamacare.

  5. Until dropping out of Medicaid means your residents get out of paying federal taxes for Medicaid, this is a non-starter.

    1. I’d be willing to bet most of the red states that would drop Medicaid get a whole lot more money from the Feds for Medicaid than they pay in taxes for Medicaid.

      C’mon, Arkansas, Mississippi, Louisiana, Alabama, Georgia. You think these folks are net tax payers for Medicaid?

  6. Just 5 years ago, floating an idea like this would have been “extremist” and unrealistic. But my how times have changed… While the conversation is hesitant, and unsure… Words like ‘nullification’ have entered the public discourse. In certain circles, discussions of Medicaid, Medicare, and Social Security are debated in a serious fashion; and these circles are growing ever wider.

    True, we’ve a long way to go, and nothing is sure (if we don’t follow through, we’re just as likely to slide into real, lasting tyranny); But there may be hope for us yet.

  7. Hey, all these Four Loko bans were passed because people were talking about it. Never underestimate the power of hype in passing legislation.

  8. From the various Texans I’ve been friends with, I’ve learned that people in Texas rarely if ever take their elected leaders seriously.

    They tend to treat their politicians the way you treat a yappy chihuahua: Give it the occasional treat, pet it just so it feels wanted, and then whack it on the nose when it gets to noisy.

  9. dug porter is not the gov’ner although I may want to vote for him if he ever runs. some chick by name christine is and she is all “I love obama care” even if we (people of WA) don’t know how much it costs or how we will afford to pay, it must be good cuz patty murray said so. show us how its done rick perry!

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