Medicaid: Still a Mess
The Wall Street Journal's Janet Hook and Janet Adamy are reporting that debt-deal talks are focusing on potential cuts to Medicaid, the joint-federal state health program for the poor and disabled. If major entitlement reforms are on the table, I'd prefer to see Medicare go first, and take the biggest hit. It's the bigger debt driver, its per-patient costs are higher, and it doles out taxpayer-funded entitlement benefits to upper and upper-middle class individuals who can afford their own care.
But if Medicare is more or less untouchable, Medicaid reform isn't a bad idea. In fact, it's quite a good one. Ideally, reform would mean block-granting the program—capping the federal share of the program's costs and putting states on a budget, but giving them lots more flexibility to redesign their own programs as they do. But a good start would be to simply repeal ObamaCare's Maintenance of Effort (MoE) requirements, which prohibit states from saving money by adjusting program enrollment and eligibility requirements between now and 2014.
Apart from the debt deal, that's what Republican governors are already hoping for:
"This law will greatly expand state Medicaid programs, pulling tax dollars from other necessary areas like education and law enforcement," Mississippi Gov. Haley Barbour (R) told congressional lawmakers earlier this year. He added that the health-care reform law "expanded a broken system."
Like many in the GOP, Barbour would like to see Medicaid converted into a block grant, which would have fewer restrictions and allow states to tailor their programs. But opponents say that change could lead to a decline in the level of health care for the poor.
…The federal stimulus program provided more than $100 billion to help states pay for Medicaid during the depths of the recession, but that money is all but gone.
Christie's proposal would deny new Medicaid coverage to adults in a family of three who earn more than $5,300 a year, down from the current cutoff of $24,645. The eligibility change is part of a broader plan to save $300 million in the state's Medicaid program.
"Even with $250 million of Medicaid savings in this budget, and additional projected savings from a $300 million global waiver to reform Medicaid, spending will grow by nearly $1 billion over last year," Christie said in his budget address earlier this year. "That is the definition of an out-of-control program. Worse yet, we cannot make meaningful reforms because of the restrictions on New Jersey from Obamacare.
"States desperately need relief from that unfunded federal mandate," he said.
I wrote about block grants and the need for greater state-level in The Wall Street Journal back in February. Last summer, I looked at how ObamaCare would affect Medicaid programs at the state level.