Expansion Is Wrong Move For Medicaid

As first appearing in the Columbia Tribune:

In his 2006 book The Audacity of Hope, then-U.S. Sen. Barack Obama was correct when he called America’s Medicaid system “broken.” Unfortunately, the program remains broken almost a decade later; from busting state budgets to delivering substandard care and access to our most needy, Medicaid serves as an important reminder that spending is no substitute for reform.

More spending, however, is exactly what some in Jefferson City want. Repackaged as a “Medicaid Transformation,” the Medicaid expansion element of the president’s health care law is being rebranded because “the Obamacare Medicaid expansion” — which is what it is — would never fly with the public.

Missourians recognize that, rather than expansion, Medicaid needs reform. Free-market ideas can take us in a better direction to deliver improved care to the less fortunate while also better serving the taxpayers who fund the program.

Free-market Medicaid reform principles aim to empower individuals, improve access and services for the needy, address problems of bureaucratic waste and leverage market forces to improve care for all. Indeed, markets have helped to make all sorts of goods and services less expensive and more available in many areas of our lives. They can do the same for health care.

Here are some ideas the state should be considering to make Medicaid better.

First, empower Medicaid’s patients. An important Oregon study suggests one of the few health benefits of Medicaid enrollment is the knowledge that an enrollee will not become bankrupt if the worst happens. With that in mind, Missouri should convert much of its Medicaid program into government-held health savings accounts (HSAs), splitting current Medicaid spending levels among the beneficiaries. After purchasing at least a catastrophic health care plan, beneficiaries could roll over any remaining money from year to year. This would provide the safety net Medicaid was supposed to be while still allowing patients to tailor their spending to their needs. One size does not fit all when it comes to health care. The state should stop acting like it does.

Second, give Medicaid enrollees an incentive to leave the program. Another Oregon study found that rather than decrease unnecessary emergency room use, Medicaid enrollment actually increased it. As a reform, then, if an enrollee abides by the program’s rules and avoids wasteful ER use, the enrollee could take some percentage of the remaining money with him or her when leaving the program, either as a private HSA or as a reduced amount in cash. This would help both the patient and the taxpayers: It would reward the Medicaid enrollee for healthy and fiscally prudent behaviors and reduce taxpayers’ costs.

Third, with so many newly minted, price-conscious Medicaid consumers, implement price transparency measures for common medical procedures. The federal government has started the process of forcing greater hospital price transparency, but states have done a poor job of empowering customers with the information to shop for health care like they can for cars, homes and even Lasik eye procedures. This also would reduce Medicaid access problems; rather than enrollees having to find providers who accept Medicaid patients, Medicaid beneficiaries could go practically anywhere with their HSA accounts.

Finally, pursue regulatory reforms of “certificate of need” and “scope of practice” laws, areas of regulation that often act as needless barriers to patient care. Along with ensuring prices are as transparent as possible, the state should make sure care is as accessible as possible through as many places and people as possible. Well-researched regulatory reforms that remove unnecessary obstacles to care would help both the poor and middle class.

To be clear, these ideas are meant to contribute to the Medicaid reform conversation, not end it. But that is what the conversation in Jefferson City should be about — reform, not expansion. It is time for the state deliver on its promise of a better Medicaid program.

Patrick Ishmael is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.