October 30 2012

Medicaid is on the Ballot, but Which Race?

Hadley Heath

In today's New York Times, columnist Paul Krugman writes that Medicaid is on the Ballot in this year's elections.  At first I thought he meant statewide elections: Various states are still sitting on the fence about the expansion of Medicaid that was supposed to happen under the Affordable Care Act.  Remember that Supreme Court case this summer?  The Court ruled states could decide whether or not to participate.  Indeed, the elections this fall will impact which states support the Medicaid expansion in 2014.  

But Krugman didn't mean that.  He meant to demonize that villain Mitt Romney for throwing "45 million people" into the streets without health insurance.  So a vote for Mitt Romney is, according to Krugman, a vote to kill off the least fortunate by denying them government health insurance. 

So... is this true?  Does Mitt Romney want to hit the kill switch and turn off Medicaid?  No. Actually, Romney (on this issue, like many others) takes a moderate approach and wants to put states in charge.  He supports reforming Medicaid into a block-grant program for the states.

Block grants are lump sums of money distributed to the states with very few strings attached.  This gives states the freedom to determine how to use the money.  States could determine which benefits will be covered and who will be eligible.

This is a theme in Romney's approach: giving more power to the states.  This emphasizes his appreciation for local government: The best solution is the most local solution because the closer the government, the louder the voices of individual citizens.  It's much easier to influence policy decisions in Phoenix, Raleigh, Albany, or Topeka than it is to influence Washington, D.C.

Despite the lack of flexibility for states under the current Medicaid policy, we can already see how some states have tried to reform Medicaid to make it more efficient.  Here are some examples:

  • In Indiana: Gov. Mitch Daniels (gasp - a Republican!) expanded Medicaid eligibility up to 200 percent of the federal poverty line.  But he also created "POWER" accounts that beneficiaries control (with sliding-scale subsidies).  This consumer-input from beneficiaries is a good step in the direction of personal responsibility and choice in Medicaid.
  • In Florida: A pilot program in several counties has put patients at the center of their own care, allowing beneficiaries to choose from a variety of private plans.  The beneficiaries in the pilot program reported higher levels of satisfaction and better health.  Oh yeah, and it's already saving Florida $118 million annually.

Krugman wrongfully assumes that putting states in charge of Medicaid would result in many governors and state legislatures heartlessly slashing benefits and restricting eligibility, even to those who desperately need help.  He admits that Medicaid is not perfect, but clearly cannot think outside of the box and imagine a world where real structural reforms do a better job delivering a higher quality Medicaid program to those who need it most.

Medicaid is on the ballot this fall, but not in the way Krugman describes.  The real questions for Medicaid should be answered by names further down on the ballot, leaders at the state level.

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