March 6, 2017
Democrats’ hypocrisy on Medicaid reform
By Brett Guthrie
With Congress moving forward to repeal and replace Obamacare, it is no surprise that the law’s advocates are worried about their Washington-centered approach to health care being scrapped. It was surprising, however, to see former congressman Henry Waxman take up his pen to decry potential reforms to the Medicaid program — especially since the policies he criticized were ones he once supported.
In a recent opinion piece for The Post, Waxman lambasted the idea of curbing federal spending on Medicaid by adopting a per-capita allotment reform. Waxman said it would be “an unprecedented abandonment of federal responsibility” that would “pass the buck to the states” and “deny care to the most vulnerable among us.” He claimed that “imposing a per-capita cap or block grant would rip health-care coverage from the most vulnerable” and “dramatically shift the burden” of costs to the states.
The policy idea behind a Medicaid per-capita cap is that the federal government would continue to provide matching funds for each individual enrolled in a state’s Medicaid program, but unlike in the current arrangement, the federal government would set a limit on the maximum allowable amount per enrollee. There would be spending limits per state in each of the main Medicaid eligibility groups: the elderly, people with disabilities, children, and nondisabled, nonelderly adults. These caps would be based on each state’s historical average cost for an enrollee in each eligibility group.
It is true that this change would significantly change Medicaid’s financing, but Waxman’s critique of adopting a per-capita cap rings hollow. Although congressional Republicans support this idea, it also gained traction two decades ago with a Democratic president. In the 1990s, President Bill Clinton proposed putting federal Medicaid spending on a more sustainable path by adopting a per-capita cap reform. And when a Democratic president proposed them, Waxman applauded per-capita reforms.
At a 1996 congressional hearing, Waxman noted that under a per-capita cap reform, “the federal government would maintain its commitment to sharing in the costs of providing basic health and long-term care coverage to vulnerable Americans.” He correctly pointed out that “states would have both the incentives and the tools to manage Medicaid more efficiently,” and the continued federal commitment would help “when states face cost increases for reasons beyond their control, including recessions, regional economic downturns, natural disasters, and outbreaks of contagious disease.”
We know how the Clinton-era effort ended: The president and Congress failed to pass reforms that would restrain Medicaid’s growth. As a result, today’s Medicaid program is about three times larger than it was when Clinton proposed his reforms. The program consumes about 1 in every 6 state dollars. Next year, overall Medicaid spending is projected to be larger than the entire defense budget, and by the end of a decade, federal and state spending on Medicaid will total roughly $1 trillion each year. The program is projected to continue to grow at a rate faster than the economy or incoming revenue, an objectively unsustainable path.
Modernizing Medicaid’s financing by putting the program on a budget isn’t draconian, it’s common sense. The fever-pitched fear-mongering against any effort to constrain Medicaid spending shows just how far to the political left Waxman, and the Democratic Party, have drifted. If more spending and more government were the answer, Medicaid patients would have access to world-class health care. Yet, research from an array of scholars has shown that too few providers accept Medicaid patients to meet existing needs and that Medicaid coverage often fails to improve health outcomes for many patients. We must focus on modernizing this Great Society program so it can offer real access to providers and improved health outcomes for decades to come.
No single bill will fix all the challenges Medicaid faces, but Congress and the president have a historic opportunity to adopt permanent reforms. Working together with governors and state Medicaid reformers, we can empower states with new statutory flexibilities. We can modernize the waiver process so states can focus on managing their programs based on the needs of their patients, not managing paperwork for the Centers for Medicare and Medicaid Services. We can create better tools and incentives for states to reduce costs, boost quality and improve health outcomes.
The basic architecture of Medicaid has remained largely unchanged over the past 50 years. We now have an opportunity to improve and modernize the program so it remains strong for the next 50 years. In the meantime, Democratic attempts to score political points by manufacturing fear of per-capita cap reforms not only are misguided, they are hypocritical.