Think the democrat's scare tactics on healthcare reform are a bunch of bull crap? Well, you're right.
The Senate’s Medicaid Moment
The states are proving they can reform this program for the poor.
Vice President Mike Pence speaks during a meeting on healthcare on June 5, 2017. PHOTO: ASSOCIATED PRESS
June 6, 2017 7:19 p.m. ET
145 COMMENTS
Senate Republicans are struggling to agree on health reform, and the biggest divide concerns Medicaid. The problem is that too many seem to accept the liberal line that reform inevitably means kicking Americans off government coverage.
This narrative serves the liberal goal of scaring the public to preserve ObamaCare, but center-right and even liberal states have spent more than a decade improving a program originally meant for poor women and children and the disabled. Even as ObamaCare changed Medicaid and exploded enrollment, these reforms are working, and the House bill is designed to encourage other states to follow.
The modern era of Medicaid reform began in 2007, when Governor Mitch Daniels signed the Healthy Indiana Plan that introduced consumer-directed insurance options, including Health Savings Accounts (HSAs). Two years later, Rhode Island Governor Donald Carcieri applied for a Medicaid block grant that gives states a fixed sum of money in return for Washington’s regulatory forbearance. Both programs were designed to improve the incentives to manage costs and increase upward mobility so fewer people need Medicaid.
Over the first three years, the Rhode Island waiver saved some $100 million in local funds and overall spending fell about $3 billion below the $12 billion cap. The fixed federal spending limit encouraged the state to innovate, such as reducing hospital admissions for chronic diseases or transitioning the frail elderly to community care from nursing homes.
The waiver has continued to pay dividends under Democratic Governor Gina Raimondo. Despite joining ObamaCare’s Medicaid expansion, Rhode Island has held “per member, per month” spending—the category of block grant adopted by the House—to a minus-0.5% trend over the last five years without cutting eligibility or services. Notably, that measure excludes patients added under Medicaid’s ObamaCare expansion, who tend to be healthier and thus require less spending than the typical enrollee. Overall per member, per month costs are falling 2.5% a year.
Block grants are now even routine in none other than Andrew Cuomo’s New York. After a scandal where federal investigators concluded the state had systematically manipulated Medicaid payment formulas to generate federal payola for more than two decades, the Democratic Governor agreed in 2014 to a waiver that caps “global” spending at the growth rate of long-term health-care inflation (3.6%).
There is some early evidence that the Empire State has started to control waste, fraud and abuse as a result, and hopefully so. New York still spends 54% more per enrollee than the national average.
Meanwhile, Governor Mike Pence, Mr. Daniels’s Hoosier State successor, updated the Healthy Indiana Plan with a reform called HIP 2.0 in 2015. His architect was Seema Verma, who now administers Medicaid nationally. Their insight was that able-bodied, working-age adults living near the poverty line need a different type of coverage than do Medicaid’s most vulnerable beneficiaries.
In other words, potential workers with earning capacity are better served by a temporary safety net than by a permanent open-ended entitlement. HIP 2.0 familiarizes members with basic commercial insurance practices like paying a monthly premium. To enroll in plans with a $2,500 deductible and better benefits and quality than basic Medicaid, like dental coverage, they are required to pay 2% of income to an HSA. The first $2,500 is picked up by the state, the money rolls over, and unused consumer contributions are refunded pro rata when they leave HIP 2.0.
According to an audit by the Lewin Group, 70% of Hoosiers in HIP 2.0 make regular contributions—85% of them below poverty, which means they recognize the value. If enrollees fall behind, they are bounced back to basic Medicaid. HIP 2.0 is paired with skills-training, job search and career counselors to help people move from public assistance to the workplace.
This reform honor roll could continue: the 21 states that have moved more than 75% of all beneficiaries to managed care, Colorado’s pediatric “medical homes” program, Texas’s Medicaid waiver to devolve control to localities from the Austin bureaucracy. But liberals and the media ignore this progress as they try to frighten the GOP into doing nothing.
They also ignore that some 600,000 Americans with disabilities, brain injuries and mental illness are now in purgatory on state Medicaid waiting lists, and they compete with new Medicaid’s able-bodied adults for scarce resources. Better to prioritize the truly needy while promoting other goals like health outcomes or labor force attachment.
The political reality is that Republicans won’t get a better chance to reform an entitlement if they muff this one. ObamaCare is imploding, with Anthem saying Tuesday it will leave 18 counties in Ohio next year. Senate Republicans need to settle their differences or prepare to get run out of town.
Appeared in the June 7, 2017, print edition.
The Senate’s Medicaid Moment
The states are proving they can reform this program for the poor.
Vice President Mike Pence speaks during a meeting on healthcare on June 5, 2017. PHOTO: ASSOCIATED PRESS
June 6, 2017 7:19 p.m. ET
145 COMMENTS
Senate Republicans are struggling to agree on health reform, and the biggest divide concerns Medicaid. The problem is that too many seem to accept the liberal line that reform inevitably means kicking Americans off government coverage.
This narrative serves the liberal goal of scaring the public to preserve ObamaCare, but center-right and even liberal states have spent more than a decade improving a program originally meant for poor women and children and the disabled. Even as ObamaCare changed Medicaid and exploded enrollment, these reforms are working, and the House bill is designed to encourage other states to follow.
The modern era of Medicaid reform began in 2007, when Governor Mitch Daniels signed the Healthy Indiana Plan that introduced consumer-directed insurance options, including Health Savings Accounts (HSAs). Two years later, Rhode Island Governor Donald Carcieri applied for a Medicaid block grant that gives states a fixed sum of money in return for Washington’s regulatory forbearance. Both programs were designed to improve the incentives to manage costs and increase upward mobility so fewer people need Medicaid.
Over the first three years, the Rhode Island waiver saved some $100 million in local funds and overall spending fell about $3 billion below the $12 billion cap. The fixed federal spending limit encouraged the state to innovate, such as reducing hospital admissions for chronic diseases or transitioning the frail elderly to community care from nursing homes.
The waiver has continued to pay dividends under Democratic Governor Gina Raimondo. Despite joining ObamaCare’s Medicaid expansion, Rhode Island has held “per member, per month” spending—the category of block grant adopted by the House—to a minus-0.5% trend over the last five years without cutting eligibility or services. Notably, that measure excludes patients added under Medicaid’s ObamaCare expansion, who tend to be healthier and thus require less spending than the typical enrollee. Overall per member, per month costs are falling 2.5% a year.
Block grants are now even routine in none other than Andrew Cuomo’s New York. After a scandal where federal investigators concluded the state had systematically manipulated Medicaid payment formulas to generate federal payola for more than two decades, the Democratic Governor agreed in 2014 to a waiver that caps “global” spending at the growth rate of long-term health-care inflation (3.6%).
There is some early evidence that the Empire State has started to control waste, fraud and abuse as a result, and hopefully so. New York still spends 54% more per enrollee than the national average.
Meanwhile, Governor Mike Pence, Mr. Daniels’s Hoosier State successor, updated the Healthy Indiana Plan with a reform called HIP 2.0 in 2015. His architect was Seema Verma, who now administers Medicaid nationally. Their insight was that able-bodied, working-age adults living near the poverty line need a different type of coverage than do Medicaid’s most vulnerable beneficiaries.
In other words, potential workers with earning capacity are better served by a temporary safety net than by a permanent open-ended entitlement. HIP 2.0 familiarizes members with basic commercial insurance practices like paying a monthly premium. To enroll in plans with a $2,500 deductible and better benefits and quality than basic Medicaid, like dental coverage, they are required to pay 2% of income to an HSA. The first $2,500 is picked up by the state, the money rolls over, and unused consumer contributions are refunded pro rata when they leave HIP 2.0.
According to an audit by the Lewin Group, 70% of Hoosiers in HIP 2.0 make regular contributions—85% of them below poverty, which means they recognize the value. If enrollees fall behind, they are bounced back to basic Medicaid. HIP 2.0 is paired with skills-training, job search and career counselors to help people move from public assistance to the workplace.
This reform honor roll could continue: the 21 states that have moved more than 75% of all beneficiaries to managed care, Colorado’s pediatric “medical homes” program, Texas’s Medicaid waiver to devolve control to localities from the Austin bureaucracy. But liberals and the media ignore this progress as they try to frighten the GOP into doing nothing.
They also ignore that some 600,000 Americans with disabilities, brain injuries and mental illness are now in purgatory on state Medicaid waiting lists, and they compete with new Medicaid’s able-bodied adults for scarce resources. Better to prioritize the truly needy while promoting other goals like health outcomes or labor force attachment.
The political reality is that Republicans won’t get a better chance to reform an entitlement if they muff this one. ObamaCare is imploding, with Anthem saying Tuesday it will leave 18 counties in Ohio next year. Senate Republicans need to settle their differences or prepare to get run out of town.
Appeared in the June 7, 2017, print edition.
