#273: Establishing an Arsenal for Medicaid Reform

Published May 23, 2011

Since I first began writing CPR last year, I’ve touched several times on my particular interest in Medicaid reform as the driving motivation behind my involvement in health policy. The realities of Medicaid’s failure are, from my perspective, one of the greatest humanitarian disasters of our time. It is a government program that fails in every respect at the mission it was set upon, effectively imprisoning an entire portion of the population in a system of subpar care that is more likely to leave them dead on the table than if they had no insurance at all.

The evidence of Medicaid’s disastrous outcomes has been with us for decades. But only recently has the evidence of the unsustainable cost growth in the former safety net system become apparent. As with most government programs, widespread opposition doesn’t come when a solution fails – it comes when that solution fails and costs far too much. Medicaid is now facing this reality, one accelerated by President Barack Obama’s health care law.

If there is a silver lining to Obama’s law, it is that his foolhardy decision to cram millions of Americans into an already overburdened Medicaid system will serve only to accelerate inevitable reform of the failed program. States will not sit idly by and watch their tax dollars be squandered for such poor outcomes and with no flexibility to target money to the poorest of the poor and sickest of the sick. And already the push for reform is becoming increasingly bipartisan as Democrat governors admit, as Washington’s Chris Gregoire did recently, that flexibility is exactly what they need.

Yet fights over such expansive government programs are never over quickly. Rolling back the welfare requires planning and work, and, perhaps most importantly of all, it requires the retention of knowledge and information from prior attempts.

Therefore, this week we’ve launched a new project of The Heartland Institute: ReformMedicaid.org, a Web site designed to collect and aggregate ideas, stories, and facts on the devastating effects of Medicaid on state budgets and the population it is intended to serve.

There are several aspects of this project not yet ready for launch, but we plan for the end result to include:

  • A clickable and embeddable map that links readers to stories and studies about waste, fraud, and abuse in Medicaid in their state;
  • A number of informative and easily shared charts and handouts that collect the most damning facts about Medicaid’s failures; and
  • A series of educational videos designed to inform conservative and libertarian activists about real solutions for Medicaid’s problems.

This effort would be greatly helped if you, dear readers, would take the time to point out any studies, news stories, and posts you think are worth highlighting on the Medicaid front in the months to come. We welcome content from everyone. We want you to be able to find every point, study, and key reference you need on this topic at this site, and we want to give policy leaders and interested activists a place to turn to where they can find the arsenal of data they need to make the case for future reforms.

Responsible political leaders will recognize that the problems plaguing Medicaid can’t be solved just by throwing more cash in its direction. They require fundamental reform, innovative solutions, and a dedication to empowering consumers to make choices for themselves.

— Benjamin Domenech



Sens. Tom Coburn (OK), Richard Burr (NC), and Saxby Chambliss (GA) last week introduced the Medicaid Improvement and State Empowerment Act, a proposal that combines several key reforms of the Medicaid system designed to increase state flexibility, allowing states to prioritize care for the needy and the sick in a time of economic downturn.

Quotes from the three Republican members:

“If entitlement programs like Medicare, Medicaid and Social Security are not reformed they won’t be able to provide promised benefits. It is that simple. Seniors and low-income Americans need Washington to produce solutions, not attack ads. Our broken Medicaid program shows that access to a government health care program does not guarantee access to health care. Our bill will help fix a program that denies patients access to 40 percent of doctors,” Dr. Coburn said.

“This bill is an important first step in reforming our nation’s health care system and fixing our broken entitlement programs,” Sen. Burr said. “States have a proven track record of being able to adopt innovative solutions to improve patient care. By giving them more control over their own Medicaid programs, we are allowing states to innovate and better meet their needs and, most importantly, the health care needs of their patients.”

“The path to fiscal sustainability begins with the reform of our nation’s entitlement programs,” said Chambliss. “The Medicaid Improvement and State Empowerment Act will give states such as Georgia the flexibility to design programs specifically tailored to support our most vulnerable beneficiaries and allow them the control to effectively plan for future budgets decisions.”

A two-page overview of the Medicaid Improvement and State Empowerment Act is here.

SOURCE: The Heartland Institute


Maureen Salmon at U.S. News & World Report reports on a disturbing related story:

Undercover research in Illinois reveals that dentists are far more willing to provide emergency care to children with private insurance than to kids with public insurance such as Medicaid.

Posing as mothers of a fictional 10-year-old boy with a fractured front tooth, six research assistants phoned 85 dental practices twice, four weeks apart, to determine the impact of insurance status on the practices’ decision to schedule an urgent dental appointment.

Even when calling Medicaid-enrolled dentists, just 68 percent of children with the Medicaid/Children’s Health Insurance Plan were able to get an appointment, compared to all of the privately insured children. Non-enrolled dentists offered an appointment to only 7 percent of kids with public insurance despite the fact that Medicaid reimburses all emergency dental care.

“That’s a huge difference,” said study co-author Dr. Karin Rhodes, director of the division of emergency care policy research at the University of Pennsylvania’s School of Social Policy and Practice. “This gives irrefutable numbers. I think there’s a real disparity between oral health and traditional medical care in this country.”

The abstract of the study, published today in the journal Pediatrics, is here.

SOURCE: U.S. News & World Report


Democratic Rep. Allyson Schwartz of Pennsylvania reiterates her support for the repeal of the Independent Payment Advisory Board (IPAB) in today’s USA Today:

But the new law is not perfect. It established an Independent Payment Advisory Board – known by the acronym IPAB – a group of 15 people appointed by the president and charged with curtailing the rate of growth and spending under Medicare, solely through changes to provider reimbursements.

We all agree that Medicare costs must be contained and that the payment system is flawed and needs to be replaced. But simply cutting reimbursements is not the answer. IPAB brings unpredictability and uncertainty to providers and has the potential for stifling innovation and collaboration.

The threat of reduced payments is the least imaginative option and most unlikely to result in the kind of heath care we know seniors and all Americans deserve.

As we’ve noted in the past, opposition to IPAB, already bipartisan, is only going to grow – which makes it an astoundingly awful vehicle for reliable deficit cutting, despite President Obama’s promises.



The AP/GFK poll delivers bad news for those who want an honest assessment of our entitlement burden:

Most Americans say they don’t believe Medicare has to be cut to balance the federal budget, and ditto for Social Security, a new poll shows.

The Associated Press-GfK poll suggests that arguments for overhauling the massive benefit programs to pare government debt have failed to sway the public. The debate is unlikely to be resolved before next year’s elections for president and Congress.

Americans worry about the future of the retirement safety net, the poll found, and 3 out of 5 say the two programs are vital to their basic financial security as they age. That helps explain why the Republican Medicare privatization plan flopped, and why President Barack Obama’s Medicare cuts to finance his health care law contributed to Democrats losing control of the House in last year’s elections.

Medicare seems to be turning into the new third rail of politics. …

In the poll, 54 percent said it’s possible to balance the budget without cutting spending for Medicare, and 59 percent said the same about Social Security. Taking both programs together, 48 percent said the government could balance the budget without cutting either one. Democrats and political independents were far more likely than Republicans to say that neither program will have to be cut.

Delusion is like a warm blanket. Now if only Republican Senators didn’t also suffer from such a misconception.

SOURCE: Associated Press


Heads up about an event this week: The House Energy and Commerce Committee’s Subcommittee on Health will hold a hearing on Wednesday, May 25 titled “Expanding Health Care Options: Allowing Americans to Purchase Affordable Coverage Across State Lines.” Friend of CPR Christie Herrera of the American Legislative Exchange Council will be testifying. Be sure to watch, and testimony should be added at this link after the hearing.

SOURCE: House Energy and Commerce Committee