Critics of market-based Medicaid reform claim the plans are “untested” and would result in higher costs and worse health outcomes.
“These plans make many false assumptions about Medicaid. The biggest one is that private coverage is less expensive, when Medicaid is cheaper,” said Judith Solomon, senior fellow at the Center on Budget and Policy Priorities, a frequent critic of market-based Medicaid reform.
“This may potentially harm beneficiaries who are subject to defined contributions that may or may not meet their needs, especially for the disabled,” Solomon added.
Doubters Offer No Alternative
Solomon is equally skeptical of claims that Medicaid would fare better under private-sector management. “I’ve talked with lawmakers in Idaho and Oklahoma, and the people in statehouses actually believe that the private sector can do things better. I don’t have any evidence of that,” she said.
When asked about her organization’s Medicaid reform plan, Solomon replied, “That’s a fair question. We don’t really have a comprehensive plan for reform. We have been working on analyzing what’s out there, like better managing chronic illness. But we don’t yet have a comprehensive answer to this.”
Analysts Cite Reform Benefits
Insurance industry analysts refute Solomon’s claim that there is no evidence of private-sector advantages.
“Private insurers have a lot of experience in dealing with people with different health needs, whereas the government is just a claims processor,” said J. P. Wieske, director of state affairs for the Council for Affordable Health Insurance, a research and advocacy organization of insurance carriers.
“It is also helpful for the patient, because private insurance will help remove the stigma or the perception of a stigma of people on public assistance,” said Wieske. “Removing that may encourage people to see doctors more, which will improve health outcomes.”
— Christie Raniszewski Herrera