WSJ Runs Heartland Experts’ Plan to Give Medicaid Funds Straight to Patients

Published April 18, 2017

As Congress and the White House rethink legislation to replace Obamacare, all ideas are back on the table, including one newly developed by staff of The Heartland Institute and published by The Wall Street Journal.

To enable Medicaid enrollees to obtain first-rate insurance and care, Congress should adopt the “Personal Health Care Safety Net Medicaid Fix,” developed by Heartland Executive Editor Justin Haskins, Director of Research Sam Karnick, and me.

The plan would give each Medicaid adult and child a transferable deposit of $7,000 per year in a health savings account (HSA). As Haskins and I wrote in The Wall Street Journal on April 13:

Washington and state governments spent $545 billion in 2015 on 73 million Americans covered by Medicaid and the Children’s Health Insurance Program. Instead lawmakers could take $511 billion of that total, divide it equally among enrollees, and give each one a health savings account with $7,000 a year. This would be real money for the poor, stored in real private accounts.

Most Medicaid enrollees are part of a family. Family members could share Medicaid funds. A family of four would have $28,000 with which to buy insurance and pay for an entire $12,000 family deductible. This plan creates a way for family members to take care of each other, we wrote:

Recipients could use the deposit to purchase health insurance and cover the cost of prescriptions, copays, deductibles and other related expenses. Unspent money would carry over to the following year. Enrollees could share that $7,000 with a sick spouse, sibling, parent or child.

Because most people don’t get woefully sick several years in a row, most enrollees will start rapidly building their personal safety nets in year one, banking unspent HSA Medicaid deposits as a personal rainy day fund:

Enrollees who are relatively young and healthy soon would build personal safety nets worth tens of thousands of dollars. This would not only be good for them, it would stabilize Medicaid, which has become an enormous and unpredictable burden on state budgets.

Older and sicker patients who spend their entire $7,000 Medicaid deposits, and who lack family members able to share HSA funds, would get federal assistance, funded by $34 billion saved by this plan, we explained:

[S]ome patients, especially those over age 59 or with serious health problems, will need more help. Lawmakers could allocated the remaining $34 billion in the Medicaid budget line to assist them.

To break up Washington, DC gridlock, the “Personal Health Care Safety Net Medicaid Fix” could be adopted as a standalone Medicaid fix or paired with broader health care reform legislation.

For more, read the Wall Street Journal op-ed and the unabridged “Personal Health Care Safety Net Medicaid Fix” plan.

– Michael T. Hamilton ([email protected], @MikeFreeMarket) is a Heartland Institute research fellow and managing editor of Health Care News, author of the weekly Consumer Power Report, and host of the Health Care News Podcast.



House Republicans and White House officials are working the phones during Congress’ two-week recess to prepare for an upcoming spending battle, another legislative push for healthcare and the eventual presentation of a tax reform plan.

With a government shutdown looming on April 28 if lawmakers fail to agree on a funding mechanism, members face pressure to work quickly upon returning from their districts to introduce and vote on a bill that keeps the government running.

“In terms of the spending, I think the appropriators are kind of working with each other on coming up with a deal to close out the fiscal year. Those conversations are taking place,” a House Republican leadership aide told the Washington Examiner.

“The idea is that we can hopefully put together a package that can pass not too long after we get back from recess and basically finish the appropriations process for this year,” the aide said. “The White House is definitely looped in and aware of what’s taking place on that front.”

President Trump signaled this week that an elusive deal on healthcare legislation may also be in the offing. After trying and failing to build consensus around an Obamacare reform bill late last month, the administration and House leadership had sworn off healthcare for the foreseeable future, only to return to the negotiating table the following week.

Behind the scenes, several sources said House Republicans and White House officials have continued working toward a healthcare plan during the first week of recess.

“There are some people like [Reps.] Mark Meadows and Tom MacArthur who are very eager to get to a deal and so we’re encouraging that, but we’re also just reminding people that whatever deal they strike – if they do come to an agreement on something – it needs to be something that can bring along the Freedom Caucus and not lose a lot of votes on the moderate side,” the leadership aide said.

“It’s still kind of being discussed, and I don’t think they’re exactly there yet,” he added.

Members of the conservative House Freedom Caucus objected to the original Obamacare reform bill, the American Health Care Act, because they argued it did not do enough to dismantle the regulatory structure of Obamacare. Centrist Republicans, on the other hand, resisted attempts to add language that would strip away protections for sick consumers, further complicating the path to a deal.

A source with the Freedom Caucus, which Meadows chairs, said healthcare-related conversations between the caucus and the White House “have been frequent and continued through recess.”

Before lawmakers left Washington for the Easter recess, members had approached a deal that would allow states to opt out of certain Obamacare regulations.

While the votes on a compromise bill have not yet materialized, sources on both sides of the negotiating table have expressed optimism in the talks, and Trump himself has said he intends to tackle Obamacare reform before moving on to tax reform.

“A resolution to the American Health Care Act appears to be the top priority for everyone at the moment,” said a source familiar with the current discussions on healthcare and taxes. “I know there are member-level conversations taking place to reach an agreement to have the votes needed to pass the bill. If an agreement is reached during the recess, leadership just might call members back to D.C. for a vote. It is a slim possibility.” …

SOURCE: Sarah Westwood, Washington Examiner


Many states have a hospital regulatory regime called certificate of need, in which new health care facilities must apply for permission from the government for their existence and “prove” that the existing health care service providers in the geographic region can’t service the existing population. But researchers say that certificate of need regulations lead to artificially constricted supply and a pseudo-monopoly – and that some of the justifications for these regulations fall short.

Virginia has some of the strictest certificate of need (CON) laws in the country, justified by incumbent providers claiming that their regulatory advantages allow them to serve customers better, as well as provide charity care to the least vulnerable. But some providers in Virginia have recently instituted stricter regulations on who qualifies for charity care within their service areas, while at the same time raising prices because, they argue, they have to absorb the costs of the charity care.

“The primary justification for certificate of need laws is that it allows incumbent hospitals and providers to cover the cost of charity care,” Christopher Koopman, senior research fellow at the Mercatus Center at George Mason University, told “The idea being that giving them a monopoly or a quasi-monopoly gives them the ability to charge paying customers more, and then use those excess profits to cover the cost of nonpayer care.”

Regardless of the “questionable” distinction, Inova pushed forward with the residency restrictions for charity care. Representatives for the HCAB’s chair told that the legality of this was unclear. …

“There is no relationship between the presence of a certificate of need law and any increase in charity care,” Koopman told “Certificate of need laws are a very clunky, awkward, inefficient attempt to cover the cost of nonpayer care.”

As has reported in the past, certificate of need laws have been found to be anticompetitive and result in worse health outcomes for patients. From Florida to Vermont to other states with CON laws, studies show that the regulations decrease Americans’ access to health services, including hospitals, private practices and emergency rooms. CON laws have shown little ability to decrease costs of services or improve quality, either. And they give political power to incumbent health providers – particularly large chains – that can be used to shut down the potential expansion of competitors.

SOURCE: Kevin Glass, Virginia Watchdog


Michigan House and Senate committees are preparing to vote next week on a $25 billion state fiscal year 2018 health budget proposal that could include boilerplate language to mandate pilot studies to test integration of physical and behavioral health services by Medicaid HMOs and a separate boilerplate directive for direct primary care providers.

Mental health advocates have been lobbying Rep. Edward “Ned” Canfield, R-Sebawaing; Rep. Sue Allor, R-Wolverine; Sen. Mike Shirkey, R-Clarklake, and others to simply follow the so-called Section 298 Workgroup report that called for wide-ranging improvements in the current quasi-public mental health system.

The House appropriations subcommittee on health and human services are to vote Wednesday on 2018 budget recommendations, confirmed Canfield, chair of the appropriations subcommittee of the Michigan Department of Health and Human Services.

“We do believe the House will include language that suggests an HMO pilot in their 298 language,” according to a legislative action alert sent this week by the Michigan Association of Community Mental Health Boards in Lansing.

Shirkey, who chairs the Senate health policy committee, said he supports HMO pilot projects to integrate physical and behavioral care. But he said his committee will not, at this time, consider Section 298 changes. He said the committee is reviewing a boilerplate provision that would allow direct primary care pilots in the Medicaid program.

Under direct primary care, physicians and patients have an alternative to fee-for-service insurance billing. Direct primary care providers charge patients, companies – possibly even state Medicaid programs – a set fee per month for a range of primary care type services. DPC doctors give patients longer visits and generously allow them to contact them through emails or phone calls in off hours. Patients usually also have health insurance for noncovered services.

“We should try hard to see whether this (DPC) model will work for us,” Shirkey said. “It is very disruptive to major health plans.”

SOURCE: Jay Greene, Crain’s Detroit Business


The American College of Physicians may have objected to Republicans’ efforts to repeal the Affordable Care Act (aka Obamacare) – at least as envisioned by the GOP’s American Health Care Reform Act of 2017 – but the nation’s largest medical specialty organization has come out foursquare in favor of HR 1215. This latest Republican-sponsored medical-liability reform bill, the Protecting Access to Care Act, which is now out of committee and on its way to the full US House of Representatives, would place a $250,000 cap on noneconomic damages.

In a letter to the legislation’s chief sponsor in the House – Rep Steve King (R-IA) – ACA President Nitin S. Damle, MD, wrote: “This legislation will provide much-needed reforms to our medical-liability laws to reduce the costs associated with defensive medicine and improve patient care.”

But Dr. Damle added one recommendation: Lawmakers should amend their bill to impose a $250,000 limit on noneconomic damages nationwide, regardless of any state’s existing cap, “to level the playing field.” Rep King says the bill in its present form would allow state lawmakers to reserve the right to set the cap higher or lower than $250,000.

At least one group critical of the proposal is busy launching a counteroffensive, as a story on Public News Service reports.

The American Association for Justice (AAJ) – formerly known as the Association of Trial Lawyers of America – objects not only to the damages cap but to other features of the GOP bill as well, including provisions that would pay damages above $50,000 in installments, exempt clinicians ordering drugs or medical devices from product-liability or class-action suits, limit trial lawyers’ contingency fees, impose shorter statutes of limitations for filing claims, and replace joint and several liability with the Fair Share rule. …

SOURCE: Wayne J. Guglielmo, Medscape