The House of Representatives is expected to try and repeal and replace parts of the Affordable Care Act (ACA), and regardless of the results, states will have decisions to make – especially when it comes to Medicaid. According to the Kaiser Family Foundation, in states’ fiscal year 2015, Medicaid , in state fiscal year 2015 expenditures made up an average of 19 -percent of state general fund expenditures. Thirty-two states have chosen to expand their Medicaid programs under the ACA.
The phase-down in the federal government’s Medicaid matching rate over the next couple of years will put even more financial pressure on the states. There are also concerns about Medicaid recipients’ access to care and the health outcomes experienced compared to those with private insurance.
Justin Haskins, Michael Hamilton, and Sam Karnick of The Heartland Institute have proposed the “Personal Health Care Safety Net Medicaid Fix” as a potential solution to the Medicaid problem. It would put $511 billion of the $545 billion spent annually on Medicaid in the hands of patients. The plan would do this by depositing $7,000 per year in a health savings account (HSA) for every adult and child enrolled in Medicaid. Recipients could use these HSA dollars to buy private health insurance and other eligible health care costs, including deductibles, prescriptions, and copays. Funds left over at the end of each year could be rolled over into the following year, allowing individuals to build a personal safety net, and families could share the funds between one another, making them less dependent on expansive government services.
In an op-ed published in the The Wall Street Journal, Haskins and Hamilton writes, “Most recipients would probably use the funds to buy private health insurance, many for the first time. The average annual premium last year for an (overpriced) bronze plan on the ObamaCare exchanges was about $3,100 for a 30-year-old, $3,500 for a 40-year-old, $4,900 for a 50-year-old, and $7,400 for a 60-year-old. After that, at age 65, Americans qualify for Medicare.”
In a Research & Commentary, Matthew Glans notes, how “Medicaid has long used taxpayer dollars inefficiently. A report from the Department of Health and Human Services (HHS)found the average cost of the ACA’s Medicaid expansion enrollees was nearly 50 percent higher in fiscal year 2015 than the levels HHS had projected the previous year. In 2015, Medicaid expansion enrollees cost an average of $6,366; HHS had predicted it would be $4,281. HHS also reported Medicaid spending reached $554.3 billion in fiscal year 2015, which is 5 percent higher than its projections. This is not surprising; the increased federal funding incentivized states to increase enrollment and boost payment rates.”
Instead of waiting for federal changes to ACA, states should begin seeking waivers from HHS to innovate and reform their Medicaid programs in a way that can save money and lead to better health care outcomes. The Medicaid Fix would be a step towards empowering those most in need with access to quality health care, and not simply health insurance coverage, and it would help family members take care of one another so they are less dependent on costly government services that trap people in poverty.
What We’re Working On
Budget & Tax
Research & Commentary: Gas Tax Increase Unlikely to Solve South Carolina’s Transportation Problems
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines a proposed gas tax increase in South Carolina, arguing it is not appropriate to add the burden of additional tax increases on households that are already cash-strapped. “South Carolina legislators need to explore innovative and efficient ways to fund road construction and traffic infrastructure, such as privatizing roads and establishing toll systems. In several cities, transportation agencies are using congestion pricing—varying toll prices based on congestion—to manage demand and limit traffic problems,” wrote Glans. Read more
Health Care
Research & Commentary: Dental Service Organizations Help Patients and Dentists
In this Research & Commentary, Senior Policy Analyst Matthew Glans examines dental service organizations and how they can improve the cost and availability of dental services. “DSOs have proven to be an effective tool for streamlining dental practices, bringing down costs, and leaving more time for dentists to provide care. State legislators should avoid implementing new laws that hinder DSOs – a successful model for maintaining an affordable and efficient dental practice,” Glans wrote. Read more
Education
Research & Commentary: Ohio Education Savings Account/School Voucher Consolidation
In this Research & Commentary, Policy Analyst Tim Benson writes about a proposal in Ohio that would consolidate three of the state’s school voucher programs into an education savings account (ESA) program. ESA funds could be used to pay for tuition and fees at private schools, textbooks, tutoring services, online courses, dual-enrollment courses, and courses at a community college. Establishing a universal ESA program would put the Buckeye State at the forefront of the education-choice movement, Benson writes, and it would give all Ohio families a greater opportunity to meet each child’s unique education needs. Read more
Energy & Environment
Research & Commentary: Connecticut Carbon Tax Proposal Harmful to State Residents
In this Research & Commentary, Policy Analyst Tim Benson writes about a proposal being considered in Connecticut that would establish a carbon-dioxide tax on fossil fuels, including gasoline, natural gas, coal, propane, and “any other petroleum product,” starting in 2019. The tax would begin at $15 per ton in the first year and increase by at least $5 per ton each subsequent year. However, the tax would not come into effect until neighboring Massachusetts and Rhode Island also pass similar carbon tax legislation. At 17.77 cents per kilowatt hour, Benson writes, Connecticut currently has the second-highest retail electricity prices in the nation and, at $404 a month, Nutmeg State residents face the highest total energy costs in the country. A carbon tax, he argues, would make everything more expensive for working families in Connecticut, who are already pinched by the state’s high costs, leaving them less to spend and save – all without any guaranteed environmental benefits. Read more
From Our Free-Market Friends
No Sign of Warming: Snowpack Levels in Washington State Are Average Again
In this Policy Note, Todd Myers, director of environmental policy at the Washington Policy Center looks at claims that the snowpack in Washington State is declining and what lessons policymakers can take from this data. “There is a strong push in Washington state to lock in dramatic and expensive climate policies. The failure to accurately predict something as relatively simple as snowpack levels should be a warning to policymakers who want to get the solution right without sacrificing economic growth or other public priorities.”Read more
