Moderate Republicans profess to be concerned about cuts in Medicaid spending in the new, revised, improved Senate ObamaCare replacement bill. But there are key ways to cushion these cuts so that they do not eviscerate protection for the neediest among us. The provision in the legislation turning power over Medicaid to the states is key in mitigating the impact of the cuts. Here’s how:
Make sure money goes to the really needy and sick. An estimated 11% of all Medicaid money is wasted through fraud and abuse. Often it is just sent to the wrong place. Data also shows major increases in emergency room use. In fact, many doctors recount that Medicaid patients are crowding up emergency rooms to get out of the cold. With Medicaid resources now capped and increasingly limited, we need to adopt measures to keep the program focused on those most in need by:
a. Small, nominal co-payments. Asking for copayments in a poverty program seems almost oxymoronic, but with Medicaid now available to lower middle class families, a $10 co-pay for ER use would do wonders to cut costs and permit those who really need care to get it.
b. Work requirements, as are also mandated in other welfare programs would cut utilization substantially and limit use to the really sick.
c. Vigorous crackdowns on fraud. With a program funded by both state and federal revenues, neither jurisdiction is sufficiently focused on program integrity. To some extent, its a problem of a lack of incentive to protect OPM (other people’s money). But when it all comes from a fixed pool of, in effect, state money, the incentive for good management looms larger. The potential to mitigate the effect of the cuts is huge.
Moderates should also bear in mind that an effort to control state outlays for Medicaid will directly benefit education. With Medicaid and schools competing for scarce resources, our schools must share revenues with an entitlement program that gobbles up every penny in sight.
In the past decade, total education spending, in real dollars, has increased almost not at all at the state level while Medicaid spending rising at more than 10% per year.
Good schools will do a lot more for poor people and their children than allowing fraud and excessive use of medical facilities.
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