California wants single payer and Texas wants free market — say hello to ‘StatesCare’
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California may try to create a statewide single payer healthcare system. Bernie SandersBernie SandersDemocrats ask if they have reason to worry about UK result Buttigieg releases list of campaign bundlers Reject National Defense Authorization Act, save Yemen instead MORE still wants single payer Medicare-for-All for Vermont despite its demise aborning in 2014. Texas wants a free market system. Washington desperately seeks a way out of their healthcare dilemma, especially the imploding Medicaid program.  

Believe it or not, there is a way to make everyone’s dreams come true. Washington just has to do two things: one fairly easy and one very hard.

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The easy part is to give each state (a) a large, fixed amount block grant for Medicaid plus (b) a portion of the state’s federal tax contribution according to how much was spent on healthcare in prior years.

 

The hard part is easy to write but most would say is politically impossible. (I don’t.) Washington should repeal all federal mandates referring to healthcare.

Then, let the states to decide how to structure their healthcare both for the medically needy and the general population.  That means repealing ObamaCare, HIPAA, UMRA, EMTALA, parts of several Omnibus Reconciliation Acts, and Medicaid.

If a state likes ObamaCare mandates, they are welcome to reproduce all its rules and regulations at the state level. The wording is right there in the federal register, all 10,515,000 words of the ACA.

If California wants to try a single payer system for its 38 million people, that’s fine. But the Golden State ought not expect other states to subsidize their choice. California will have a large pot of federal dollars and their own tax revenue to provide care.

If Texas wants a free market healthcare system, Austin should be able to decide without Washington having veto power.

If states want to make compacts with other states for cross border services and/or insurance coverage, drug pricing, or emergency services, they should be free to do so.

There are several clear advantages to what we call “StatesCare”. There is one myth that must be dispelled first.

The myth is federal responsibility for healthcare. First, there is no evidence in the Constitution or Bill of Rights that healthcare is a federal “enumerated” power. Absent such, the Tenth Amendment applies.

Even Medicaid is not a federal responsibility. The original 1965 Medicaid law created a program to be “administered by them” [referring to the states], not run by Washington.

There are several powerful reasons why Washington should bow out and relinquish healthcare control to the states.

Start with the savings. Federally controlled healthcare is dollar inefficient: more than 30 percent of all healthcare spending produces no health care! If the federal government left healthcare to the state's, spending on federal bureaucracy — estimated at one trillion dollars per year — could be used to pay for care. Americans could get a lot of healthcare for $1,000,000,000,000.  

By giving over healthcare to the states and providing fixed, limited amounts for support, we can end the practice of writing blanks checks. Washington can begin to balance the budget.

Who is more responsiveness to you and your immediate needs: a state representative or a congressional representative?

For the past six years, congressional job approval ratings have consistently been below 20 percent. More than 80 percent of Americans trust their state legislators more than they do the federal ones.

If the state produces a healthcare system that does not serve the state’s people adequately, well, the state representative probably lives only a few blocks away.

Medicaid is now the single largest line item in most state budgets and yet spending decisions are made in Washington not in a state capital. Because Medicaid spending is federally mandated, it is the state’s first spending.

All other priorities from education to infrastructure must make do with the leftovers. If the states controlled their healthcare spending, they could allocate spending optimally in the best interests of the state residents.

Who knows better how to serve the needs of Texans: Texas or Washington? You can change the state name to any of the other 49 and get the same answer: your state.  

Finally, think of the political cover that giving healthcare to the states would offer Washington. Congressmen of either party could truthfully say, “If there is a problem, talk to your state representatives. It’s their responsibility, not ours.”

We call this healthcare system “StatesCare”, emphasizing what is important: states are in charge, and states know best how to care for their people. StatesCare can give everybody what they want and cut the Gordian knot tying up Washington.

Deane Waldman, MD MBA, is Emeritus Professor of Pediatrics, Pathology and Decision Science, and Director of the Center for Health Care Policy at the Texas Public Policy Foundation as well as the author of The Cancer in the American Healthcare System. He can be reached at dwaldman@texaspolicy.com.


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