States need freedom to improve health for Medicaid recipients

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As Congress continues its work on replacing the Affordable Care Act (ACA), Ohio leaders like Governor John Kasich and Senator Robert Portman are rightly concerned about the impact these changes will have on Medicaid recipients, especially those who received Medicaid through the ACA expansion. However, two critical facts are missing from the current debate.

First, Medicaid is a substandard health care system and we have to find a way to transition people into insurance that offers them better care. Second, Medicaid is not fiscally sustainable at either the state or federal level. No one, on either side of the political divide, wants people to be uninsured, but glossing over these two critical facts won’t help solve the real problems Medicaid faces and it won’t provide people with quality healthcare.

{mosads}Studies have shown that people who are on Medicaid don’t have better healthcare outcomes when compared to someone without Medicaid. In other words, people who receive Medicaid spend more money on healthcare but have the same risk of heart attacks and had the same blood pressure levels.


There are numerous reasons for this. One problem is, Medicaid reimburses doctors and hospitals at a lower rate than private coverage, so recipients have trouble finding doctors who take Medicaid. Doctors who do take Medicaid often have less autonomy in deciding how to treat their patients. Medicaid recipients are more likely to visit emergency rooms rather than seeking more effect care with a primary care physician.

Given the poor quality of care, why would we want to put more people on Medicaid? The focus shouldn’t be on protecting a system that has a mixed record of providing healthcare, but instead on finding solutions that offer better care to enrollees. We need to change Medicaid overall and think of how to deliver the best care, to the most patients for the best price.

Here in Ohio, the Ohio Department of Medicaid recognizes the need to offer quality healthcare and is actively piloting programs to deliver better care to Medicaid recipients. The problem is, there is only so much improvement that can be made without Washington lifting some of its burdensome regulations.

Fortunately, federal officials want to make it easier to grant Medicaid waivers that would allow states more flexibility to innovate in their Medicaid programs. Current proposals from the Ohio House would have Ohio seek a waiver to help Medicaid recipients save more for healthcare and transition to real health insurance. This Healthy Ohio plan is based on Healthy Indiana, which is working well for our westerly neighbor.

Now back to the sustainability of Medicaid. As with all taxpayer funded programs, government officials must ensure that money is being spent wisely and efficiently, and that the program achieves its goals. Medicaid fails in all three of these.

In Ohio, we spend a quarter of our state budget on Medicaid, and it is only growing. That means less money for education, roads, prisons, and a host of other government services. The good news is, the reforms I have mentioned will go a long way to improving healthcare delivery and will help reign in the unsustainable costs of Medicaid.

Modern day presidents from Ronald Reagan to Barack Obama have proposed budgets that reduce federal funding to Medicaid and increase the state’s share. Medicaid costs are only growing, and the federal government has made clear they will pay less in the future. If Medicaid is not reformed, the only other option is spiraling tax increases on Ohioans. That isn’t good for Ohio’s families and won’t improve the quality of care people get through Medicaid.  

Ignoring the problems in the current Medicaid system will only continue to relegate people to poor quality healthcare at unsustainable costs. But we have a real opportunity to actively create a new Medicaid program. In doing so, Ohio can balance fiscal responsibility and offer better care to those most in need.

Rea S. Hederman Jr. is executive vice president and chief operating officer of The Buckeye Institute, a think tank promoting free market principles, and is an expert in healthcare policy.


The views expressed by contributors are their own and are not the views of The Hill.

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