Medicaid and Health Reform
Stuck with the tab? (NGA photo)
Kevin Sack and Robert Pear reporting for the New York Times raise a non-crazy worry about the health reform legislation before the congress, gubernatorial concerns that Medicaid expansion will wreak devastation on state budgets. My go-to guy on Medicaid issues says the House bill handles this concern fairly well, but that the Senate legislation is less clear. And certainly when you become very concerned with slightly arbitrary metrics like CBO scores across a 10-year window rather than with overall fiscal responsibility, it creates incentives to craft legislation that shunts costs onto the states thus “hiding” them from the prying eyes of the scorekeepers.
To the best of my knowledge, the large state role in Medicaid is extremely ill-advised. In general in the United States you get better “quality of government” at the federal than at the state level. And in macroeconomic terms, state Medicaid responsibilities tend to work as “automatic destabilizers,” increasing burdens on state government just when the states can’t afford to spend money. In an ideal world, you’d see a much larger federal role in Medicaid and this would reduce the severity of recessions and in general reduce the need for contentious debates about stimulus bills. You’d also almost certainly get better health care coverage for poor people in most of the country.
But even though switching the financial responsibility from the state to the federal level wouldn’t involve any net change in the tax burden or the size of the public sector, it would “look like” a big increase in taxes and spending. So that’s obviously off the table for now. But something to keep an eye on during the health reform debate is that while Medicaid expansion is good, mandated increases in state-level Medicaid expenditures are pretty questionable policy. Better to have the federal government pick up the bulk of the tab for expansions.
9 Responses to “Medicaid and Health Reform”
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July 20th, 2009 at 10:20 am
Medicaid/Medicare are already administered at the state level; state’s are reimbursed by the federal government. So I’m not quite sure what the point of this is; other then to suggest that hiding the costs by pushing them on to states would be very, very wrong.
July 20th, 2009 at 10:21 am
The MORAL PANICKER has never thought about the quality of governemnt at state and local levels (largely because he is not a person as opposed to an internet persona). Maybe the states get stuck with the bad jobs. Are there DMVs run by the federal government?
July 20th, 2009 at 10:41 am
I am now officially lost on Healthcare Reform. As in, I am too stupid to figure who is right and what’s the best plan.
Nevertheless, I will still direct my rage at the “blue dogs” and “wise, responsible, reasonable Centrists.”
July 20th, 2009 at 10:45 am
The “quality of government” line deserves to be backed up or tossed aside.
State politics is largely hopeless, and for those parts of the state government that are excessively politicized, the hopelessness appears to leach in. But I think that’s a general rule: consider the Bush DoJ, for instance.
What you can say is that state budgets are even more subject to whim and legislative stupidity, and that carries over to the parts of state govt. affected by budget cuts or reorganization.
July 20th, 2009 at 11:00 am
Medicare is not administered at the state level. Medicare is administered operationally through private contractors but they are 100% subject to federal oversight. CMS has regional offices for things like provider appeals, but these are staffed with federal employees. The most involvement states have with Medicare is that some state provider regulatory agencies (Florida, for instance) serve as the Medicare certification entity for hospitals and SNFs within the state.
I realize that simply ending Medicaid would probably be too difficult at this point in time, but it is a worthwhile goal to transition as many people as possible to a federally administered public option. Medicaid is insane — 50 separate bureaucracies, some of which are really professional (California and Florida and Alabama and Illinois) and — how can I say this nicely? — some of which make me realize that in many states employees are not hired on a meritocratic basis.
July 20th, 2009 at 11:04 am
Let me also say that many states have gotten a semi-free ride off of other states in the financing of their Medicaid programs. The usual suspects (California, New York and Illinois) have basically financed the usual miscreants (Mississippi) and any claim by these states that they can’t afford to do any more is as much a result of state priorities as it is of state budgets. They wail the same tune in good times and bad. Stop listening.
July 20th, 2009 at 11:06 am
Can someone please help me?
I can’t figure out where Medicaid would fit in if we had a public option. If there is a mandate that everyone carry health insurance and if there is a public option, where does Medicaid fit into that? Does it administer the public option? Who administers it? I know there are several ideas bouncing around and I’m just using this as an example but I guess I just don’t understand the necessity of Medicaid in a situation where everyone (pretty much) is covered by some form of private or public health insurance.
July 20th, 2009 at 11:18 am
Medicaid is for people under whatever poverty line the feds draw for participation in other options. It makes no sense, I had the same thought, but for a whole host of transition and payment issues it would be hard to just end Medicaid at the same time the mostly working uninsured are folded into the system. Eventually, Medicaid would be limited, hopefully, to its traditional AFDC population and — crucially — the elderly who rely on it for long term care. That’s what no one is usually willing to say about Medicaid. A huge proportion of Medicaid expenditures (as much as 80% in states like Pennsylvania) go to the elderly in nursing homes who have no means to pay for long term care, even though the number of people served by Medicaid are disproportionately the young and impoverished. Trying to find a solution for that issue right now would really blow things up.
July 20th, 2009 at 6:24 pm
No amount of lipstick will save this pig