Medicaid is in dire need of help, and in Texas, the federal government should give the state government a lump sum for the program that it can figure out how to spend itself, says former House Majority Leader Dick Armey.
The lump sum is known as a block grant.
Medicaid is jointly funded by the federal government and states. So Armey is referring to how the federal portion is disbursed. Now the feds pay for a set percentage of each state’s Medicaid costs.
“No one spends someone else’s money as wisely as he spends his own,” Armey and former Texas state Rep. Arlene Wohlgemuth write on Politico
“Medicaid spending has quadrupled over the past four decades . . . Medicaid is on an unsustainable path — unless we offer innovative ideas to solve the spending problem and improve the program’s quality of care.”
Their first idea is for the block grant. “This way, funding would no longer be subject to state spending patterns and schemes to pull down more federal dollars.” States would have an incentive to stabilize Medicaid spending.
“It would also give states more control over program design, and shift accountability for outcomes to them,” the duo writes.
Once the grant program has begun, Texas should shift Medicaid from a defined benefit program to a defined contribution program for most eligibility groups, they say. That means users of Medicaid would put a fixed amount of money into the system rather than receiving fixed benefits.
“This would undoubtedly lead to cost savings and a more sustainable system over the long term,” Armey and Wohlgemuth state. “With skin in the game, and without an unlimited guarantee of state and federal funds, Medicaid enrollees would be more efficient in their use of health care and more engaged as consumers.”
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