Tags: medicaid | federal | obamacare | health

Changing Medicaid Funding Formula Not 'Barbaric'

Image: Changing Medicaid Funding Formula Not 'Barbaric'
Senate Minority Leader Chuck Schumer D-N.Y. speaks while flanked by Senate Democrats holding photos of people who would lose their health coverage under the Senate Republicans healthcare bill during a press conference at the U.S. Capitol on June 27, 2017, in Washington, D.C. (Mark Wilson/Getty Images)

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Tuesday, 27 Jun 2017 02:34 PM Current | Bio | Archive

The Brezhnev Doctrine said that the Soviet empire could only expand and never give back its gains. A domestic version of the doctrine has long applied to the welfare state — and never so brazenly as in the debate over the Republican health-care bill.

Its reforms to Medicaid are portrayed as provisions to all but forcibly expel the elderly from nursing homes and send poor children to the workhouse. Bernie Sanders has called the bill "barbaric," a word that once was reserved for, say, chattel slavery or suttee, but is now considered appropriate for a change in the Medicaid funding formula.

The Republican health bills have two major elements on Medicaid: rolling back the enhanced funding for the Obama Medicaid expansion, and over time instituting a new per-capita funding formula for the program. The horror.

The Democrats now make it sound as if the Obama expansion is part of the warp and woof of Medicaid. In fact, it was a departure from the norm in the program, which since its inception has been, quite reasonably, limited to poor children, pregnant women, the disabled and the ailing elderly. Obamacare changed it to make a priority of covering able-bodied adults.

Obamacare originally required states to enroll able-bodied adults with incomes less than 138 percent of the federal poverty line starting in 2014. The Supreme Court re-wrote the law to make the expansion voluntary, and 31 states and the District of Columbia took it up.

Traditionally, the federal government had paid more to poor than rich states, with a match ranging from 75 percent for the poorest state, Mississippi, to 50 percent for the rich states. Obamacare created an entirely new formula for the Medicaid expansion population. It offered a 100 percent federal match for the new enrollees, gradually declining to a 90 percent match — supposedly, forever.

So, perversely, Obamacare has a more generous federal match for the able-bodied enrollees in Medicaid than for its more vulnerable populations.

"This higher federal matching rate," writes health-care analyst Doug Badger, "allows states to leverage more federal money per state dollar spent on a nondisabled adult with $15,000 in earnings than on a part-time minimum wage worker with developmental disabilities who earns barely half that amount." According to Badger, West Virginia received seven times as much federal money for spending $1 on an able-bodied adult than for spending $1 on a disabled person.

This obviously makes no sense, and the Senate health-care bill phases out the enhanced funding over several years. But it doesn't end the expanded Medicaid eligibility for the able-bodied. And a refundable tax credit will be available for low-income people that is meant to pick up any slack from Medicaid. This is hardly Social Darwinism.

The other, longer-term change in the House and Senate bills is moving to a per-capita funding formula for Medicaid, with the Senate bill ratcheting the formula down to a per-capita rate pegged to inflation — in 2025. Maybe this will prove too stringent, but it used to be a matter of bipartisan consensus that the current structure of Medicaid creates an incentive for heedless growth in the program.

The way it works now, Mississippi, for instance, gets nearly $3 from the federal government for every $1 it spends. Why ever economize? In the 1990s, the Clinton administration advanced what it portrayed as an unobjectionable proposal to make Medicaid more efficient while preserving the program's core function — namely, a per-capita funding formula.

"The president's per capita cap proposal," the liberal lion Henry Waxman enthused at the time, "responds to the pleas of those who want more cost discipline in Medicaid without terminating the guarantee of basic health and long-term care to 36 million Americans."

But that was before Obamacare lurched the program in the other direction. The Brezhnev Doctrine dictates that what once was common sense must now be unimaginable cruelty.


Rich Lowry is editor of the National Review and author of the best-seller "Lincoln Unbound: How an Ambitious Young Railsplitter Saved the American Dream — and How We Can Do It Again. He has written for The New York Times, The Wall Street Journal, and a variety of other publications. Read more reports from Rich Lowry — Click Here Now.


 

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RichLowry
The Brezhnev Doctrine said that the Soviet empire could only expand and never give back its gains. A domestic version of the doctrine has long applied to the welfare state — and never so brazenly as in the debate over the Republican health-care bill.
medicaid, federal, obamacare, health
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2017-34-27
Tuesday, 27 Jun 2017 02:34 PM
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