More Bold Proposals to Solve the Medicaid Crisis

Kathryn Nix / May 25, 2011

Successful health care reform requires bold changes, not more of the status quo. Nowhere is this truer than in the case of Medicaid, the federal-state partnership to provide health care to the poor and disabled. Unfortunately for taxpayers and program beneficiaries, this was neglected by Obamacare. The new law leaves failing policies in place while expanding the program to cover more than 20 million new individuals. This will only exacerbate existing problems.

Despite the bad policies that are now law under Obamacare, some in Washington continue to recognize that Medicaid is in crisis mode, pushing for reform to reduce the program’s burden on taxpayers while improving its quality. Last week, Senators Tom Coburn, M.D. (R–OK), Richard Burr (R–NC), and Saxby Chambliss (R–GA) introduced legislation to give states flexibility to fix Medicaid.

Medicaid is on an unsustainable path and promises to consume a growing portion of state budgets and increase deficit spending. In response, state legislators have begun to aggressively seek ways to reduce the program’s cost while also improving it. But due to federal mandates and bureaucratic barriers to change, this is easier said than done. Both the stimulus and Obamacare enacted maintenance-of-effort (MOE) requirements that restrict states from altering Medicaid eligibility. Moreover, states must apply for waivers from the Department of Health and Human Services (HHS) to make significant changes to the programs—a lengthy and often unsuccessful endeavor. (more…)