Expand Health Care, Not Government

January 30th, 2015 by Leave a Comment

By Nina Owcharenko

nowcharenkoIt’s official: Indiana has given in and adopted ObamaCare’s Medicaid expansion. Before jumping into the weeds of Indiana’s Medicaid expansion agreement with the Obama administration, it is important to realize the agreement still fails some basic principles of reform.

First, it adds more people on to the Medicaid rolls, not fewer. The Indiana plan puts 350,000 more Hoosiers on to the overstretched welfare program. Reform should be grounded in reducing Medicaid dependence, not increasing it.

Second, it requires more government spending, not less. The Indiana plan will increase Medicaid spending by having the federal taxpayers pick up 90 percent of the costs. Again, reforms should aim to reduce government spending, not increase or merely shift it.

Third, it makes the road to repeal of ObamaCare harder, not easier. The Indiana plan offers the Obama administration another big gain in expanding ObamaCare in the states. Just as the states have clearly rejected ObamaCare’s exchanges, states should equally clearly reject this administration’s relentless Medicaid expansion.

This Medicaid expansion, like the others, loses sight of the fundamentals.

Medicaid needs reform, not expansion. This federal-state health care program provides health care to over 60 million Americans and consumes a growing portion of state and federal budgets. Research shows a long history of Medicaid enrollees having worse access and outcomes than privately insured individuals. Due in part to low reimbursement, one in three doctors refuses to accept new Medicaid patients. Despite access issues, Medicaid spending continues to grow.

Instead of reforming Medicaid, the Patient Protection and Affordable Care Act expands eligibility to all individuals earning less than 138 percent of the federal poverty level (FPL) The Medicaid program is already struggling to provide care to its core obligations – a diverse group of low-income children, disabled, pregnant women, and seniors. Adding more people further exacerbates Medicaid’s underlying problems.

The expansion of Medicaid fuels a larger trend under ObamaCare: government coverage supplanting private coverage. By 2021, 46 percent of all Americans will be dependent on the government for their health care. Of this group, 86.9 million will be on Medicaid/Children’s Health Insurance Program (CHIP), followed by 64.3 million on Medicare and 23.4 million enrolled in government exchanges. This will push U.S. health care closer to a government model.

There are far better ways to expand coverage and care for low-income persons. It’s time to get back to the basics.

Congress should embark on a reform agenda that is grounded in the following policy cornerstones: (1) reforming the tax treatment of health insurance so that individuals choose the health care coverage that best fits their needs (not the government’s dictates); (2) restoring commonsense regulation of health insurance by devolving it back to the states; and modernizing (3) Medicare and (4) Medicaid by adopting policies that harness the powerful free-market forces of choice and competition.

Read the Georgia Public Policy Foundation’s proposal on alternatives to Medicaid at http://www.georgiapolicy.org/?p=9193.

This commentary by Nina Owcharenko, Director of the Heritage Foundation’s Center for Health Policy Studies, first appeared in The Daily Signal and is published with permission.  

 

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