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WSJ opinion piece on Medicaid.
Return Medicaid to Its Rightful Role
By Frank Keating and Doug Beall
730 words
18 July 2017
The Wall Street Journal
Copyright 2017 Dow Jones & Company, Inc. All Rights Reserved.
Rolling back ObamaCare's Medicaid expansion has become the focal point of the health-care debate, and rightly so. Without fundamental change, Medicaid -- expanded or not -- will push state budgets to the brink even as it fails to help the most financially vulnerable Americans.
Consider Oklahoma, our home state. Despite intense lobbying by hospital corporations, the state Legislature stood strong and refused the Medicaid expansion. But the Medicaid rolls increased anyway, and at a dramatic cost to priorities like education, public safety and transportation.
Like most states, Oklahoma used to spend most of its funds on education. But a few years ago Medicaid's rapidly rising costs pushed it to the top of the budget. Today, Oklahoma spends $5.1 billion a year on Medicaid, more than the $3.4 billion a year for K-12 schools and $942 million a year for higher education combined. Medicaid is now crowding out other state priorities, with real consequences in education and beyond: lower teacher pay, fewer textbooks, deferred road maintenance, fewer mental-health treatment options in the state justice system to prevent incarceration of nonviolent offenders, and -- within the Medicaid program itself -- lower reimbursement rates for doctors.
Something has to give. If policy makers want to preserve a functioning and reliable safety net for low-income citizens with serious health challenges, they must face the fact that Medicaid is failing.
The ObamaCare expansion sent Medicaid's already soaring costs even higher. It dramatically increased spending in states like Illinois, Ohio and Washington, which were lured by temporary federal funds and rosy projections for economic recovery after the 2007-09 recession. What's particularly perverse is that ObamaCare pays states more for the able-bodied adults newly covered under the Medicaid expansion than for people with serious disabilities under the original program.
As Illinois expanded Medicaid, more than 800 people already on the program's waiting list died, according to state documents reviewed by the Foundation for Government Accountability. Even in states that refused the expansion, surging costs have cut people off from care while leaving them still technically "covered."
Medicaid's unsustainable path was paved by the incentives built into its structure, combined with earlier expansions like the State Children's Health Insurance Program, passed in 1997. Oklahoma's share of spending on Medicaid in 2003 was $714 million. By 2016 that had ballooned to $2.1 billion, an increase of 194.1%, according to the Oklahoma Health Care Authority, the agency responsible for administering Medicaid in Oklahoma. No other significant piece of the state budget grew so fast.
Over the same period, enrollment in Oklahoma skyrocketed from just under 500,000 to over a million. This means one-quarter of the state's population is on medical welfare. Medicaid covers 57% of all births in Oklahoma, according to the Oklahoma Health Care Authority. Up to 72% of all children are on Medicaid at some point in their first five years, according to the authority. Government dependency expanded during a period of significant income growth here. Per capita income in Oklahoma grew 70.9%, from $26,720 in 2003 to $45,682 in 2016, according to federal data at the Bureau of Economic Analysis.
Part of the problem is that politicians want to score points by getting people "covered." But ObamaCare's monomaniacal focus on coverage has led to shoddier care at higher costs. Today's health-care debate should aim at the opposite: increasing the quality of care, not merely coverage by insurance or welfare.
A start would be refocusing Medicaid on its original mission of caring for the poor and those unable to do it for themselves. That means changing the program's incentives to allow people more responsibility for their own health outcomes. It also means giving states the freedom to explore options like health savings accounts, direct primary care for Medicaid patients, and systems to remove enrollees who abuse the program.
Now is the time for fundamental Medicaid reform -- for the good of every state and the most vulnerable people who depend on the program.
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Mr. Keating served as governor of Oklahoma, 1995-2003. Dr. Beall is Chief of Radiology Services for Clinical Radiology of Oklahoma. Both are board members of the Oklahoma Council of Public Affairs.
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