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Commentary

Growing and Collapsing
Grace-Marie Turner, National Review Online, 12-6-05

Turner argues that the people who are doing the most harm to Medicaid are those who are resisting needed reforms. As long as Medicaid pretends that it is a gold-plated program that can be all things to all people, it will short-change low-income Americans who rely on it for a safety net.

Medicaid is an important program for people with severe disabilities and the poor who have no other options for health care. The more political leaders expand this program to the middle class, the fewer resources there will be to take care of the truly needy.
Legislators have swollen the ranks of their Medicaid populations in good times, seduced by federal matching funds that match at least one dollar for every dollar states spend and that match 3 federal dollars to every $1 that poorer states spend. But the lure of this federal Medicaid 3-for-1 sale has been a bad deal for states that have repeatedly expanded access to the program. When times get tough, they either must cut benefits or throw hundreds of thousands of people off the rolls. That’s what is happening in Tennessee, where the state’s decade-long experiment with TennCare has reached a political and fiscal crisis.
But it isn’t just the expense: The program’s complexity befuddles government experts, politicians, and especially recipients. The New York Times in October ran a series of articles on Medicaid. Here was one conclusion: “Too many people who need Medicaid are bewildered by it,” wrote correspondent Richard Pérez-Peña.

The problem is that the politics of entitlement has collided with the program’s mission to serve as a safety net. As the program’s purported benefits expand, states have tried to control costs through byzantine regulations and price controls that strangle innovation. Unless bold reforms are enacted soon, Medicaid will turn from a safety net into a strangling noose for states and beneficiaries alike.



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