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Medicaid choices: There are more than two options

August 09. 2012 12:40AM

As New Hampshire lawmakers consider whether to expand Medicaid in the way once ordered but now only strongly suggested by the federal Affordable Care Act, no one seems to be asking the most basic question: Why should we accept being limited to only two choices?

The Affordable Care Act originally required states to expand Medicaid eligibility to 133 percent of the federal poverty level or lose their Medicaid funding. The U.S. Supreme Court ruled that unconstitutional, so now states get to decide whether they should accept the ACA's terms of expansion or stick with their existing systems. So states are discussing Medicaid changes entirely on President Obama's terms.

Medicaid consumed 22.3 percent of state budgets in 2010, making it the most costly program for U.S. states, according to the National Association of State Budget Officers. States used to spend more on education than any other program; now it is Medicaid.

The Affordable Care Act would accelerate that trend, when it needs to be reversed. In addition to making tens of thousands more Granite Staters eligible for government-funded health insurance, the law would bring thousands more onto the rolls through the individual health insurance mandate. Those already eligible for Medicaid but not participating would have to choose between buying insurance or getting it 'free' from the government. Most are likely to go on Medicaid.

There is a better way. States could be given more flexibility, not less, in how they spend Medicaid dollars. That would encourage states to spend less, not more, and make the system more efficient.

One good way to do this is to block grant Medicaid money to the states. That would encourage innovation and competition. Some states would spend every dime, others would seek savings. The experimentation would lead to improvements in the program and cost savings as states looked to others for ideas.

States already have some flexibility. Giving them more freedom to experiment makes more sense than tying them to a single Washington-dictated plan.

Rather than accepting the premise that New Hampshire has to either stick with its current Medicaid program or adopt the one President Obama likes best, why is New Hampshire not fighting for more flexibility?

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