• “Flexibility” may be necessary, but it’s not sufficient for Medicaid

    There’s a piece by Kate Nocera out today on how states are taking advantage of Medicaid waivers in order to improve their outlook both now, and with the coming implementation of the ACA:

    Waivers must be “budget neutral,” meaning the state must create savings equal to any new federal spending. But the health care reform law provides states with new incentives and tools to create savings, enabling them to draw down more federal dollars.

    “States are doing things with their Medicaid programs that could have been done 10 years ago, but with the federal health law, there’s a lot more motivation,” Harbage added.

    It’s easy to look at things like this in the news, and think that states are using the “flexibility” of waivers to improve their programs. After all “flexibility” and “block grants” are all the rage in some circles as a panacea for fixing Medicaid budget problems:

    The Perry administration has repeatedly denied that its Medicaid reforms have anything whatsoever to do with preparing for the dreaded “Obamacare.”

    “Obamacare remains a misguided, unconstitutional and unsustainable government takeover of our health care,” said Perry spokesman Josh Havens.

    “Gov. Perry has continued to call for more flexibility in the way states administer Medicaid, and the Healthcare Transformation and Quality Improvement Program Waiver … is a step toward more locally tailored solutions that will result in more efficient and effective care,” he said.

    To its credit, Texas is trying to revamp the delivery system for Medicaid in Texas by switching the entire Medicaid population to managed care. This may reduce spending; it could also affect quality. I can imagine that a number of people who undergo this switch will not be happy.

    But Texas’ statements leave out a key part as to why they are happy to try this (emphasis mine):

    Texas Gov. Rick Perry, a staunch opponent of the ACA, won approval for a waiver that could bring in $12 billion to help the state’s hospitals and vulnerable populations.

    Sure, “flexibility” helped. So did a $12 billion increase in Medicaid funding from the federal government. The problem with most of the programs being thrown around right now couple increased “flexibility” with funding decreases. Significant ones, in fact. “Flexibility” may be necessary to make Medicaid better, but it doesn’t appear to be sufficient.

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    • Technically, it’s not a net increase in funding, but yes, you need money to do substantive things, especially in a program as perennially pinched as Medicaid.