While President Donald Trump’s efforts to repeal and replace Obamacare have dominated the news, he also plans to reform a larger and arguably more broken program: Medicaid. In an interview with NBC’s “Today” show, Trump advisor Kellyanne Conway said Trump wants to “block-grant Medicaid to the states” to ensure “those who are closest to the people in need will be administering.”
Conway’s comments echo Trump’s campaign promise to “maximize flexibility for states via block grants so that local leaders can design innovative Medicaid programs that will better serve their low-income citizens.” Block grants would cap federal Medicaid funding and let states decide how to use those dollars. It would introduce flexibility and budget discipline to a program that sorely needs both.
Medicaid Soaks Money Away From Other Priorities
Since its inception in 1965, Medicaid has operated as an open-ended entitlement. The more state Medicaid programs spend on health-care programs for designated recipients, the more the federal government reimburses them. On average, states receive $1.33 for every $1 they spend on Medicaid.
While Medicaid’s current framework sounds like a generous deal for states, Medicaid’s funding formula incentivizes policymakers to expand the program at the expense of core state government functions. A report by the Mercatus Center shows that as Medicaid’s share of state budgets grow, state spending on roads, schools, and public colleges shrink.
Continue reading at The Federalist.
Today’s Young Voices Podcast features Young Voices Executive Director Casey Given and YV Advocate Charlie Katebi on the future of Obamacare. Charlie weighs in on the potential negative consequences of letting the insurance market fall into disarray.
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As President-elect Donald Trump prepares to enter the oval office, Sen. Mike Enzi (R-Wyo.) hopes to weaken ObamaCare through a process known as budget reconciliation. This will repeal most of ObamaCare but leave the law’s onerous insurance regulations in place and potentially worsen our already dysfunctional healthcare system.
Budget reconciliation is a parliamentary maneuver that allows Congress to pass budget-related bills with only 51 votes. Enzi plans to use this process to override a potential filibuster from Democrats and repeal ObamaCare’s tax and spending provisions, such as the individual mandate, employer mandate, health insurance subsidies, and Medicaid expansion.
“Congress already passed a repeal of ObamaCare in early 2016 using the same process, but President Obama vetoed the legislation,” said Enzi’s spokesman, Max D’Onofrio. “With a new president incoming who favors ObamaCare repeal, Congress has made it a priority to repeal and replace ObamaCare. This will provide relief to Americans whose premiums have risen wildly and who no longer have the healthcare options they had in the past.”
However, repealing ObamaCare’s subsidies and taxes without also scrapping its insurance regulations could make health coverage even more expensive.
Continue reading at The Hill.
Donald Trump is serious about wresting control of our healthcare system away from the federal government and giving power back to patients, and he just showed it by naming Rep. Tom Price to head the Department of Health and Human Services.
Price is both an ardent opponent of Obamacare and an enthusiastic advocate for a more patient-centered healthcare system.
While virtually every Republican in Congress opposes Obamacare’s one-size-fits-all approach, Price has actually proposed detailed policy alternatives that make health insurance more affordable and accessible to patients.
Price’s plan, the Empowering Patients First Act, would improve American healthcare in three important ways. First, it would eliminate Obamacare’s provisions that increase the cost of health insurance. It would abolish the ACA’s “essential health benefits” — rules that force people to buy coverage for a range of expensive services they may not need or desire. These mandatory benefits include maternity care, newborn care, as well as pediatric vision and dental care, even if someone doesn’t have children.
Continue reading at Washington Examiner.
A presidential candidate wants to repeal part of the Affordable Care Act. Normally this would not be news, but the candidate in question is Democratic frontrunner Hillary Clinton, and the ACA provision is the Cadillac Tax, a levy on expensive employer-sponsored health insurance plans. The tax is deeply unpopular—it has been delayed to 2018—and with Democratic members of Congress under heavy pressure from labor unions who oppose the tax, itcould be repealed altogether. While the tax is certainly a poorly-designed policy, it does have a real purpose, and lawmakers should have an alternative solution ready before they repeal it.
The Cadillac Tax seeks to address the unlimited tax deduction for employer-sponsored health insurance. Since there is no comparable deduction for insurance purchased individually, employers have a massive incentive to provide their employees with insurance rather than letting them purchase it on their own. Currently, 90 percent of privately insured individuals get coverage through their employers.
The deduction is problematic for many reasons. Most obviously, it costs $250 billion per year—a figure subsidized by poorer individuals whose employers do not offer health insurance. It also encourages employers to give workers raises in the form of more-expensive health insurance plans rather than cash wages, since wages are taxable and health insurance is not. These employer-sponsored health insurance plans reduce competition through “insurance lock:” since employed individuals are disincentivized from shopping for their own health coverage, insurance companies are less likely to maintain both low prices and high quality. If you want a better plan, you might have to leave your job.
Read the full piece at Economics21.