Friday, June 17, 2011

The Right Way to Cut Medicaid Costs

Came across this on The Washington Post with Bloomberg blog on the economy by Ezra Klein.

The White House strongly objects to the notion that they’re going to sign onto a deficit deal that makes its main cuts in Medicaid. But they don’t deny, and in fact endorse the idea, that Medicaid will come in for some cuts. So I’ve spent much of the day asking various health-policy experts the same question: If you need to cut Medicaid, how would you do it?
One way to do it is to simply cut spending on the program. That’s the approach you see in the Republican budget. Currently, the federal government contributes to Medicaid based on need. That means spending goes up if there’s, say, a massive financial crisis that knocks millions out of work. But Republicans want the federal government to tie those contributions to a formula that’s unrelated to need, and in fact grows more slowly than health-care costs. And that would work. You can spend less by spending less. But it’d mean the program either needs to cut benefits for kids, the very poor, and the very old and disabled, or kick some of those people off Medicaid entirely. That is to say, it shifts costs rather than controlling them. And we need a better solution to Medicaid than simply “less of it

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