There is a lot of panic in Washington over what might be “cut” by the Department of Government Efficiency – everyone is protective of their own territory. However, like Congress having record low disapproval ratings while having a 95 percent reelection rate, idea of Elon Musk and the gang taking a sledgehammer to waste is appealing, except when it is to a program or policy you like. But a sledgehammer should never be the first tool anyone reaches for. It should absolutely be in the toolbox and used when necessary, but the smart move is to start off with the scalpel and go from there. If you want to actually create change that lasts, the scalpel is the way to go with programs like Medicare and Medicaid.
There’s an odd disconnect in people’s mind when it comes to entitlements. Anytime there is a discussion of reforming anything related to them, there are the “Keep government’s hands off my Medicare/Medicaid” protesters who come out of the woodwork. As a former health policy analyst at the Heritage Foundation, I’ve seen this every time it comes up and it’s never not funny…and sad.
Of course, those programs ARE government, making it rather difficult to remove the “government” from it.
More than that, millions of people depend on these programs; they NEED them. So talking about them, in any way, always makes people nervous. That’s why talking about them in careful terms is important. Think what you will of the programs, they are lifelines for a lot of people, and they vote. You can’t make anything better or more efficient if you lose elections.
The GOP has moved more toward Medicaid voters as Donald Trump has expanded the party economically, making it political suicide for Republicans to not carefully decide where it makes sense to cut or reform Medicaid – and where it does not.
This may sound counterintuitive for the Republican Party at face value, and I would have shared that belief were it not for a recent conversation with an old boss (once a policy nerd, always a policy nerd), but a tax on Managed Care Organizations (MCOs) is one measure that actually makes sense to preserve. Essentially, MCOs are health care delivery systems designed to reduce Medicaid program costs and improve health care quality, plan performance, and outcomes. The tax dollars that go to these organizations are under strict regulation as to what they can be spent on. Paired with the organizations’ compliance committees and officers who monitor spending, enforce regulations, and discipline employees, MCOs are one of the best ways to keep costs low while ensuring quality healthcare.
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Forty-one states have contracts with Medicaid MCOs, with twenty-one of those states led by Republicans, and over 75% of those GOP-led states spending less than the national average on Medicaid. Texas and Florida have 16% of the nation’s population, but just 10% of the country’s Medicaid spending. They rely heavily on MCOs to run their Medicaid programs and are two of the most economically efficient states in the country. These states didn’t choose MCOs by accident; they realized that a managed care strategy puts constraints on Medicaid expenditures and keeps the focus on patient care.
California just passed a ballot measure to implement an MCO tax that was backed by the state’s Republican Party. By passing this ballot measure, voters overwhelmingly told Governor Gavin Newsom that they want Medicaid dollars to strictly be used for healthcare. Governor Newsom opposed the measure because it reins in his ability to use creative accounting to take more federal taxpayer dollars in the name of “Medicaid” and then use that money for nonhealthcare-related budget items.
Politicians in those states aren’t interested in electoral suicide, nor, as all recent elections demonstrate, are they committing it.
Is it a silver bullet? Of course not. Nothing is. But it is an effective arrow in the quiver, and a bunch of effective arrows can have the same effect as a silver bullet.
If we are going to responsibly reform Medicaid, we have to separate the good from the bad. MCOs provide a roadmap for how federal Medicaid dollars can be implemented with strong guardrails to ensure that taxpayers’ money is used efficiently and for budget items specifically related to health care, like they’re meant to. Doing nothing is no longer an option, as we’re running out of road to kick the can down.
Derek Hunter is the host of a free daily podcast (subscribe!) and author of the book, Outrage, INC., which exposes how liberals use fear and hatred to manipulate the masses, and host of the weekly “Week in F*cking Review” podcast where the news is spoken about the way it deserves to be. Follow him on Twitter at @DerekAHunter.
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