By Charles Sauer
The hyperbole used in Congress is intended to scare, to obscure the facts, and to blind us to common-sense solutions. Unproductive as it is, we are likely to see yet another fireworks display of over-the-top language in the coming weeks on Capitol Hill. The Republican Study Committee introduced the State Health Flexibility Act, which is a Medicaid block grant designed to provide the maximum flexibility to states for treatment of our neediest populations. This will assuredly draw consternation and ire from the left, with the intent of maintaining the bureaucratic class of government employees that these programs support while forgetting about the real intent of the program to assist the needy.
In recent years Medicaid rolls and spending have exploded, growing from 22.8 million recipients in 1990 to 53.6 million in 2010. This increase is mainly due to an over-reliance on outdated policies that reward bureaucrats—and managed-care companies—for adding enrollees more than for providing care to the most indigent. These outdated policies have created a system in which a Medicaid card may just be a ticket to stand by for a place in a grossly overcrowded waiting room. The taxpayers are paying more, and the neediest still don’t get timely or high-quality care.
Block grants will largely remove the current perverse incentives by rewriting the federal regulations—actually just deleting most of them. Medicaid funds will still be targeted toward the needy, but the specifics of how those funds are dispersed will be left up to each state. Additionally, states will no longer receive funding based on how many enrollees they have on the books. Each state will receive a set amount of funding to care for its Medicaid population. If it chooses to maintain the current rolls and provide the same meaningless piece of paper to enrollees, we hope that the state’s voters will hold their state legislators accountable. Or, a state could try innovative fixes like the New Jersey Volunteer Physician Act.
A block grant isn’t a new idea, and unlike most ideas in Washington, D.C., which tend to hang on even when they have failed, block grants have already been proven effective. In 1996, President Clinton signed into law a welfare reform bill that created a new welfare block grant. What many people don’t know is that the 1996 bill that took the bloated Aid to Families with Dependent Children (AFDC) program and turned it into the Temporary Assistance for Needy Families (TANF) program had been a long-term goal of President Reagan. Actually, Reagan began working on it during his days as governor in California, and it was one of the first ideas that he chose to pursue as president-elect in 1980.
Despite the widely hailed success of the 1996 reform, it wasn’t an easy lift. The liberal Clinton White House vetoed the proposal twice, and only relented under overwhelming political pressure the third time it landed on his desk. But, President Clinton wasn’t the only detractor, and over-the-top speech like that which we predict for today was rampant in 1996. In one speech on the Senate floor Senator Moynihan famously—and wrongly—said,
Hundreds of thousands—I said hundreds of thousands—of these children live in households that are held together primarily by the fact of welfare assistance. Take that away and the children are blown to the winds. A December 6 administration analysis concludes that the welfare conference agreement will force 1.5 million children into poverty.
Of course he was wrong. Today, while other welfare programs are still on a runaway path where people on food stamps live in mansions and buy lobster, the 1996 reform created a stronger program for those most in need by providing the incentive needed for states to drop their rolls from 12.2 million to 4.4 million individuals, leaving them the same nominal amount of money, down 26% indexed for inflation, to serve only 35% of the 1996 AFDC population. Now states spend less altogether but more on helping their neediest people.
Block grants worked in 1996, and they will work today. The Republican Study Committee, the bill sponsors, and the staff that worked on this brave proposal deserve to be applauded for their efforts. It is now time for the rest of us to put on the proverbial latex gloves to protect us from the contagious hyperbole that is guaranteed to leak out of Washington in the coming weeks like pus from a subcutaneous cyst. Block grants work, the poor need care, and bureaucrats don’t need more jobs. The taxpayers’ money has been extracted; more should go for the intended purpose, and less for costly federal rules and mandates.
