Chapter 4 of The Great Experiment     

Taking Medicaid Off Steroids

  Chapter 4 of The Great Experiment

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Longer-term options:

• More sophisticated efforts to transition toward a defined contribution approach for Medicaid reform (for the below-65, non-disabled population) should include a clear integration plan with the employer health insurance market
• Lack of coordination and transition between Medicaid and private health insurance for working-age Americans causes serious problems for Medicaid beneficiaries (disincentives to gain employment and earn more income, disruptions in coverage and relationships with physicians)
• Simply providing the federal share of Medicaid funding to state governments in the form of block grants does not necessarily solve problems of lack of informed choice, insufficient competition in health benefits design, and poor incentives for improved health care delivery
• A different mix of Medicaid reform policies at the state level might include covering fewer people, leaving more details of health spending decisions to beneficiaries, paying providers for the full costs of care, and measuring its delivered quality more accurately
• Delink levels of state Medicaid spending from federal Medicaid spending (e.g., FMAP reform, assigning federal funding to the upper layers of catastrophic acute care)

Nearer-term options:

• Address current federal restrictions and barriers to state-level reform (waiver process, comparability provisions for covered services, unrestricted choice of providers, and maintenance of effort)
• Put Medicaid on a more fixed budget with upfront funding for a predetermined period of time – either through a broad block grant of federal funds to a state or a capped allotment through the current FMAP formula.
• The federal government should offer states greater flexibility in determining eligibility categories, reimbursement rates, service delivery options, benefit packages, cost sharing, and health promotion incentives. In return, each state Medicaid program should be accountable for measured improvement in health care quality, cost, and access; based on a limited set of outcome measures and benchmarks      

More information about The Great Experiment is available here.