Give Medicaid Dollars Directly to Patients

Each beneficiary could get $7,000 a year in a health savings account.

 
 

 
PHOTO: DAVID ZALUBOWSKI/ASSOCIATED PRESS

As Republicans take another crack at devising a plan to replace ObamaCare, here’s an idea they should consider: Give each Medicaid patient a health savings account—and put $7,000 in it every year.

Under ObamaCare, Medicaid has become the only option for millions of Americans. But that doesn’t mean much if the doctors in their communities don’t accept new patients through the program—and 30% of physicians don’t.

The GOP’s recently benched health-care bill would have substantially reformed Medicaid by giving the states block grants, along with more flexibility on how to spend the money. But there’s a better model. Republicans should empower Medicaid patients by providing funds to them directly, which would allow them to build a personal safety net that could last a lifetime.

 

Washington and state governments spent $545 billion in 2015 on 73 million Americans covered by Medicaid and the Children’s Health Insurance Program. Instead lawmakers could take $511 billion of that total, divide it equally among enrollees, and give each one a health savings account with $7,000 a year. This would be real money for the poor, stored in real private accounts.

Recipients could use the deposit to buy health insurance and cover the cost of prescriptions, copays, deductibles and other related expenses. Unspent money would carry over to the following year. Enrollees could share that $7,000 with a sick spouse, sibling, parent or child.

Most recipients would probably use the funds to buy private health insurance, many for the first time. The average annual premium last year for an (overpriced) bronze plan on the ObamaCare exchanges was about $3,100 for a 30-year-old, $3,500 for a 40-year-old, $4,900 for a 50-year-old, and $7,400 for a 60-year-old. After that, at age 65, Americans qualify for Medicare.

Those figures mean that even after paying the premiums, all but the oldest Medicaid recipients would have money left over each year to save or spend on additional health-care costs. Enrollees who are relatively young and healthy soon would build personal safety nets worth tens of thousands of dollars. This would not only be good for them, it would stabilize Medicaid, which has become an enormous and unpredictable burden on state budgets.

Because bronze-plan deductibles are high—a 2017 average of about $6,100 for an individual and $12,400 for a family—some patients, especially those over 59 or with serious health problems, will need more help. Lawmakers could allocate the remaining $34 billion in the Medicaid budget line to assist them.

Under this plan, ObamaCare’s ban on pre-existing conditions should be kept in place for a set period with a firm sunset date. That would give Medicaid recipients time to buy in without penalty. Increasing the number of people enrolled in private insurance would then help spread risk and lower costs.

This plan would be a major improvement on both ObamaCare and the Republican proposal, creating personal safety nets and giving tens of millions access to high-quality health insurance. It might just be popular too.

Mr. Haskins is executive editor and Mr. Hamilton a research fellow at the Heartland Institute.

 https://www.wsj.com/articles/give-medicaid-dollars-directly-to-patients-1492036394

One response to Give Medicaid Dollars Directly to Patients

  1. B.Hendricks April 20th, 2017 at 8:58 pm

    “Give Medicaid Dollars Directly to Patients” – flaws:

    This plan does nothing to offer exemptions from ObamaCare.

    This plan does nothing to benefit working families NOT on Medicaid.

    It does nothing to untangle and change the complexion of other government health care programs like Medicare, VA, FEHB, TRICARE.

    This plan is an ongoing, open-ended cash-based subsidy.

    There is a better way.

    The U.S. Health Care Freedom Plan is the only comprehensive, citizen-centered health care plan in America. It ‘resets’ the health care industry to present a clean, efficient and responsible system. Most importantly, this plan restores individual freedom and liberty for all participating Americans.

    The Plan:

    The U.S. Health Care Freedom Plan is available to each and every U.S. citizen – with no coverage mandates. Each U.S. citizen who wishes to participate will be granted a full and complete exemption from the ACA.
    This plan offers freedom of choice and equal justice for all. Those Americans who might wish to stay with the ACA may stay (‘If you like your ObamaCare, you can keep your ObamaCare’).
    Each participating U.S. citizen shall receive a credit extension, through a special Federal Reserve Citizens Credit Facility, of $25,000, electronically deposited into a Medical Savings Account (MSA) – for direct allocation toward family health care needs.
    Private insurance – Families shall be allowed to enroll in high-deductible ($10,000 – $15,000) major medical plans, to include basic, ‘no frills’ medical plans which best suit their individual needs and desires. These streamlined plans would lower premium costs for employees and employers, encouraging employers to cost-share savings with employees through incentive-based employer MSA contributions.
    Policies would not be automatically loaded with expensive government healthcare mandates.
    Those with extraordinary medical issues may be included in a high-risk category, with such plans being eligible for a government subsidy (similar to current Medicare Advantage).
    Federal / state programs – Individuals enrolled in Medicare / Medicaid / VA / TRICARE / FEHB programs would maintain their covered status, with an annual deductible of $5,000 per year per enrolled family member, for a period of five years for those benefits. The dedicated MSA funds would fully fund the offset for the higher ($5,000) deductible feature for that five-year period. MSA funds could also be used to pay Medicare supplement premiums and other potential co-pay obligations.
    Where health care services paid by patients directly with MSA funds, providers would not be bound by federal / state rules pertaining to Electronic Medical Records (EMRs), and other unnecessary administrative burdens.

    Benefits:

    Lower health care costs – With the elimination of millions of minor insurance claims across the nation over the course of each month, system-wide efficiency would improve, medical costs would drop significantly, and the direct patient-provider relationship would be restored. Medical professionals would not have to answer to HMOs, insurance companies, or government agencies in providing basic day-to-day healthcare access for their patients.

    Scoring – if 300 million U.S. citizens were to participate in the plan, the total dollar transfer into family-based Medical Savings Accounts (MSAs) would amount to $7.5 trillion.

    The potential cost savings from the $5,000 deductible provision for the approximate 150 million people currently enrolled in Medicare (55 million), Medicaid (72 million), VA (6.16 million), TRICARE (9.5 million), and FEHB (8.2 million) would amount to just under $3.75 trillion over the first 5 years (or, one-half the $7.5 trillion initial roll out cost).

    Summary:

    This plan would generate trillions of dollars in cost savings from streamlining, vastly improved efficiency, and reductions in waste and fraud.

    This plan would improve quality and ease of access to health care for all participating Americans.

    For patients: It would dramatically lower the cost of health care, while improving quality and access for all who chose to participate.

    For providers: It would restore the patient-provider relationship and significantly reduce massive cost and time burdens imposed by a centralized system.

    The U.S. Health Care Freedom Plan an integral part of a larger, comprehensive economic plan:

    The Leviticus 25 Plan 2018 – $75,000 per U.S. citizen

    The Leviticus 25 Plan 2018 (2267)

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