The Sacred Cattle Are Lowing: State Medicaid

Yesterday the analysts at the Texas Public Policy Foundation released findings and recommendations regarding the crisis in State Medicaid Spending. As expected, the liberal-progressive herd began denouncing the proposals as 'cold-hearted, mean, eeevil' attempts to trod upon the poor. However, even without the implementation of Obamacare, the State Medicaid program has been growing far beyond a program for 'the poor,' and without reforms is on course to devastate the Texas economy.

The TPPF analysis found that the federal program forces Texas to spend about 28% of the state budget on Medicaid, but that figure will rise to 46% in 2014. Program costs are increasing at a rate of about 9% each year, but federal funds for our state have decreased significantly- by about $1.25 billion for the 2012-2013 budget cycle. Under Obamacare, state Medicaid costs will increase by 177%; If Texas is to survive, we must look for reforms and alternatives to Medicaid.

Lawmakers are looking at a proposal to transition the state from inefficient and costly Medicaid to a new TexHealth program that would provide better health care for the poor at a lower cost to taxpayers. Using free-market principles, the plan would create an interstate compact and health insurance exchange; a measure fiscal Conservatives have long advocated as a means to lowering costs. Unlike Medicaid, Texhealth would not permit Texans outside of poverty definitions to manipulate and hide personal assets as a means to qualify for full tax-payer funded health benefits.

Particularly distasteful to Liberal-Progressives is the proposal to make the state contribution to coverage subject to participant income. Under the current system Medicaid pays in full for all of the participants' health-related expenses and co-pays for care are not permitted; TexHealth would require some participants to contribute to their own health costs on a sliding scale according to income. In so doing, only the truly poor would receive a 100% subsidy, other participants would contribute to costs, and even middle class families could participate in the cost-lowering exchanges.

With or without Obamacare, state Medicaid spending is growing at an unsustainable rate, and does not allow sufficient cost-saving measures. Lawmakers have an opportunity this session to reform our healthcare spending to improve options for both poor and middle class families, and in a way that will insure the long-term fiscal health of the program and Texas in general. Despite the bovine rhetoric, when it comes to entitlement programs, Liberal-Progressives hate 'change,' unless it involves expansion and increased spending. If we are to survive, we must reform healthcare spending. It is the truly compassionate thing to do.