Office of the Governor Rick Perry

We Need Real Reform, Not More Medicaid

By Governor Rick Perry
Wednesday, July 11, 2012  •  Austin, Texas  •  Editorial

Expecting to extend quality health care access to millions of Americans by pressing them into the existing Medicaid system is a little like expecting to win the Indy 500 in a 1965 Chevy Corvair.

It's just not the right tool for the job.

A fundamental flaw in the Obama Administration's government health care plan is that Medicaid is already on the brink of failure. Dumping millions more individuals into the Medicaid mix will not save it, will not cut any costs, and will not improve overall access to quality care.

In Texas, we have no interest in following the federal directive to expand our Medicaid ranks by over a million, and we are also rejecting calls to establish a so-called "state" insurance exchange designed and ruled by federal guidelines, many of which have yet to be written. Neither of these is the proper role of the federal government and both represent brazen intrusions into the affairs of states.

While some will complain we'll be turning down a lot of "federal money" covering short-term Medicaid expansion, they ignore two important truths. First, this "federal money" is being printed out of thin air - racking up trillions of dollars of debt on the backs of our children and grandchildren. Second, this money will run out, and then we'll be faced with mounting state costs and millions more people on public health rolls.

Meanwhile, states already are facing skyrocketing Medicaid costs that threaten our future and crowd out other funding needs such as public schools and public safety. In Texas, Medicaid already consumes more than 20 percent of the state's general revenue budget, with that percentage threatening to jump dramatically in the coming budget cycle, even without Obamacare's Medicaid expansion.

While Texas is actually better prepared than most states to weather the economic ravages brought on by Obamacare, even our economic health would be gravely threatened. Expanding Medicaid like this is a fast track to bankruptcy for state governments all across our country.

The single best thing we can do to increase access to care is to lower costs through reforms that promote competition. But to provide a safety net for those who need it, we can prevent Medicaid from crushing federal and state budgets by sending Medicaid funds to states in the form of block grants and unleashing the power of state innovation and creativity. This would replace the existing "one size fits all" model with an innovative, flexible form that reinforces individual responsibility, eliminates duplication, controls costs and places the focus squarely on quality health care outcomes, where it belongs.

Of course, the key to making this work would be giving states wide latitude in the development of service delivery systems and allowing for state rate setting, freeing them to pursue locally-appropriate solutions to the particular challenges posed by their unique populations.

Some states might move to a quality-based payment system that pays based on outcomes, not on volume. Others would likely offer Medicaid recipients premium support to purchase private insurance to reduce the reliance on the government system.

These are only a few ideas for real reform, but the fact that the current administration would bypass state-based innovation and efficiency to balloon a financially-troubled entitlement program like Medicaid speaks volumes about how we got into the mess that is Obamacare in the first place.

I look forward to the day when we get past Washington's ill-fated detour into federal command and control - jamming mandates down the throats of the American people - and return to the business of providing real health care reform. This can only be accomplished through reliance on personal responsibility, free markets and utilizing the 50 state laboratories of innovation envisioned by our Founders and reinforced by the 10th Amendment to the U.S. Constitution.

This editorial originally ran in the 'Washington Times'.

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