August 15, 2016 Newsletter

Americans should be more worried than ever about Medicaid, which provides health insurance for America’s most vulnerable. A government report released last week has found that the cost of Medicaid expansion to millions of low income citizens is increasing faster than expected. The cost of the $500 billion program is expected to rise to $890 billion by 2024. Yet more spending doesn’t necessarily mean better care for beneficiaries.  The expansion of Medicaid is one of the most misguided parts of ObamaCare—shamefully expanding second-class health care for the poor.

Start with the difficulty patients have getting a physician to see them. Some 55% of doctors in major metropolitan areas refuse to take new Medicaid patients, according to a 2014. The Department of Health and Human Services reported that same year that 56% of Medicaid primary-care doctors and 43% of specialists weren’t available to new patients.

Medicaid enrollees who manage to see a doctor typically experience outcomes worse than those under private insurance. That means more in-hospital deaths, more complications from surgery, worse posttreatment survival rates, and longer hospital stays than similar patients with private insurance. Medicaid’s restricted access to drugs, specialists and technology likely accounts for these failures.

Hillary Clinton’s plan for Medicaid is in line with her plans for health-care reform—expand government programs and entrench the power of the state over private insurance. For the poor, this means more of the same Medicaid. She would also lower the age for Medicare to 55 from 65, let undocumented immigrants join the taxpayer-subsidized ObamaCare exchanges, and impose price controls on drugs, among other ideas.

Donald Trump’s campaign says he supports competition among insurers and drug companies through regulatory reform and greater transparency. He emphasizes health-savings accounts. He supports Medicaid block grants to permit state-based innovation. These are sound principles, albeit without details.

More insight into Trump’s health care plan might be gathered from two of his key associates, Ben Carson and Mike Pence. Last December Dr. Carson proposed universal, markedly expanded, transferable health-savings accounts, along with expanded private-insurance options for everyone. He endorsed high-deductible plans to lower insurance premiums and reduce the cost of care by exposing health-care purchases to value-conscious consumers. He also advocated replacing Medicaid by using its federal funding to pay private-insurance premiums and seed health-savings accounts.

Mr. Pence has promoted similar ideas as governor of Indiana while reforming traditional Medicaid. Mr. Pence’s Healthy Indiana Plan 2.0 rests on three principles: individual health-savings accounts; obligatory out-of-pocket payments, starting at $1 a month to health-savings accounts for the lowest-income earner and copayments for nonemergency use of emergency rooms; and incentives for personal responsibility, including rewards for healthy behavior and disenrollment for failing to pay premiums.

More ambitious reforms can liberate poor Americans from the inferior, low-value health system to which they are shunted. Current federal dollars should establish and seed-fund new Medicaid health-savings accounts, empowering beneficiaries to seek value and create incentives to live healthy lifestyles. Medicaid reform also ties federal funding to states’ enrolling more citizens in private insurance.

By changing Medicaid into a bridge to private insurance, Medicaid agencies would help beneficiaries shop for private plans. Doctors and hospitals would receive payments from the same insurance that non-Medicaid patients receive. Second-class health care for the poor would be eliminated, and costs would come down. This should be the goals of any administration’s Medicaid reform.

If you have any concerns, questions, comments or issues that I or my Aide, Jenna, can help you with, please contact us at (434) 821-5929 or email at [email protected]. You can also keep up with me on my Facebook page at


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