By Caroline May, The Heartland Institute
A group of Republican lawmakers in Washington, DC introduced a new plan to return more power to the states by combining Medicaid and the Children’s Health Insurance Program into a single block grant.
The State Health Flexibility Act—sponsored by Indiana Republican Rep. Todd Rokita, with Republican Reps. Tim Huelskamp of Kansas, Georgia’s Paul Broun, and Ohio’s Jim Jordan, head of the Republican Study Committee, as lead co-sponsors—would give states the sole authority to design health care subsidy programs that best meet the needs of their citizens.
“The State Health Flexibility Act will fundamentally reform Medicaid and provide a vastly better service for Americans who depend on it, without cutting a single penny from current funding,” Rokita said.
The bill, in addition to repealing President Obama’s health care law, will not make cuts to current Medicaid and CHIP funding. It will instead keep the programs capped at current funding levels for the next decade. The congressmen estimate this will save $1.8 trillion compared to current law.
Shifting Authority to the States
If passed, the ability to determine eligibility, benefits, and reimbursement rates will be solely under the states’ purview. The states will also be able to spend the funds at what levels they desire—including setting aside a portion for a Rainy Day Fund and up to 30 percent to support other welfare programs, such as Temporary Assistance for Needy Families (TANF), Supplemental Security Income (SSI), and food stamps.
According to Huelskamp, putting the states in charge will help to more efficiently meet citizens’ care needs.
“In the same way that no one education policy works for every state, nor does one Medicaid policy fit all,” Huelskamp said. “In converting Medicaid to a block grant program, we will give the states the resources and the flexibility they need in order to serve their own people best. Furthermore, repealing Obamacare—as this legislation does—will allow states to focus on the most needy, rather than be forced to deal with an unprecedented surge in Medicaid enrollees as a result of the law’s mandates to expand Medicaid to those who do not necessarily need it.”
Broun echoed the sentiment and emphasized the importance of empowering the states.
“By taking the federal government out of the equation, the states will be able to provide better and more affordable care to patients that need it the most,” Broun said.
No Automatic Funding Increases
Although funding will be kept at current levels to encourage the states to adapt and refine their programs, Congress will be allowed to offer funding increases based on need. There will be no automatic funding increases, and current prohibitions on funding for abortion, health care services for illegal immigrants, and discrimination based upon disability, sex, race, color, or national origin will remain in place.
In all, the goal of the measure is to cut bureaucratic barriers to innovation, according to Huelskamp.
“When I served in the Kansas State Senate I had the privilege of serving on a Medicaid task force charged with finding ways to improve Kansas’ program,” Huelskamp said. “At nearly every single turn, we found that Kansans could do more if Washington would cut the red tape.
“If granted more flexibility to tailor Medicaid to its own population, Kansas—and other states—would be able to improve the quality of care for Medicaid beneficiaries, make the program more affordable, and, in turn, make it more accountable to hardworking taxpayers,” the congressman added.
The act will also require states to submit annual, independent audits of their federal fund use to the U.S. Treasury Secretary, the state legislatures, and the general public. States with audits that find a misuse or abuse will face a forfeiture of funds with a 10 percent penalty. If passed, the legislation would take effect in FY 2013.
