Backgrounder: Let States Work out Healthcare

August 7, 2017

“At least six states with GOP governors — Arkansas, Kentucky, Arizona, Maine, Wisconsin and Indiana — have drafted plans meant to introduce new rules people would have to meet to be eligible for Medicaid.” — The Hill, Aug. 3, 2017

by Josh Claybourn

As GOP attempts at federal healthcare reform continued to flounder, John Boehner added his prophecy about the chances of his former Republican colleagues successfully passing some sort of repeal and replacement of the Affordable Care Act.

“Now, they’re never — they’re not going to repeal and replace Obamacare . . . in the 25 years that I served in the United States Congress, Republicans never, ever one time agreed on what a healthcare proposal should look like. Not once,” he said.

Plenty of evidence backs Boehner up. Other than vague, occasional references to the free market, Republicans lack a comprehensive ideological approach to healthcare policy. That’s a sad reality for an industry representing one-sixth of the national economy. It’s time for Congress to embrace a new prescription for our national healthcare headache: unleash the states.

Indiana Gov. Eric Holcomb wants more flexibility at the state level and “greater control of federal health care dollars being spent in Indiana.” Holcomb often defends Healthy Indiana Plan 2.0 and avoids offering too many specifics, but many believe he favors more free-market reforms like reconnecting healthcare buyers with sellers and reducing perverse incentives.

Meanwhile, California wants a single-payer system that would dramatically expand government’s presence in medical care. Under a proposal introduced earlier this year by California state Sen. Richard Lara, that state’s new system would “cover all medical expenses for every resident regardless of income or immigration status, including inpatient, outpatient, emergency services, dental vision, mental health and nursing home care.” The state would have no copays, deductibles or preauthorization for procedures. Private insurance companies would be prohibited from competing with the government.

Republicans worry that California’s system stifles innovation and drives up costs, while Democrats worry that a market-based approach hurts the medically vulnerable in favor of corporate profits. Both Indiana and California see their approach as fiscally responsible. Why not let both states have their way and see which works better? All 50 states can serve as laboratories trying policy experiments without risk to the rest of the country.

Thus far, Republican proposals for healthcare tout greater state-level flexibility but that “flexibility” only exists within a rigid structure and set of rules established by Washington.

This week, some Senate Republicans proposed giving states block grants for health programs and allowing states significant control on whether to keep, modify or discard key Obamacare insurance regulations. Under this Graham-Cassidy amendment, each state would receive a set level of federal assistance based on the size of its eligible population, cost of care and other factors.

If a state’s eligible population grew, the amount it received would likewise increase. Congress would give states guidelines to ensure adequate coverage, such as  requirements covering preexisting conditions, but states would be free to craft their own system to best address the needs of patients in their states.

This is certainly a step in the right direction, but it still involves funneling billions of tax dollars through the Washington bureaucracy. Why not let states make all decisions about healthcare entitlements within their boundaries?

Imposing a one-size-fits-all solution will continue presenting problems to whichever party holds the majority on Capitol Hill. Congress should simply listen to the people and let them have the healthcare they want. Thirty-eight million Californians want one thing. Six and a half million Hoosiers want something else. Let the people of each state decide their own destinies.

Joshua Claybourn is an attorney in Evansville and an adjunct scholar with the Indiana Policy Review Foundation.


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