Any plan should serve taxpayers and the poor

A challenge for taxpayer-backed health-care programs is making the programs work for the constituencies the programs must serve: the poor and taxpayers.

The Health Policy Consensus Group recently set out a series of components that would make it easier for states such as Kentucky and West Virginia to administer programs. These two states hold large pools of Medicaid and State Children's Health Insurance Program (SCHIP)-dependent poor citizens, so perhaps they should become the unlikely leaders in pushing for federal reforms.

The group advocates greater flexibility in spending Medicaid and SCHIP money. It writes:

First, state's should be encouraged to gear subsidies to a beneficiary's income and possible health risk. They also should be able to establish other features, such as cost sharing, to prepare families to transition to private coverage.

Second, people should have a range of coverage options that qualify for the subsidies and not be forced to buy a policy with a government-dictated list of benefits and coverage mandates.

Third, people eligible for the subsidies should have easy access to information about the private and public health insurance coverage options that are available to them. Armed with consumer-friendly information and the financial resources needed to purchase coverage, individuals can select the insurance that best meets their needs.

Kentucky already has attempted to tackle exactly these policy prescriptions without federal assistance.

When the federal Department for Health and Human Services approved Kentucky's planned Medicaid reforms last year, the agency stated: Kentucky will also help Medicaid enrollees purchase health care coverage through their employers. If an enrollee chooses employer coverage instead of regular Medicaid, the state will help them pay the cost, but the individual will be subject to the benefit package, cost sharing and co-payment provisions of that particular employer program.

Through these kinds of reforms, Kentucky can show other states how to manage Medicaid costs and shift recipients to private insurance. The experiment is a worthy one.

Sources:

HHS Approves Historic Medicaid Reform Plans in Kentucky, Department of Health and Human Services, May 3, 2006.

State Health Issues, Galen Institute, May 22, 2007.