NCPA - National Center for Policy Analysis


March 3, 2005

America's Medicaid program isn't working. A "money only" debate would be an exercise in futility and -- more tragically -- would trap the most vulnerable people in a hopelessly broken system. Transforming Medicaid is a moral imperative, says Newt Gingrich, a senior fellow at the American Enterprise Institute.

The fundamental problem with Medicaid is that its beneficiaries are distinct and separate groups of individuals with radically different needs and characteristics: people with disabilities, the poor and the elderly poor. A 21st Century Responsible Citizen Medicaid Act would divide Medicaid into three distinct areas, each administered separately with its own rules and structures, explains Gingrich.

  • The act should establish a Capabilities Program to help both Americans with disabilities and those with work-related or other injuries lead the fullest possible lives.
  • The act would address the needs of the relatively healthy poor, who have much different needs than people with disabilities or the elderly.
  • The legislation would create a program to serve the elderly that reintegrates the family back into their care.

Indeed, the Medicaid legislation must also encourage investment and innovation, explains Gingrich. Currently, the Medicaid budgeting system cannot distinguish between costs and investments, making it impossible to introduce new technologies, information systems and quality approaches -- things that have led to a revolution in productivity in most of the private sector.

Source: Newt Gingrich, "Transform It, Don't Reform It: Medicaid Needs a New Structure and the Ability to Tap Technology," Washington Post, March 2, 2005.

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