NCPA - National Center for Policy Analysis


October 26, 2009

Texas' Medicaid program is one of the largest and costliest in the nation; and yet, if government-centered health care reform legislation is passed by Congress, the program and its problems could get even bigger, says the Texas Public Policy Foundation.

Under Senate Finance Committee Chairman Max Baucus' still-developing plan, the "America's Healthy Future Act of 2009," the Texas Health and Human Services Commission estimates that:

  • The program's costs will rise by more than $20 billion over the next decade.
  • The number of people enrolled in the program will grow by more than 2.5 million.

Dumping these state and federal resources into the Medicaid program is not the right answer.  Already the system consumes an enormous amount of public resources.  Adding to it would only worsen the burden on states, enlarge the pool of health care recipients dependent on government aid, and worsen a growing problem of fraud, says the Foundation.

Expanding the Medicaid programs of Texas or any other state is not the right way to achieve meaningful health care reform.  Rather, improving the nation's ailing health care system requires a completely different approach -- one that improves the doctor-patient relationship and minimizes bureaucratic interference.

To explain how to achieve meaningful results, the Foundation commissioned economist Dr. Arthur Laffer to produce the research report, "The Prognosis for National Health Insurance."  Here are the recommendations:

  • Begin with individual ownership of insurance policies: The tax deduction that allows employers to own your insurance should instead be given to the individual.
  • Leverage health savings accounts: HSAs empower individuals to monitor their health care costs and create incentives for individuals to use only necessary services.
  • Allow the interstate purchasing of insurance: Policies in some states are more affordable because they include fewer bells and whistles; consumers should be empowered to decide which benefits they need and what prices they are willing to pay.
  • Reduce the number of mandated benefits that insurers are required to cover: Empowering consumers to choose which benefits they need is effective only if insurers are able to fill these needs.

Source: Talmadge Heflin et al., "State Impact: Expanding Medicaid and What it Could Mean for Texas," Texas Public Policy Foundation, September 2009.

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