NCPA - National Center for Policy Analysis


February 16, 2010

The uninsured can be covered at relatively modest additional net cost, without a government takeover of health care, rationing, new health care bureaucracies, or any of the other central components of Obamacare, says Peter Ferrara, Director of Entitlement and Budget Policy for the Institute for Policy Innovation, and a Senior Policy Advisor on Health Care to the Heartland Institute. 

Reform should start with Medicaid, which already spends over $400 billion a year providing substandard coverage for 50 million poor Americans.  Congress should transform Medicaid to provide assistance to purchase private health insurance for all who otherwise could not afford coverage, ideally with health insurance vouchers, says Ferrara. 

This one step would enormously benefit the poor already on Medicaid, he says: 

  • The program today pays doctors and hospitals only 60 percent of costs for their health care services for the poor.
  • As a result, 40 percent of doctors and hospitals won't take Medicaid patients.
  • This is already a form of rationing, as Medicaid patients find obtaining health care increasingly difficult, and studies show they suffer worse health outcomes as a result.
  • Health insurance vouchers would free the poor from this Medicaid ghetto, enabling them to obtain the same health care as the middle class, because they would be able to buy the same health insurance in the market. 

How would this be accomplished? 

  • Ideally this would be done by changing Medicaid financing to provide the federal assistance to the states for the program through finite block grants, which would not vary to match increased state Medicaid spending as it does today.
  • States that innovate to reduce costs can then keep the savings; states that operate programs with continued runaway costs would pay those additional costs themselves.
  • Such reforms worked spectacularly well in halting the runaway costs of the old AFDC program when Congress adopted welfare reform in 1996. 

Done right, this would ensure that no one would lack health insurance because they couldn't afford it, says Ferrar. 

Source: Peter Ferrara, "A Real Solution for Covering the Uninsured," FOXNews, February 15, 2010. 

For text:  


Browse more articles on Health Issues