NCPA - National Center for Policy Analysis

State Solutions Can Improve Medicaid

April 18, 2013

Last year, the Supreme Court struck down the mandatory requirement that states expand Medicaid to all families with incomes up to about $30,000 a year. States now have a choice of whether to expand their Medicaid programs to an estimated 20 million new individuals around the country. While many states have opted not to expand, and the evidence supporting that choice is strong, states also have the choice of implementing innovative, market-driven solutions, says Chris Jacobs, a visiting fellow at the Galen Institute.

  • In Rhode Island, the state uses a global compact waiver, which gives the state flexibility to improve the quality of Medicaid care by promoting home- and community-based services and improving access to primary care. The waiver resulted in an estimated $35 million in savings from shifting nursing home services into the community, $15 million in savings from more accurate rate setting, and between $4.5 million and $11.9 million in savings from better care management for those with disabilities or special needs.
  • In Indiana, the state's Healthy Indiana Plan (HIP) embodies the principles of personal responsibility into a consumer-driven health plan model that requires individuals to make contributions to a Health Savings Account that are not more than 5 percent of their income. The state, which supplements an individual's contributions up to $1,100, has achieved many of its policy goals with HIP including high contribution rates by individuals below 200 percent of the poverty line, 90 percent of participants visiting a physician at least once in the first year and an increase in preventive care.
  • Florida's new Medicaid waiver will allow all Medicaid recipients the choice to enroll in one of 10 different managed care plans with customized benefit packages that meet specific needs. The plan also encourages and rewards healthy behaviors and transfers long-term care patients to in-home and community-based services instead of nursing home facilities.

Texas, North Carolina, New York, West Virginia and Utah have all sought initiatives that create more flexibility for the states, offers alternative benefit packages or introduces more market-driven health care approaches.

By customizing beneficiary services, offering coordinated and preventive care, encouraging personal responsibility, supporting home and community-based services and limiting new federal funds, states can opt of out of Medicaid expansion and still improve the value of the services they offer.

Source: Chris Jacobs, "21st Century Health Care Options for the States," Galen Institute, April 8, 2013.


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