Name

Institution

Date

Medicaid

Medicaid Current Federal policy

Medicaid was created by President Lyndon B. Johnson in 1965 to cater for the health needs of Americans who were not able to work. The program gives states the freedom to choose whether to participate or not. Nonetheless, all states participate. The Center for Medicare and Medicaid services have outlined parameters that states must meet in to receive federal funding. The Center also controls eligibility and the health care services covered.

President Barack Obama introduced a health care law that standardized Medicaid requirements, particularly so that many Americans making up to 133 percent of the poverty line could qualify. The law did not, however, make it because a Supreme Court intervention overturned it. States now had the option to expand Medicaid at will. 25 states succeeded in doing so, some did not (Alley et al, 2015). Since Trump became President, the eligibility of Medicaid became more diverse allowing states to include work requirements as a necessity for low-income and needy Americas covered under Medicaid.

Without including Federal matching funds, Medicaid uses up 20 percent of state spending. Every year lawmakers consider ways to improve the program in terms of cost-effectiveness, efficiency, and outcomes. The Affordable care Act allows states to expand Medicaid at will. The recent ruling by the federal district court that the ACA is unconstitutional, state lawmakers have an oncoming task.

How the policy has evolved over the years.

Since its signing in 1965, Medicaid has become a medical safety net for millions of Americans who may not be able to access health care coverage from any other source. Over the years, a long list of laws has adjusted the program adding services for various groups that were not initially included. The changes have also expanded the list of individuals eligible for Medicaid and added more care options catering to the poorest of the poor.

The program began as something known as the Elder-care program that later morphed to form Medicaid after small attention of legislative attention of three federal proposals, and serving primarily to satisfy the continued demand for more federal support for state healthcare programs. Because there was no careful attention to certainty and poor planning (Sommers, Arntson, Kenney, & Epstein, 2013). Unlike Medicare, Medicaid is a program jointly run by federal and state governments. Each state administers its own program following guidelines created by the federal government. The federal and state governments are responsible for funding responsibilities using a system that relies on the level of poverty in the state. Wealthier states receive 50 percent of the federal share and the poorest receive 74.7 percent of federal subsidies.

The lingering problems of Medicaid

As Medicaid uses a huge part of state budgets, policymakers are looking for ways to reduce the costs and to ensure that the program generates effective outcomes. The policy changes also look to ensure state programs are managed effectively. Over its half-century history, Medicaid has been a source for essential and evolving issues for the state as well as federal policymakers. Approximately one in five Americans receive Medicaid by 2017, which makes it the largest source for low-income families including women, children, seniors as well as people with disabilities.

Medicaid is, in principle, a program of public assistance but its design makes it extremely difficult to introduce cost-saving incentives that make recipients behave like consumers. Federal laws and policies limit to what extent cost-sharing states can impose on the people covered under the program (Polite, Griggs, Moy, & Lathan, 2014). While some states have succeeded in conducting financial incentive experiments that show promise like cash accounts managed by beneficiaries, any room that the state can maneuver is limited by federal policy. There has also been the issue of fraudulent enrollments and claims. This kind of abuse has been made more serious by the fact that the program caters to a class of beneficiaries that have little to no interest in cooperating with the efforts introduced to streamline medical vare and cut down long-term expenses.

In summary, the inherent flaws of Meducauid guarantees that the programs exploding costs will endanger the nation’s financial health. Just like social security and Medicare, this program represents an implicit promise of costly benefits, the cost that will grow beyond future revenues. Unlike Medicare and Social Security in terms of costs, the expenses of Medicaid in the future will not just appear on the books of the federal treasury under heavy debt. Medicaid is also the largest financial obligation of state governments, which most of the time are not allowed to issue debt on operating expenses. With the program already taking up a fifth of state operating budgets, its growth will mean that state taxes will go higher, and the budget for basic states services such as public safety and education or both will be reduced.

The case of California illustrates this concern. California is one of the hardest-hit states with a $20 billion budget deficit since 2013. Despite this, the state was facing a 25 percent increase in its Medicaid obligation by 2014, which meant the taxpayers would have to add an additional $2 to 3$ billion on the budget every year. The sustenance of current programs has become such a huge problem and it appears that states no longer have the capacity to move forward in the current environment.

It is crucial to note that Medicaid is not a health-care program but one of the biggest components of the nation’s welfare state outweighing cash assistance, housing aid, and food stamps in terms of dollar value. Like these three programs, Medicaid in a number of times provides implicit discouragement to work, since one loses eligibility for such an important benefit following an increase in income. Unless policymakers introduce reforms to end the general cycle of dependency-they can apply fixes that have proved useful in other areas of welfare, such as time limits and work requirements. However, Trump’s imposed the requirements that work should be part of the requirement for eligibility was overruled by the court which means the string incentive against moving up the economic ladder still exists. Refusing work, or accepting jobs that are without long term commitments or are off the books is the current rational choice for families facing the high actual tax rates created by the eligibility requirements for Medicaid. Obamacare is believed to have heightened this problem.

How Congress should deal with the issues

Meaningful reform of the system will require the reduction of its size, scope, and cost to taxpayers. The idea should be to increase self-reliance among the middle class and to remove disincentives that hinder low-class Americans from moving to the next economic level. The power should not be concentrated on the federal government but should be returned to states, local institutions, families, and charities. The may goals should be to ensure that the most in need of public resources actually help the most in need of such kind of assistance. Congress should divide the work into four key elements.

Medicaid should be converted into a more specialized program assisting those with chronic mental or physical problems who are, for all practice commitments, areas of the states. This was after all the original idea that led to the establishment of Medicaid half a century ago. It is important to categorize individuals who are most likely to depend on the state for a prolonged period due to chronic conditions and healthy people who have lost their job and other short-term emergencies, who find themselves without health coverage or any savings. The program should be focused on the former and not the latter, efforts to cater for the needs of those people who are able to work and contribute to society should take a different form and should be designed to create just the safety net required for when required. Congress should revise eligibility standards accordingly, adding an isolated program to make private health insurance premiums more affordable for contributing members of the society.

States should be awarded more latitude to try out more initiatives to coordinate care to be able to effectively manage the remaining Medicaid caseload that will last for a long time. States should be allowed to experiment with both the practice of medicine and the practice between the program and other state entities. What this means is that state agencies should coordinate to avoid creating huge costs for one another-for instance, when a patient eligible for Medicaid suffering from severe mental illness goes of medication, cause a public disturbance or commits a crime, they are arrested and taken to jail before being transported to a psychiatric hospital. Tracking this movement can help reduce these destructive cycles.

Congress revising the Medicaid policies to allow states to experiment with various initiatives allows states to avoid things such as the myth of prevention savings. The myth of prevention savings is the idea that front end expenses lead to back end savings. For instance, preventive medicine is often beneficial in the prevention of chronic conditions such as diabetes or heart disease. However, decades of data have shown that preventive medicine is quite expensive and such an approach does not save money (Baicker et al, 2013). Most people that take these preventive measures would not develop the conditions that they took preventive medication for even if they did not. As a result, the cost of Medicaid does not match the financial benefits. Preventive care should not be considered a savings but an expense.

References

Alley, D. E., Asomugha, C. N., Conway, P. H., & Sanghavi, D. M. (2016). Accountable health communities—addressing social needs through Medicare and Medicaid. N Engl J Med, 374(1), 8-11.

Baicker, K., Taubman, S. L., Allen, H. L., Bernstein, M., Gruber, J. H., Newhouse, J. P., … & Finkelstein, A. N. (2013). The Oregon experiment—effects of Medicaid on clinical outcomes. New England Journal of Medicine, 368(18), 1713-1722.

Polite, B. N., Griggs, J. J., Moy, B., & Lathan, C. (2014). American Society of Clinical Oncology policy statement on Medicaid reform. Journal of Clinical Oncology, 32(36), 4162.

Sommers, B. D., Arntson, E., Kenney, G. M., & Epstein, A. M. (2013). Lessons from early Medicaid expansions under health reform: interviews with Medicaid officials. Medicare & Medicaid research review, 3(4).