At Kaiser Health News, Michael Cannon of the Cato Institute writes:
On Tuesday, House Budget Committee Chairman Paul Ryan, R-Wis., [released] a budget blueprint that tackles the three big health care challenges facing the federal budget — ObamaCare, Medicare and Medicaid – with a strategy of repeal, vouchers and block grants. Done properly, those steps would simultaneously improve health care and help balance the budget within a decade. …
… the budget should complete the successful 1996 welfare reforms by eliminating the entitlement to Medicaid benefits, converting federal Medicaid and Children’s Health Insurance Program funding into fixed block grants, and freeing states to find innovative ways to provide care to the truly needy. Repealing ObamaCare‘s Medicaid expansion and capping federal Medicaid and CHIP outlays at nominal 2012 levels would together reduce federal deficits by $1.6 trillion over 10 years.
Block grants need not remove a single patient from the Medicaid or CHIP rolls. States could even expand enrollment. But block grants would require states to pay the full marginal cost of their programs today, rather than have Congress finance most of it through deficit spending. As in 1996, skeptics will predict horrific consequences. But they were wrong then — poverty fell dramatically after welfare reform — and they are wrong now.
If Republicans aim to capture this unique and crucial opportunity, they need to convey that a smaller government isn’t just compatible with better health care. It’s a prerequisite.
