If conservatives could re-design Medicaid from scratch, what would they do? That's the most question I've asked myself in attempting to craft legislation to transform Missouri's Medicaid program into the most market-based Medicaid system in the history of the federal program. My end goal is to give Missouri a system that uses market-forces to improve health results for participants and reduce costs for taxpayers.
One reason health care costs spiral upward is because health care consumers have been insulated from paying the actual costs of services. This is most especially true in Medicaid, where recipients have never been provided incentives to consider the cost or choice in quality. That's why Medicaid transformation must start by turning Medicaid recipients into active health care consumers empowered to choose their own health insurance plans - and to introduce cost-consciousness into their decisions for the first time in the history of the Medicaid program. The first place to start would be to eliminate the blank-check, single-payer, fee-for-service Medicaid system that continues to exist in many parts of Missouri. We should replace it with a managed care system where insurance companies and provider groups would have the opportunity to bid for Medicaid contracts, but would be required to compete on the basis of price for the first time.
We must also incentivize Medicaid participants to choose the most affordable health insurance plans. Just as the average Missourian takes cost into account, Medicaid participants should be encouraged to choose low cost plans by allowing them to share in savings they generate for Missouri taxpayers. To improve outcomes, we should provide bonus payments to managed care Medicaid companies which achieve measurable improvements in recognized health measures for participants who choose their plans.
Next, we should provide Medicaid participants with health savings accounts to use for co-pays. Just as the average Missourian must decide whether their ailment can wait for urgent care or a primary care appointment, so too should Medicaid participants have incentive not to misuse the ER. We should require hospitals to charge steep co-pays for misuse of emergency room services by Medicaid participants, and we should encourage inexpensive health care by prohibiting or limiting co-pays for primary and preventive care appointments.
In addition, my plan would increase eligibility for Medicaid for some Missourians and decrease it for others. Where we reduce eligibility, those Medicaid recipients would now be eligible for private health insurance plans which are highly-subsidized by the federal government - and, importantly, do not cost any general revenue funds of the state of Missouri.
Similar plans have been proposed (and, in the case of Indiana, adopted) by conservatives like Rep. Paul Ryan, former Missouri Gov. Matt Blunt, Texas Gov. Rick Perry, and former Indiana Gov. Mitch Daniels. Nevertheless, critics of my plan exist on both the left and the right. From the left, there is criticism of reductions in eligibility and the move away from the single-payer fee-for-service system. From the right, there are genuine and valid concerns about long-term costs of increases in eligibility.
On Nov. 5, I presented an estimate of cost savings for these ideas. If these reforms and eligibility changes were implemented, the state could save nearly $800 million in general revenue funds over the next eight years. I provided a report with a thorough analysis of the factual basis for this estimate and have invited other members of the legislature and public to review the estimate with a skeptical eye and offer critiques - with one caveat. This being the Show-Me State, I don't believe it sufficient for one to merely say they do not agree with the estimate. Instead, those who disagree have the responsibility to show their math and I'm looking forward to seeing alternative scoring proposals. In the end, the goal must be to transform Missouri Medicaid in a way that saves taxpayers money and improves health outcomes for participants.