Nebraska Is Reforming Medicaid the Right Way

A study from the Nebraska-based Platte Institute examines the state’s approach to Medicaid reform, and explains how that approach is preferable to simple expansion of the government program under Obamacare.

From the report:

As an alternative to Medicaid Expansion, Nebraska lawmakers instead should look to reform the underlying Medicaid system in a way that works for patients and taxpayers alike. A number of key reforms to Nebraska’s Medicaid program are finally underway, but policymakers can still do more. Lawmakers should focus their efforts on making upgrades that have proven successful in other states, and lay the foundation for even more innovative solutions in the coming years.

Federal and state taxpayers alike would be best served by a Medicaid block grant combined with a global waiver of burdensome federal rules. Under this arrangement, Nebraska would receive a fixed amount of funding in exchange for meeting broad policy objectives. The state would have complete flexibility on how to achieve those objectives, able to pursue innovative approaches that im­prove quality, control costs and fit the unique needs and values of Nebraska patients and taxpayer. …

Nebraska’s Medicaid reforms are built on a foundation of smarter funding. The Medicaid program contracts with private plans to provide and coordinate care for patients. These plans receive a fixed amount of funding per patient, rather than the open-ended funding of the old fee-for-service system. This provides health plans with a financial incentive to improve health and more effectively manage patients’ conditions. These health plans will bear the risk if they coordinate care or manage health conditions poorly, but will also reap the rewards if they do so effectively. …

By implementing more comprehensive Medicaid reforms, Nebraska could produce significant savings and improve the quality of care for those who rely on the program. These savings can ease pressure on other core state priori­ties, which have seen their funding crowded out by Med­icaid in recent years, as well as provide an opportunity for tax relief.

Policymakers could dedicate a portion of these savings to­wards reducing the state’s current waiting lists for individu­als with intellectual and developmental disabilities through innovative, employment-related pilot programs. The state may also be able to set aside a portion of savings to offer supplemental payments to hospitals, clinics and others pro­viding charity care through safety net funding pools.

The state has made great strides in improving its Medicaid program in the past few years. But the work is not done. Lawmakers should continue this important work, not fall victim to the short-term allure of “free” federal money to create a new entitlement for able-bodied adults.

Read the full study from the Platte Institute here.