Let’s assume the House Budget plan to repeal the Affordable Care Act (ACA) and transition Medicaid to a state block grant program passes. How would Arizona tackle it?
According to a recent report by the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute, the plan would reduce federal Medicaid spending by $1.4 trillion over the 2012-2021 period. For Arizona, this would translate into a reduction of $34.4 billion, or 35 percent. The reduction due just to the Medicaid block grant alone would be $18.6 billion, or 22 percent.
It seems inevitable that Arizona would experience significant reductions in Medicaid enrollment, even if the state were to introduce system efficiencies that reduced the rate of growth in spending. There are only so many ways to tackle the problem: (1) reduce enrollment, (2) reduce benefits, (3) reduce provider payments, (4) lower costs through system efficiencies and integration, (5) raise revenue to increase state funding, or some combination of these.
The problem with the House budget plan is that it reduces federal spending by passing the buck to the states, which are left with the same problem of providing medical care for people who can’t afford to pay for it with their own resources. While all this plays out politically, we would do well to look beyond implementation of the ACA for ideas of what real health care reform would look like. For example, how about an approach that combines single payer with vouchers for most of the cost of purchasing private insurance? A recent commentary on the Dutch model sketches the case.