Medicaid Blend Rate Misses the Point

Nina Owcharenko /

Conservatives should beware of policies that simply meet a budget target number without considering whether the underlying policy changes move a program in the right direction. Case in point: the Medicaid blend rate, which would replace the various federal matching rates for different categories of enrollees with one unified federal rate.

Yes, those on the left are attacking the blend rate proposal that would set one federal match rate in Medicaid and the Children’s Health Insurance Program (CHIP). That could lead conservatives to think it must be a good idea. But this misses the point. Conservatives need to judge these proposals based on whether they advance conservative principles for fundamental Medicaid reform. This proposal has several problems:

When it comes to Medicaid, the left typically argue or concede many of the problems in the program. The difference is that their solution is more money. Conservatives need to have their own solution, and it is not more of the same.

Now is the time for Congress to quit kicking the can down the road. Medicaid needs to be and should be reformed. In its fiscal plan, The Heritage Foundation outlines its plan for reforming Medicaid, starting with fully repealing Obamacare (and its unbearable Medicaid expansion). From there, it puts Medicaid on a budget with all other anti-poverty programs, mainstreams healthy moms and kids into private coverage, and (with the continued help of the federal government) gives states the tools and flexibility needed to provide quality care at lower costs to the most vulnerable in society. Any proposal should make significant progress toward this outcome.

The last time Medicaid was a serious part of a budget discussion, conservatives introduced important policy changes such as cost sharing based on income, limiting loop holes for eligibility, and loosening the benefit package restrictions, including for private coverage. At the very least, this round of budget talks related to the debt ceiling should focus on expanding those policy ideas that would save money for both state and federal taxpayers. As we highlighted last week, more bad health policy is the last thing lawmakers should consider as a solution to the federal government’s spending problem.