Gov. Wolf Should Unleash Pennsylvanians' Ingenuity to Improve Medicaid

A new federal program designed to improve the quality AND reduce the cost of Pennsylvania’s costliest budget item has been soundly rejected by the Wolf administration. The governor’s decision is counter-productive to improving Pennsylvania’s economy and helping more Pennsylvanians achieve independence.

My recent letter to the Wall Street Journal explains our disappointment at passing over such a significant opportunity to combat poverty:

“Regarding your editorial “Trump’s Medicaid Benefit” (Feb. 4): Gov. Tom Wolf of Pennsylvania is a perfect example of those you describe who care more about growing government than helping Americans gain independence.

In Pennsylvania nearly half a million healthy adults without dependents are on Medicaid but aren’t working, studying or even volunteering. Gov. Wolf isn’t interested in encouraging them to find work because declining Medicaid enrollment would mean less federal money for Pennsylvania’s Department of Human Services bureaucracy. After all, the federal government pays 90 percent of the bill for these healthy adults.

Meanwhile, Medicaid consumes a quarter of state spending. President Trump’s block-grant plan, which Gov. Wolf opposes, would allow Pennsylvania to spend less and do more for the most vulnerable. But this isn’t the first time Gov. Wolf has passed up an opportunity to break the cycle of poverty in my home state. In 2017 and 2018, he vetoed bills establishing work requirements for these same healthy, adult Medicaid beneficiaries.

President Trump’s Medicaid plan, along with enacting work requirements, would help 700,000 adults achieve independence, allow the state to negotiate better prescription plans, and reduce the 12,000-person waiting list for intellectual disability services.”

To be clear, this federal program is far from perfect, since it only applies to healthy adults enrolled under Medicaid expansion and does not end the terrible state/federal matching system. States are currently incentivized to use more federal Medicaid dollars to manage the program, and they get little reward for reducing fraud or waste.

But it’s a start—and an opportunity to show state flexibility can improve the quality of care in the heavily-regulated health sector.

Block-grant reforms have a track record of success. The 1990’s reform of TANF as a block grant proved tremendously helpful in boosting employment for single moms and shrinking the gap of childhood poverty. In 2009, Rhode Island received approval for a global waiver that capped spending in return for flexibility, which benefited Medicaid enrollees. Rhode Island’s Medicaid program reduced ER visits, increased doctor visits, and helped more elderly stay in their homes.

Medicaid spending in Pennsylvania, according to the Governor’s proposed budget, will grow by 10 percent this year, while revenues will only grow 3 percent. That means more and more of our limited resources will go to Medicaid alone.

It’s time for Pennsylvania to pursue proven ways of improving the quality of health care services, while reducing the burden on taxpayers. We shouldn’t underestimate the ingenuity and passion of Pennsylvania to find a better way to manage Medicaid.