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Politics : A US National Health Care System? -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (973)	8/31/2005 12:17:59 AM
From: Peter Dierks	Respond to of 42652

Medicaid reform could show the way on Social Security. BY BRENDAN MINITER Tuesday, August 30, 2005 12:01 a.m. EDT One reason the public has resisted President Bush's idea of private Social Security accounts is that voters demand a little work in the laboratories of democracy before signing on to any big idea. There has been scant experimentation with large-scale private entitlement accounts in any of the 50 states. Social Security is a purely federal program, but several states are looking at a different form of a private entitlement account--for Medicaid. The federal government started Medicaid in the 1960s as part of the Great Society to provide a "safety net" for poor people who couldn't afford health care. Its costs are split between Washington and the states, and each state administers its own program subject to federal regulations. Medicaid wasn't intended to grow into a behemoth, but today it consumes a fifth to a third of many state budgets. So far nothing--not "managed care," not "preventive care"--has been able to check its growth. Now some state lawmakers are turning to the ownership society. South Carolina's Gov. Mark Sanford, a Republican halfway through his first term, is furthest along. About one million people in his state, or one in four South Carolinans, receive Medicaid benefits each year, at a cost of $4 billion in combined federal and state dollars. Medicaid consumes about 19% of South Carolina's budget. Within a decade the state will see 29% of its budget disappear into Medicaid. That trajectory is clearly unsustainable, so last year Mr. Sanford rolled out a preliminary plan to create private Medicaid accounts that individuals would use to buy health insurance. The details are still being worked out, and the size of each account will vary widely depending on individual circumstances. But the idea is simple: Give most adults about what Medicaid spends on them now, approximately $4,000 a year, and let them shop around. If they find insurance for less than what's in their account, they can spend the remainder on other health care needs. The advantages would be twofold. The state would be able to draw a line around the portion of the budget Medicaid gobbles up, reserving other pieces of the pie for education and other priorities. It would also enlist the help of those best able to judge what care they really need, the patients themselves, in the effort to control costs. And, of course, there will be safeguards. The state will require the health insurance bought under the program to provide at least the level of care Medicaid offers now, and the federal government as well as the state Legislature will have to weigh in before any reforms can move forward. States can learn from one another's failures as well as successes. For many states, Tennessee is an example not to emulate. There, state officials are wrestling with a Medicaid monster gobbling up a third of the state's budget. Though there is little doubt this is what's in store for most other states unless they act soon, the Volunteer State got to this point faster than most by rolling out a version of HillaryCare called TennCare in the 1990s that gave expanded benefits to hundreds of thousands of people. This year Gov. Phil Bredesen, a Democrat who inherited the program, was forced to cry uncle and is now in the process of dismantling part of TennCare. He hasn't come out for private accounts, but he's a believer in some market-based reforms that hold costs down by giving those in the program the opportunity to make rational choices about their health-care needs. He's also willing to buck his party in calling for Medicaid reforms. He told me that the system is a failed dream from the 1960s that needs to be modernized. After recently expanding Medicaid, Maine is about where Tennessee was in the late 1990s, watching a new entitlement gobble up a surprising portion of the state budget. But as states incubate ownership society ideas, we can expect to see them grow and eventually make a return to Washington. Mr. Miniter is assistant editor of OpinionJournal.com. His column appears Tuesdays. opinionjournal.com