Medicaid federalism

Medicaid expansion is creeping back into the headlines, in what could be seen as its bid to replace transportation as Virginia’s new, perennial problem.

It’s a topic in legislative debates and campaign ads. That’s not surprising. The Governor still backs expansion, though he’s invested precious little political capital to achieve his professed goal. Republicans are against it, some on policy grounds, others as an article of faith (and a lingering fear of the “Dave Brat effect“).

So long as the status quo reigns in Richmond — and there is little indication, even from some Democrats, that the November elections will change it — expansion is unlikely to occur.

Or so the thinking goes. As presidential candidates begin making their way through Virginia, what to do about Medicaid gets a different spin. Lashed as the issue is to Mr. Obama, the default position is to cast Medicaid into the outer darkness with the rest of Obamacare.

But at least one candidate, Ohio Gov. John Kasich, disagrees.

Kasich was in Richmond on Monday, where he was asked to explain why he agreed to Medicaid expansion in his state. Kasich rambled a bit, but eventually said he expanded Medicaid because of “arithmetic,” and later, as a moral issue.

There is a strong and ancient moral argument for aiding the poor. The question is whether the most effective way to do that is through a government program. Medicaid critics would say the program may, indeed, offer coverage. Expanding it would cover even more people. But it is incapable of offering them the care they need. Through that lens, Medicaid, and plans to expand it, are cruel hoaxes.

Kasich stood on somewhat firmer ground when he talked about the numbers. The money was there, he used it to create a program that, in his view, worked for Ohio and helped pay for the costs associated with indigent care. For those who oppose expansion in their states, Kasich asked what their alternative might be. Pretending the problem will go away on its own is no solution.

Even through his ultimate goal, if elected, is loosening federal restrictions (or removing them entirely) and giving states the power to experiment with Medicaid programs, it’s going to be a tough sell to a Republican electorate that sees expansion as a further entrenchment of Obamacare.

The idea of giving states more, or even total, power to define, create and tinker with their own health care programs is not new. Block granting the program to the states raises hackles on the left, as does the idea of Medicaid vouchers, but either of these options is a much better approach than simply saying “no.”

Because “no” will never be a sufficient answer to the problem.

Virginia has experimented, tinkered, and nibbled around the edges of Medicaid reform. It can do more, and the incentive and desire to do so is there — particularly when the alternative is full expansion, followed by political suicide.

But neither Virginia nor any other state will be able to find a solution that works best for its citizens, doctors, hospitals, and insurers until the federal restrictions on innovation are removed. Kasich’s argument for expansion may fit his definition of leadership, but a leader without followers is just a guy out for a walk. He needs to lead with reforming the system entirely — removing the federal restraints on innovation, giving the states the freedom and resources they need to create their own programs, and then see what develops.

In short, he needs to lead with federalism.

Once upon a time, conservatives were all in favor of such a thing. It will require thinking and (the horror) maybe even compromise. It will generate fierce debate over basic ideas of the proper roles of state and federal governments. It would also force people out of their rhetorical “yes” and “no” bunkers.

And it might even work.

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