The Texas Public Policy Foundation’s Arlene Wohlgemuth writes about Medicaid Freedom in Texas:
Because of federal restrictions contained in both the stimulus and Obamacare, states have few options for adjusting Medicaid benefits and eligibility levels. This leaves reducing provider payments as their primary means of containing costs. As a result, Medicaid pays significantly less than either Medicare or private insurance, which in turn creates the undercompensated care that requires supplemental payments.
Ultimately all the financing mechanisms draw their funds from taxpayers and private insurance consumers. However, Medicaid’s growth is outpacing the economy’s. The mandatory eligibility requirement has increased the caseload, and the mandatory benefits have increased the costs per beneficiary. This system is unsustainable, and Texas can do better.
The state must be given the freedom to redesign Medicaid. Turning control of Medicaid over to the states would allow Texas to build a system that pays all providers adequately.