Everyone agrees that entitlement reform needs to be on the nation's political agenda. Few people can agree, however, on what needs to be done.
The facts are plain. The economic burden imposed on the federal budget by Social Security, Medicare and Medicaid is, at some point, going to become unsustainable under the current system. Without real reform, the only alternatives left will be benefit cuts, tax increases or some combination of the two.
It doesn't have to be that way—but to make real reforms now, while there is still time, requires the political class to confront this important issue head on, as the Republican Governors Public Policy Committee Health Care Task Force did Tuesday with its release of "A New Medicaid: A Flexible, Innovative and Accountable Future."
The report is "the culmination of the combined efforts of policymakers and health care administrators in the nation's Republican-led states," those who write it said, that is intended to serve "as the basis for dialogue during the upcoming RGPPC-sponsored Health Care Summit." [Check out our editorial cartoons on healthcare.]
The input from the nation's governors is an important part of addressing the coming entitlement implosion—just as their input was critical to the success of welfare reform back in the 1990s.
"One of the major mistakes of Obamacare is that it ignored input from the states," said RGA Policy Chairman Haley Barbour. "This report encompasses four months of substantive dialogue among the states about how to best reform Medicaid. It is a well thought out document that should be taken seriously by anyone in Congress or the White House who is interested in saving Medicaid."
Keying off the expansion of Medicaid that is anticipated as part of Obamacare (formally known as The Patient Protection and Affordable Care Act) which is "the largest expansion of the program in history" the governors said they were "deeply concerned the existing challenges Medicaid faces today will be exacerbated by the program's unprecedented growth over the next few years." [See photos of healthcare reform protests.]
Just looking at the numbers, "Annual state Medicaid rolls have swelled to more than 69.5 million enrollees, or more than one in five Americans, in 2011. Medicaid enrollment now exceeds Medicare enrollment by more than 8.1 million people on an average monthly basis," and, after Obamacare's mandated eligibility expansion goes into effect in 2014, says the report, the non-partisan Congressional Budget Office projects that "an additional 25.6 million people will enroll in Medicaid in the next decade, increasing state administrative costs by $12 billion. Overall, PPACA's new eligibility groups are expected to cost the states a total of more than $118 billion through 2023."
The 31 specific recommendations contained in the report flow from a set of seven principles for reform the RGA outlined in a June 2011 letter to congressional leaders:
"Medicaid consumes an ever-increasing and frightening share of state budgets and the current pace of spending is unsustainable," said RGA Chairman Bob McDonnell. "Regardless of whether or not Obamacare is repealed or struck down, Medicaid is in dire need of reform. This report offers realistic ideas about how to fix Medicaid from the states' perspective." [Read: Orrin Hatch's Top 10 Reasons to Repeal Obamacare]
The challenge moving forward, the governors said in the report, is to find a way to think about a new way to manage Medicaid, "one that more easily adjusts to the needs, ideas and culture of each state."