The Reagan Remedy for Medicaid
So many people have complained that something must be done about U.S. health care. But the truth is that a solution has been staring us in the face for years -- about forty years, in fact. And it all started with Ronald Reagan.
In 1971, California was heading toward bankruptcy because of out-of-control welfare spending, so Governor Reagan tapped Robert B. Carleson to design and implement the first-ever welfare reform -- and it worked. Fraud and waste were reduced so much that the state not only remained solvent, but was able to afford the first welfare benefit increase in over twelve years to the state's most needy.
Like our founding fathers, Reagan and Carleson believed that government closest to the people governs best. The ultimate success of their philosophy was the historic Welfare Reform Act of 1996, which freed millions of Americans from the narcotic of dependency.
The key was repealing the entrenched system of sending federal matching money to the states and replacing it with a system of finite block grants appropriately titled the Temporary Assistance to Families with Dependent Children (TANF). That reversed the destructive incentive for states to steadily increase their welfare rolls and spending and instead encouraged them to focus on those truly in need. The rest is history.
The '96 reform was an unqualified success by every measure. Welfare caseloads dropped by more than two-thirds, from a record 5 million families in 1994 to 1.6 million families in 2009. Most of the former recipients went to work, and earnings rose as child poverty fell. It was a true American success story.
It's now time to apply this proven solution to other welfare programs, beginning with Medicaid.
The surprising Supreme Court decision to uphold the Affordable Care Act (ACA) as a tax means that Congress must repeal it and replace it with policies that cure, rather than exacerbate, deficiencies in our medical care system for the poor. The law of supply and demand, like gravity, is a stubborn thing. Expanding Medicaid, as envisioned in the ACA, would spread already scarce resources more thinly and end up hurting the neediest among us.
Each day, news accounts document the ingrained expansion of bureaucratic overreach. From spending taxpayer money to advertise food stamps to giving away cell phones to encouraging parents to allow their children to be put on psychotropic drugs in order to receive SSI checks, the federal bureaucracy has demonstrated a wild disregard not only for the will, but also for the well-being of the people.
As an alternative to the ACA, H.R. 4160, the State Health Flexibility Act, builds on the best elements of the 1996 Welfare Reform. Block grants will allow the states maximum flexibility to design a safety net to suit the specific needs of their own populations. But the bill goes a step farther to protect the interests of the individual states by requiring that monthly allocations be sent to them directly by the U.S. Treasury Department -- effectively bypassing federal bureaucratic control and its Washington-knows-best interference.
If Reagan were here today, he would heartily support the State Health Flexibility Act because he cherished the genius of our constitutional system of limited government. Reagan believed that it is financially and morally imperative to target limited public resources to those most in need.
Washington has proven that it is not capable of prioritizing or spending responsibly -- particularly in the welfare arena, where the combination of political and bureaucratic pressures to increase dependency has become utterly toxic.
H.R. 4160 would help usher in the devolution of power from Washington to the states envisioned by Reagan and Carleson. Its time has now come.
Susan A. Carleson is founder and president of The Carleson Center for Public Policy (www.theccpp.org), which is named for her husband Robert B. Carleson, Ronald Reagan's welfare adviser and the original architect of the block grant policy manifested in the State Health Flexibility Act.