Representative Todd Rokita and other members of the Republican Study Committee will introduce the State Health Flexibility Act today. This bill will combine federal funding to the states for Medicaid and CHIP (the Children’s Health Insurance Program) into a single block grant that allows states to design their programs according to the needs and priorities of their own citizens.
The lead sponsors of the bill – Representatives Rokita, Tim Huelskamp, Paul Broun, M.D., and RSC Chairman Jim Jordan – offered the following statement:
“The status quo in Medicaid is unfair to the poor and to our children. Waste and fraud run rampant. The poor are promised care but often struggle to find a doctor. And our children will be taxed to pay off the debt incurred for programs that do not work like they should. ObamaCare makes all of these problems even worse. The State Health Flexibility Act frees the states from Washington’s one-size-fits-all dictates so they can design programs around the needs of their own citizens, yet it does not cut a single penny from current funding. We must take this opportunity to make Medicaid more affordable, more accountable, and provide better care to the people who need it most.”
A full summary of the State Health Flexibility Act and responses to Frequently Asked Questions are available here.
Quick Facts on the Status Quo in Medicaid
Fraud and waste run rampant, yet many people on Medicaid struggle to find a doctor. Even if they can, the quality of care is often substandard.
States have to design their programs to satisfy a one-size-fits-all welfare bureaucracy in Washington. It can take months or years to get permission to enact their own reforms.
Medicaid costs are growing even faster than Medicare. States now spend more on Medicaid than anything else, including K-12 education programs.
ObamaCare forces states to spend up to $118 billion more of their own money and offer Medicaid to an additional 17-25 million people.
States have little incentive to rein in costs because the federal government matches 50-74% of every dollar they spend.
Overview of the State Health Flexibility Act
This bill meets the seven principles for Medicaid reform adopted by 29 Republican governors in June 2011.
Because the states understand better than the federal government the needs of their citizens, states will have sole authority to determine eligibility, benefits, provider reimbursement rates, and to improve the quality of care and access to vital services.
Based on the model set by the successful welfare reforms of 1996, federal funding for Medicaid & CHIP will be set at current levels for the next ten years. This change will encourage state innovation and reform while saving $1.8 trillion compared to current law under ObamaCare (see chart).
The states will be free to set their own funding at whatever level they choose, and the citizens of each state can hold their officials accountable for irresponsible decisions.
Congress will retain the ability to temporarily or permanently adjust federal funding levels to account for changing needs. Spending will simply no longer increase on auto-pilot.
As state reforms reduce dependence on government assistance, those affected are more likely to enter the workforce, get insurance, and be able to lift themselves up the economic ladder.
Annual, independent audits of states’ use of federal funds will be provided to the U.S. Treasury Secretary, the state legislatures, and the general public. Misused funds detected by an audit will result in forfeiture of the funds with a 10% penalty to encourage proactive efforts to root out waste, fraud, and abuse.
Current-law prohibitions will continue against abortion funding, health care services for illegal aliens, and discrimination based upon disability, sex, race, color, or national origin.