Politics

Obama to States: Don’t Cut Medicaid, Do More With Less

| by Reason Foundation

By Peter Suderman

State budgets across the nation are in crisis, and a big part of the reason why is that they can’t afford their Medicaid programs. Arizona has already proposed dropping roughly 280,000 individuals from its Medicaid rolls, and is looking to the federal government for permission. Other states may soon follow. In response to the , the Obama administration’s Health and Human Services department has provided some guidance. By judging by this write up in The New York Times, I’m not sure it’s all that helpful:

An administration official, discussing the letter on condition of anonymity, said: “Cuts can hurt people. We certainly see that.”

The official said that, instead of taking an ax to Medicaid, states should find ways to save money and improve care at the same time.

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This is the sort of wisdom that only the federal government’s auteurs of bureaucracy could come up with: Instead of making cuts to services, states should find ways to save money that also make care better. After all, doing more with less is usually so easy. And clearly no one has thought of this idea before. If they’re still short, presumably HHS will encourage them to find those pots of free gold that are constantly getting left near the ends of rainbows.

I kid! And sure, maybe there really are efficiency gains to be made:

For example, the official said, states should more aggressively manage the care of the sickest Medicaid recipients.

“Just 1 percent of all Medicaid beneficiaries account for 25 percent of all expenditures,” Ms. Sebelius said, and 5 percent of the recipients account for more than half of Medicaid spending.

Sorry, but isn’t “aggressively manage the care of the sickest” patients code for “doing less for resource-intensive patients in order to save money?” Now, doing less in order to save money may be necessary for fiscally problematic programs like Medicaid. But that sounds an awful lot like those potentially harmful cuts that our friendly anonymous administration official was warning could hurt people just a few sentences earlier.