Matthew Holt

Cato’s Cannon on Medicaid–Right but Wrong, again

One of my sparring partners, Cato libertarian whizz-kid Michael Cannon, has a new column out about Medicaid and why block grants would stop a big problem. He’s right about the problem. Because states get a matching (and in some cases way more than matching) grant from the Feds, they are incented to make their Medicaid programs more expensive. Cannon echoes Ryan’s solution which is to just give them a fixed amount of money (the block grant). But that would instead incent states to spend as little as possible on Medicaid, making the program even worse for poor people than it already its–as John Goodman and others often point out. Of course none of these right-wingers, nor “sensible”centrist Dems like Tom Daschle are prepared to say the correct thing. Abolish Medicaid and fold it into the universal health insurance program that the ACA (sort of) is. Or better yet put everyone into one central pool and have them all buying into a central exchange–proposed in the House version of the ACA but skewered in the Senate.

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John GoodmanDevon Herrick Recent comment authors
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John Goodman
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John Goodman

I have always believed in abolishing Medicaid and giving low-income people (and everyone else for that matter) a refundable tax credit for the purchase of health insurance. I believe you will find this idea in Patient Power[www.amazon.com/Patient-Power-Free-Enterprise-Alternative-Clintons] the magnum opus I wrote 20 years ago.

Devon Herrick
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Devon Herrick

I like the idea of a block grant because there is not a one-size-fits-all solution. Rather, there are 50 states that could experiment and find a solution that fits each state’s unique needs.