Five Bad Ideas from Commonwealth, Part II

I've never met anyone who would like to forgo his private health insurance for enrollment in Medicaid. Yet this is what many mainstream health policy wonks and most left-of-center health proposals have in mind for the less fortunate. A Commonwealth Fund publication makes five policy proposals. I have already discussed three of them here. The remaining two are:

• Enroll in Medicaid laid off workers who are ineligible to pay premiums to remain in a previous employer's health plan.
• More ambitiously, expand Medicaid to everyone with incomes below 150% of the poverty level.

Is this the way you want your tax dollars spent?

We have previously noted that the quality of care Medicaid enrollees receive is only marginally better than the care obtained by the uninsured [here] and that because Medicaid rates are well below market, Medicaid patients face access problems, including rationing by waiting [here].

Fortunately, President Obama has already suggested (although in different context) a better way: let the public plan compete with private plans. Previously, I proposed using SCHIP funds to create precisely that type of competition, by allowing parents to choose the insurance plans for their children. If they choose SCHIP, then SCHIP gets the government subsidy. But if they choose an employer plan or a privately purchased policy, the dollars go to the private sector.

This same idea is easily (not requiring too much imagination) extended to Medicaid. Instead of giving peoples' health care subsidies to the Medicaid bureaucracy, let the beneficiaries choose between the public plans and all private alternatives.

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