Hawaii, the only state with a universal child health care program in the country, is dropping the scheme just seven months after it launched. The reason:
“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator at the Department of Human Services in charge of the program. [link]
Currently, Hawaii’s families can qualify for Medicaid with incomes that are 300 percent of the federal poverty level – or about $73,000 for a family of four. Keiki Care was designed to cover “gap” kids from families too rich to qualify for Medicaid and SCHIP. However, according to the Honolulu Star Bulletin, about 85% of the 2,000 kids enrolled in the Keiki Care program had previously been enrolled in a private plan.
Managed competition doesn’t work the way its advocates think it works. Despite glowing descriptions of the Federal Employee Health Benefits Program (FEHBP) by Alain Enthoven and equally effusive praise from some of our friends on the right, the FEHBP is deeply flawed. The versions created for state employees and many college and university employees have these same flaws. Managed competition in Medicaid also shares those flaws – even though it may still be an improvement over traditional Medicaid.
A Kaiser study of the Florida Medicaid program found that:
About three in ten enrollees were not aware they needed to choose among competing private health plans.
Over half of those who were aware had difficulty making a choice.
Four in ten enrollees appear to have been assigned to a plan by the state rather than choosing one on their own.
Had Kaiser investigated the FEHBP or any of the various state and university health systems they would have discovered similar lack-of-information and lack-of-understanding problems. Kaiser researchers seem to think (1) they are studying a consumer choice model and (2) they have found flaws in that model. They are wrong on both accounts. Continue reading Managed Competition in Florida Medicaid→
In return for a significant amount of flexibility, Rhode Island has offered to let the federal government cap its Medicaid contribution to the state for the next several years. As part of the proposed deal, Rhode Island would not have to spend more than 23% of its state budget on Medicaid.
The Center for Budget and Policy Priorities calls this a "block grant" and hates the idea [here]. It looks like a "block grant" to us, too, and we love it. The New York Times [here] can't make up its mind. Bush Administration officials at HHS have not yet approved the waiver but they are working with Rhode Island officials to iron out any differences.
Obama Update. He knows more about economics than you think, thanks to a stint at the University of Chicago. [link]
Homelessness Update. FOX News reporter donned old clothes and earned about $10 an hour. Hat tip to Alex Tabarrok at marginalrevolution.com. The full story is in the Manhattan Institute’s City Journal.
Alternative Medicine Update. Herbal supplements may kill you. The JAMA study is here (gated) and here.
Taxing the Poor Update. No one’s going to ban menthol in cigarettes. Governments are making too much money from it. [link]
Barriers to Care Update. As we previously reported here, community health centers are better than Medicaid. They would be better still if they weren’t overregulated, according to Scott Gottlieb in this Wall Street Journal editorial.