Marc Joffe: What if we stopped rewarding California for overspending on Medi-Cal?
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Why are taxpayers subsidizing healthcare for millionaires? The SJ Merc frames a prudent spending reform to Medi-Cal as a massive and disastrous cut. But maybe that’s just Chicken Little for the underinformed. An interview between policy analyst Marc Joffe and CPC head Will Swaim on the excellent National Review podcast, Radio Free California.
Will Swaim: We've got the mainstream press saying there's going to be steep cuts and it's going to kill children and abandon families and people are going to be left on the streets selling pencils from a cup, and then you've got the Wall Street Journal saying that's not quite true. In fact, it's not true at all. Can you help us figure this out?
Marc Joffe: Sure, the opposing side has really focused on the headline number of $880 billion in cuts. So that is the amount that the House has given to a committee that oversees the Medicaid program, along with … Medicare, Obamacare, energy, commerce, and the Environmental Protection Agency.
Even if they concentrated the entire $880 billion on just Medicaid, it wouldn't involve cutting from 2024 levels what we spend on Medicaid. It would simply involve reducing the rate of increase year to year. Because … this is over 10 years on a very large program.
WS: Even if Medicaid absorbs all of that $880 billion in cuts, the program still grows pretty dramatically.
MJ: Just slower than it would have grown otherwise.
WS: I was surprised to find out that in California, about 15 million people are covered by Medicaid presently, and that's about a third of our population. I was not aware that a third of our population is poor. How have we gotten there?
MJ: … In California, we've expanded Medi-Cal to allow anyone of any age to participate, regardless of immigration status, and so we've attracted an additional 1.2 million beneficiaries into the program that way.
WS: You were a co-author on a massive study from Cato [Institute], in which you came up with some really interesting conclusions about how the rising cost of Medicaid might be controlled. Can you run through a few of those ideas?
MJ: One option would be for Congress to change [matching funds] to either a block grant—where they give a fixed amount of money to the state, and each year the amount would increase slightly—or a per capita payment. At that point, then the state really has a very strong incentive to control costs because they're either going to be stuck with a flat amount or a per-beneficiary amount, and they're not going to get any more from the federal government.
So everything they can save is $1 saved in the general fund or the budget generally that they can use for other purposes, or hopefully—not in California, of course—give us some tax relief.
Listen to the whole thing here [starting at 1:04:37].
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