Save Medicaid from itself

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Medicaid is a study in contradiction. Thankstoit, America's neediest get health care paid for by taxpayers. Often they get better health care than taxpayers can afford for themselves.

The program is both "free" and break-the-bank expensive. It lets poor people look rich and rich people look poor, and it rewards lawyers and druggists with real wealth. Medicaid works so well it's going broke.

In a sense, the program is a victim of its own success. It has grown so expansive that even the nation's governors recognize that the future without reform is grim. Reform, by the way, is hardly draconian. It amounts to slowing the growth rate by .3 percent. Medicaid will still grow by 7 percent.

Now, critics say 7 percent growth isn't enough. They call it a cut and say it will devastate the poor. I say that Medicaid is doing that right now. Between 2002 and 2005, 38 states reduced eligibility and 34 cut benefits. The greatest contradiction in Medicaid is that it is both growing and collapsing.

The reforms now working their way through the House will slow the growth and stop the collapse. States can charge basic co-pays of higher-income beneficiaries, and governors may tailor benefits to their citizens' actual needs. Reform also means cutting overpayment for drugs and making it tougher for lawyers to help rich clients pretend they are poor in order to get nursing-home coverage paid by Medicaid.

It is perplexing to me that so many who say they care the most, want to do the least. If you want Medicaid patients to lose health care, the thing to do is nothing. An argument to keep what we have is an argument for bankruptcy, and it will have the perverse effect of cutting health care for those who can't afford it, and who certainly can't afford to lose it. I don't want that. I want fairness and effectiveness from Medicaid.

Here are the basics: Medicaid is a unique federal-state partnership designed to provide health care for poor people. It is welfare, not an earned benefit like Medicare or Social Security. Nobody ever paid a tax into a Medicaid trust fund and then was repaid with a benefit. The federal taxpayer pays about 57 percent of the tab, and states pay the rest. Medicaid currently covers 50 million people and costs $300 billion. It is already the biggest item in many state budgets, exceeding even K-12 education.

Between 2000 and 2005, the national Medicaid caseload increased by 40 percent. Federal and state costs have risen 56 percent over the past six years.