Your Next Tax Increase…Medicaid

Medicaid spending is a serious problem and could result in your next tax increase (unless pension liabilities get it first!). Several governors are doing something about it — Tennessee’s Phil Bredesen slashed one of the most generous Medicaid plans in the country, TennCare, taking nearly 323,000 people off the rolls. Florida Gov. Jeb Bush is using a pilot program in two counties, “empowered care” to bring competitive pressures to Medicaid care. Furthermore, perhaps the most innovative plan is Gov. Mark Sanford’s efforts in South Carolina. It is detailed in a Business Week article. The plan follows President Bush’s “ownership society” outline — “it would no longer provide unlimited care, instead offering beneficiaries a fixed amount of money each year to buy insurance and pay out-of-pocket costs. If they run through their accounts, they would have to pay for additional care on their own. But if they hold spending down, they could bank the leftover money to pay future medical costs — or even use it to buy private insurance if they leave the program.” Unfortunately, not all governors are as innovative as these three — Maine’s governor, John Baldacci, continues to expand coverage and offer additional benefits to one of the most aging populations in the country. The Maine Heritage Policy Center has a wealth of information on “Dirigo Health” and reform options to keep the state afloat.