As Republicans Rethink Medicaid, Rethink What Is 'Health Care'

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Since 1965, Medicaid has stood the test of time as the nation’s principal public health insurance program for the low-income population. Since its inception, the program has ballooned – primarily through a series of program expansions in the 1980s and again after the enactment of the Affordable Care Act in 2010 – so that today the program accounts for nearly 20 percent of State budgets and covers more than 1 in 5 Americans. While Medicare has implemented program reforms (payment reforms such as the inpatient and outpatient prospective payment systems; Medicare Advantage; Medicare Part D; delivery system reform through the Innovation Center), Medicaid has been slower to innovate. However, innovation does not need to come at the expense of coverage for millions of Americans, nor should it. Instead, as thoughtful Republicans rightfully think through ways in which to bring the Medicaid programs into the 21 century, a little out-of-the-box thinking may be the cure.

Under current practice, Federal funding for the state-administered Medicaid program is generally reserved for traditional health care services. So while Medicaid will gladly pay tens of thousands of dollars for an eligible child’s admission to the hospital for an asthma attack, Medicaid will not pay the $100 needed for a portable air conditioner so that the parents of that child can leave the window closed at night in the summertime (thereby preventing that asthma attack.) Both of these services – the hospital admission and the air conditioner – provide clear benefits for the well-being of this child. Yet, one costs thousands and is readily covered, while the other saves thousands and is not covered by the program.

As Medicaid moves into the 21 century, we need rethink “what is health care,” particularly for those most in need. If paying for a driver to take a special needs individual to a job keeps that individual healthier (both physically and mentally), who is to say that this is not a health care service? If a young mother would benefit from a voluntary “home visiting” program to receive guidance to help them become a better parent, does this not improve the well-being of both the child and the mother?

The good news is that this idea is catching on. A recent amendment to Medicaid’s managed care rules permits a state to adopt and even direct payment models “intended to recognize value or outcomes over volume of services.” And states across the country are piloting “pay for success” models, wherein private sector funding steps in to pay for interventions designed to improve lives and save money, offering these investors a return on their investment. But government intervention (or at least clarity) is needed here. As Republicans begin to rethink the Medicaid program, they should also rethink “what is health care” and clarify that Federal dollars are available for evidence-based practices which promote the well-being of the individual and long-term cost savings.

Ruth Ann Norton serves as President & CEO of the Green & Healthy Homes Initiative (GHHI), a national nonprofit founded in 1986 dedicated to the elimination of childhood lead poisoning and the creation of healthy, safe and energy efficient housing for America’s children.

Ross Margulies is an attorney at Foley Hoag LLP where he advises a wide range of health care clients on regulatory and administrative processes and reimbursement matters.