Congressional Republicans have called for restructuring Medicaid, reviving a debate that has largely remained dormant for two decades. During the mid-1990s, Congress and President Clinton advanced competing Medicaid reform proposals. Republicans urged that the federal government issue Medicaid block grants to states. The White House and congressional Democrats proposed instead to place per capita limits on federal Medicaid payments to states. The most salient difference between these approaches is that per capita allotments retain the individual entitlement to Medicaid while block grants generally do not. Today, Republicans who once resisted Medicaid per capita allotments support them, and Democrats who backed such allotments oppose them. Given this legislative history, policymakers seeking common ground might look to Medicaid per capita allotments as a point of departure.

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In what will be a busy week in Washington, the Republican House hopes to take another whack at ObamaCare reform, a large chunk of which is Medicaid. As if this were not enough to handle, Donald Trump promises a “big announcement” Wednesday about his tax plan, which will likely include cuts in the corporate tax rate.

Let us stipulate that Medicaid reform and corporate tax cuts are both excellent initiatives. Done properly, each would offer Americans, including those at the lower end of the income scale, a better deal than they have now. Unfortunately, pitching health-care reform as the way to help “pay for” corporate tax cuts undermines the best arguments for both.

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As Republicans take another crack at devising a plan to replace ObamaCare, here’s an idea they should consider: Give each Medicaid patient a health savings account—and put $7,000 in it every year. Under ObamaCare, Medicaid has become the only option for millions of Americans. But that doesn’t mean much if the doctors in their communities don’t accept new patients through the program.

The GOP’s recently benched health care bill would have substantially reformed Medicaid by giving the states block grants, along with more flexibility on how to spend the money. But there’s a better model. Republicans should empower Medicaid patients by providing funds to them directly, which would allow them to build a personal safety net that could last a lifetime.

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By ending federal matching funds and shifting managerial responsibility to the states, Republicans propose to modernize Medicaid’s funding and give local authorities greater flexibility to design program innovations that are more specific to each state’s needs. The reason Medicaid costs less than private insurance is because it provides less. Medicaid provides “comprehensive coverage,” but coverage isn’t care. It is easy to write down a long list of services that are covered. Think of it as having a coupon for free health care—a coupon that is difficult, sometimes impossible, to redeem. Per capita allotments or block grants may result in reduced federal spending, but their primary purpose is to bring about reform of Medicaid.

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The demise of the American Health Care Act (AHCA) was ultimately precipitated by factional opposition to different provisions of the bill. Moderate and conservative members of the Republican conference did not agree on much, except they shared an animus towards the ill-fated legislation.

The future of health-care reform is now highly uncertain. Forging a legislative consensus will continue to be a challenge due to the inherent trade-offs between broad-based coverage and personal freedom, to say nothing of competing views about the respective roles of the market and the state (including different levels of government).

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Now that House Republicans have squandered their shot at reordering Medicaid, governors who want conservative changes in the health program for ­low-income Americans must get special permission from the Trump administration.

Near the front of the line is Wisconsin Gov. Scott Walker, a Republican who not only supports work requirements and premium payments but also a new additional condition: to make applicants undergo a drug test if they’re suspected of substance abuse.

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The full dimensions of the GOP’s self-defeat on health care will emerge over time, but one immediate consequence is giving up block grants for Medicaid. This transformation would have put the program on a budget for the first time since it was created in 1965, and the bill’s opponents ought to be held accountable for the rising spending that they could have prevented.

The members of the House Freedom Caucus who killed ObamaCare’s repeal and replacement claim to be fiscal hawks. Most of them support a balanced budget amendment. Yet they gave zero credit to a reform that would have restored Medicaid—a safety net originally intended for poor women, children and the disabled—to its original, more limited purposes.

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The Trump administration, working with governors and state legislatures, could make dramatic state by state changes to Medicaid and the ACA marketplaces using two types of state innovation waivers. Section 1332 of the ACA, which went into effect on Jan. 1, 2017, lets states waive several key provisions of the ACA, including the individual mandate, the employer mandate, the premium tax credit, cost-sharing subsidies, and essential health benefits for ACA marketplace plans. In short, Section 1332 (ACA) waivers let states operate their health care systems as if major parts of the ACA do not exist. Additionally, Section 1115 (Medicaid) waivers give states the opportunity to waive federal Medicaid law. The changes made possible by Section 1115 waivers aren’t as dramatic as those contained in the AHCA—for example, states can’t use these waivers to fully restructure Medicaid under block grants or per capita caps, nor can the federal government use them to take away federal reimbursements for Medicaid expansion—but they are still significant.

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President Trump’s pick to run Medicare and Medicaid won confirmation Monday from a divided Senate as lawmakers braced for another epic battle over the government’s role in health care and society’s responsibility toward the vulnerable.

Indiana health care consultant Seema Verma, a protégé of Vice President Pence, was approved by a 55-43 vote, largely along party lines. She’ll head the Centers for Medicare and Medicaid Services, a $1 trillion agency that oversees health insurance programs for more than 130 million people, from elderly nursing home residents to newborns. It’s part of the Department of Health and Human Services.

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According to the CBO, able-bodied adults on Medicaid receive about $6,000 a year in government health-insurance benefits. They pay no premiums and minimal copays. You’d think that eligible individuals would need no prodding to sign up for such a benefit.

And yet, according to its analysis of the GOP ObamaCare replacement, the CBO believes that there are five million Americans who wouldn’t sign up for Medicaid if it weren’t for ObamaCare’s individual mandate. You read that right: Five million people need the threat of a $695 fine to sign up for a free program that offers them $6,000 worth of subsidized health insurance.

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