Medicaid rationing in Oregon: political wolf in a philosopher's sheepskin

Abstract

Although the details of the proposal have shifted since it was first described, the Oregon Medicaid waiver has had one consistent feature: it will reduce benefits to AFDC mothers and children who are currently covered by Medicaid in that state, in the hopes of increasing coverage for other individuals who are now uninsured. Because of the adverse consequences for the AFDC population, there should be strong evidence supporting the purported benefits of the proposal before proceeding with the waiver. One of the most intriguing aspects of the waiver proposal is the claim that the money currently being spent on AFDC beneficiaries could be redistributed to expand coverage to a substantial number of the uninsured. The concept is that far more people could receive the most valuable services if those now being served gave up their coverage of the least valuable services. Other purported benefits of the waiver include enhanced citizen participation in decisionmaking, cost-savings, and improved payment levels and delivery arrangements. Remarkably, this analysis of the proposal reveals that the waiver is likely to achieve none of its stated objectives, and instead will have adverse consequences not identified by its proponents. What the proposal would do is to insulate politicians from visible responsibility for limiting benefits for AFDC children and adults. Finally, the proposal undermines 25 years of Medicaid as an entitlement program. As such, it would establish as a social ethic the principle that the poor can be relegated to inadequate care. Such an extreme measure is not justified by the fiscal situation in Oregon, which is not extraordinarily poor or overtaxed, and does not have a particularly generous or unusually expensive Medicaid program.