Politics & Policy

Bring Competition to Medicaid

My new bill would encourage patients to shop around, and providers to compete for their business.

Nearly a decade after Obamacare became law, only 34 percent of Americans rate the U.S. health-care system as good or excellent. This is because the law did nothing to address the essential problem in health care: No one shops for price.

Look at Lasik eye surgery. When it was introduced, the procedure cost several thousand dollars per eye. Since no third-party payer covered the costs, ophthalmologists had to compete for consumer dollars the old-fashioned way — negotiating with patients directly. As a result, the price of a Lasik procedure has now plummeted to a few hundred dollars — as cheap as an X-ray — while the technology has only improved.

Congress’s biggest health-care priority should be to create a free market where providers compete on price and the patient is in control. A bill I am introducing in the House today would bring this kind of competition to Medicaid, the federal health-care program for the low-income.

As a Tennessee state senator, I introduced an idea for a program that allows Medicaid recipients a “swipe card” with dollars on it designated for medical purchases. Coupled with an insurance plan that covers catastrophic expenses, this ensures Medicaid recipients a safety net while at the same time encouraging them to find the best deals on their care — especially since they get to keep the money they don’t spend each year, in the form of an earned-income tax credit. Additionally, physicians are paid immediately, making the costly claims process unnecessary and encouraging medical providers to compete for these patients.

Unfortunately, this program, while it has been signed into law in Tennessee, has not received federal approval yet from the Centers for Medicare and Medicaid Services (CMS). Now that I’m a federal lawmaker, I will attempt to spur things along with the Medicaid Improvement and State Flexibility Act. This bill would direct CMS to allow all states to test this idea through a pilot program.

I am confident the pilot program will be successful. We already possess a similar successful model: The Supplemental Nutrition Assistance Program (SNAP). Forty million Americans receive assistance for food and at the same time shop in a free market for food. SNAP recipients are fed, businesses compete to attract them, and food remains affordable.

There are other ways to introduce competition to American health care as well. For those Americans who do not need the assistance of Medicaid, Congress can pass the Health Savings Account (HSA) Expansion Act, which was introduced by my fellow Republican Mike Gallagher. The proposal would dramatically expand the scope of HSAs, which allow people to save money tax-free so they can help pay for some of their own medical costs. Patients with HSAs pay attention to prices; they want to most effectively stretch the resources in their accounts.

In stark contrast, Democrats are doubling down on the failures of the current system. They are offering radical proposals such as Medicare for All, which would “eliminate private health insurance,” create a single-payer system, and guarantee insurance for everyone. Since it would also require doubling everyone’s taxes and would likely harm the economy, impair quality, restrict access, and limit choice, we should look elsewhere.

Republicans need to take the lead on health-care policy again. The Democrats had their chance and failed with Obamacare. We won in 2016 on a campaign to repeal broken Obamacare. We lost the House in 2018 because the Democrats’ messaging killed our repeal effort. Future elections will be won or lost by the party who can insert the free market back into health care. The time is now, and we are the leaders to get it done.