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Paul Howard and Russell Sykes: Medicaid Is Broken—Let the States Fix It October 16, 2012

Medicaid, America’s safety-net program for more than 62 million low-income uninsured Americans, is broken. It’s broken at the state level, where program costs are swamping state budgets. It’s broken for federal taxpayers, as Medicaid waste, fraud and abuse drain tens of billions of dollars from federal coffers every year. And, most important, it’s broken for the millions of families who can’t find doctors willing to accept Medicaid’s rock-bottom reimbursements.

Fixing the Medicaid safety net must be a priority of the next administration and Congress.

The best hope for Medicaid reforms that can improve care for low-income enrollees, reduce fraud, and put the program on a sustainable trajectory is to cap federal spending to the states by using block grants. Block grants would offer states a predictable source of federal funding in return for broad state flexibility in Medicaid administration, benefits and copays.

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