Is diversity a good thing? Last week, the Trump administration embraced diversity in how states run medical welfare programs. It’s a smart move because it offers a chance to get smarter about how we help the poor.
We learn, after all, when we watch different courses of action play out. Instead of being told what someone assumes will work, we see what actually happens. This way of doing public policy is built into our country’s constitutional design.
For the first 140 years of American history, most governing was left to the states. The faraway national government managed foreign trade, kept up the military, and refereed disputes among the states. Day-to-day governing happened in state capitols, county courthouses and city halls.
This allowed diversity and what scientists call tight feedback loops. If a policy didn’t work, it was usually pretty obvious — at least compared to what would happen if the same thing was done from far away and within a massive federal bureaucracy.
The new Medicaid policy is a shift toward this kind of state-based innovation. It also points Medicaid back to its roots as a welfare program for people who were both poor and either elderly, children or disabled.
The Trump administration “will support state efforts to test incentives that make participation in work or other community engagement a requirement for continued Medicaid eligibility” for able-bodied, working-age adults. “Such programs should be designed to promote better mental, physical, and emotional health,” the administration’s guidance letter says, and “may also … be designed to help individuals and families rise out of poverty.”
Oklahoma spends more than $5 billion per year on Medicaid from a mix of state and federal funds. One-quarter of Oklahoma’s population is on medical welfare. In Oklahoma, Medicaid covers 57 percent of all births, and up to 72 percent of all children are on Medicaid at some point in their first five years. Like every other state, the share of our state revenues going to Medicaid has increased dramatically over the last 15 years. This rapid growth puts pressure on funding for schools, roads and public safety.
States are already innovating. Several have improved audits to better eliminate fraud — Arkansas did this and removed 80,000 ineligible people from its Medicaid rolls last year. An audit in Oregon found at least 50,000 ineligible people signed up there. Based on successes in other states, Medicaid audits could save Oklahoma $85.6 million annually.
The new policy is simply an open door. Each state will have more choices about how to design medical welfare, and we get to learn from them all.
Jonathan Small serves as president of the Oklahoma Council of Public Affairs (www.ocpathink.org).