A Medicaid and Children's Health Insurance Program Primer and Reform Outline

James Capretta
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James Capretta: American Enterprise Institute

AEI Economic Perspectives, 2022

Abstract: Medicaid plays a larger role in US health care than was anticipated at its 1965 enactment. The country's heavy reliance on voluntary, job-based insurance leaves gaps in protection for people who are unemployed or who have low earnings and cannot afford premium payments. Further, the disabled and frail elderly need social services in addition to traditional medical care. Medicaid and the Children's Health Insurance Program (CHIP) have, by default, become the nation's safety-net programs for these societal obligations. Medicaid's joint federal-state architecture and open-ended matching system for program financing have facilitated rapid spending and enrollment growth, but they also complicate political accountability, budget and cost discipline, and consistent and fair national administration. Reform can strengthen Medicaid and CHIP by improving incentives for cost control while ensuring all Americans have a basic level of protection. Medicaid and CHIP can support market incentives by filling in gaps and reinforcing competitive pressures where possible.

Keywords: AEI Economic Perspectives; Health Care Reform; Medicaid; Medicaid-CHIP (search for similar items in EconPapers)
JEL-codes: A (search for similar items in EconPapers)
Date: 2022
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