States should be able to make use of their private health insurance market through their Medicaid eligibility levels, program design and ability to offer premium assistance. Currently, states are prevented, until 2019, from moving youths enrolled in their Children’s Health Insurance Programs to their parents’ insurance if the coverage was purchased in an exchange. It doesn’t make sense for family members to be in different coverage programs or for the federal government to crowd out and replace private coverage with a government-run program. Furthermore, states should have the ability to grant “premium assistance” for Medicaid-eligible individuals at any income level to buy into the health insurance market.
Finally, the Department of Health and Human Services (HHS) should streamline Medicaid financing and improve the process to give states more flexibility, coupled with greater accountability. The process by which states negotiate for flexibility, called “waivers,” is broken. Federal officials should have greater accountability for timely review of waiver applications. In particular, waiver applications based on those already approved in other states should be fast-tracked. HHS should allow states to opt in to a more flexible long-term-funding arrangement, allowing them to design programs that best meet residents’ needs, rather than requiring the same package of services for every individual. At the same time, federal and state officials could agree to greater accountability for improvements in health outcomes, not just processes.