The Unintended Consequences of Leaving Healthcare to the States

It’s stalling the labor market, and Republicans don’t seem to care

With the failure of repeal and replace at the federal level, Republicans have shifted their health care reform efforts to the state level. A key tool in the health care fight has been the push for waivers that allow states to deviate from federal standards for Medicaid coverage. Supporters of this approach argue that turning states into laboratories of health care policy will spur innovation.

As of August 29, 2018, the Kaiser Family Foundation lists 69 approved and pending waivers. Some restrict eligibility and enrollment, and some impose work requirements; others limit coverage for “behavioral health” problems such as addiction treatment and mental health, and still others impose premiums and fees with disenrollment for nonpayment.

I have argued that some of these waivers are built on bad ideas—but that may be beside the point. After all, the purpose of trial runs at the state level is not just to allow the introduction of good ideas, in the hope that they will spread; the purpose is also to prove that bad…