“People overestimate what they can accomplish in one legislative session and underestimate what they can accomplish in ten.”
In this series, we are conducting a review of the incredible record Mississippi lawmakers have put together over the past 10 years. The list provided here is not comprehensive, and we feature only the policies we like: some of which were initiated by MCPP (marked by an *asterisk* below). (Or, in the case of the many accomplishments below, nearly all of which were initiated by MCPP.)
So far, we have covered:
10 Years of Social Welfare Achievements
10 Years of Religious Liberty Achievements
10 Years of Second Amendment Achievements
10 Years of Pro-life Achievements
10-Years of Healthcare Achievements
10 Years of Education Achievements
In this installment, we will be looking at legislative accomplishments aimed at cutting red tape to make it easier to start a business, obtain a good job, and lead a good life in Mississippi. These are the highpoints over the past 10 years:
In 2013, MCPP worked closely with Senator Angela Hill to pass the state’s first cottage food law (SB 2553). This reform unleashed a culinary revolution of small entrepreneurs baking cakes and cookies and making pickles and other homemade goods. The law exempted small entrepreneurs from onerous regulations better suited to largescale providers. In 2020, we successfully expanded the law, with a bill (HB 326) sponsored by Rep. Casey Eure.*
In 2015 and 2016, we led the way in passing a legislative package known as “Financial Ready.” These reforms, passed as part of separate bills related to performance-based budgeting, require state agencies to identify their dependency on federal grants and quantify the fiscal and other compliance costs associated with these grants. Mississippi was the second state in the country to enact Financial Ready.*
Also in 2015, MCPP launched the effort to combat the Obama administration’s arguably unconstitutional Clean Power Plan. In addition to collaborating with state policymakers to voice their objections as part of the federal rulemaking process, we worked on various bills to provide for more transparency and accountability for the plan. In the end, lawmakers passed a resolution declaring Mississippi’s opposition to this federal attempt to take over state electrical grids (SCR 637).*
In 2017, MCPP was proud to work with Americans for Prosperity (MS-AFP) to help pass a law (HB 1425) that requires the state to actively review new regulations issued by occupational licensing boards. AFP led the way in this effort, and we assisted with messaging support and other expertise. The law implements a structure to provide “active supervision” over occupational licensing boards so that they “use the least restrictive regulation necessary to protect consumers from present, significant and substantiated harms that threaten public health and safety.” In 2020, Rep. Jerry Turner strengthened the review process so as to apply to existing (and not just new) regulations (HB 1104).
In 2019, the Legislature made it easier for certain Mississippi residents with a criminal record to obtain an occupational license. Known as “Fresh Start,” the law strikes a balance between protecting public safety while helping ex-offenders reintegrate into their families and communities by getting good-paying jobs. According to the Institute for Justice, following the passage of Fresh Start, “Mississippi now has some of the best laws in the country for ex-offenders seeking licenses.” Fresh Start was sponsored by Rep. Mark Baker and Senator John Polk (SB 2781) and was a priority for MCPP.*
Also, in 2019, Mississippi became the first state in the nation to pass a comprehensive law to protect the privacy of those who give to the causes and charities they hold dear. This law has sparked a movement of states committed to protecting free speech and the freedom of association from government agencies seeking to weaponize and politicize charitable giving. This legislation (HB 1205) was sponsored by Rep. Jerry Turner and Rep. Mark Baker and was a priority for MCPP.*
In 2020, the Legislature again turned toward eliminating burdensome occupational licensing requirements. Sponsored by Senator Chuck Younger and championed by Rep. Steve Hopkins, the Military Family Freedom Act (SB 2117) makes it easier for military personnel and their families to obtain a Mississippi occupational license by recognizing existing credentials and experience earned in other states. Arguably the best law of its kind in the country, this reform put Mississippi on the map as a destination state for military families seeking to live and work here.*
In 2021, thanks to the leadership of our legal center, the Mississippi Justice Institute, the Legislature altogether eliminated occupational licensing requirements for select practitioners in the cosmetology field. This law (HB 1312) was sponsored by Rep. Jerry Turner.*
Finally, in 2021, building upon our success with the Military Family Freedom Act, lawmakers made it easier for anyone who has earned an occupational license in another state to obtain a license in Mississippi. Authored by Rep. Becky Currie, this legislation (HB 1263) was a priority for MCPP and the result of years of hard work to make it easier for qualified professionals to move to Mississippi and work in their chosen field.*
Students who are falling behind in school – in particular, those who are at below grade level – are at greater risk of dropping out of high school. This can have detrimental lifelong impacts, as well as negative economic consequences for dropouts and society at large.
*This report can be read in its entirety here.*
This issue is much more important in this era of COVID-19, as many more children are falling behind grade level. Policymakers should therefore pay attention to state remedial education programs and consider whether current resources, both state and federal, are being used to the best advantage for kids who are falling behind.
The Achievement Gap Has Gotten Bigger
Research conducted during the COVID-19 pandemic by the consulting firm McKinsey found that minority and low-income students are at much greater risk of falling behind because of school closures and disruptions. They found that:
- Black students may fall behind by an additional 10.3 months;
- Hispanic students may fall behind by an additional 9.2 months;
- Low-income students may fall behind by an additional year.
Achievement gaps between groups of students were very large and stubbornly persistent for decades heading into the COVID-19 pandemic. And, from March 2020 to June 2021, McKinsey estimates that these achievement gaps will grow by another 15 to 20 percent.
McKinsey forecasts that the learning loss from COVID-19 “may translate into long-term harm for individuals and society.” They estimate that the decline in student achievement will have a national cost in upcoming years of $110 billion in annual earnings for students, higher crime and incarceration rates, and other negative social outcomes.
Other recent studies are arriving at very similar conclusions.
New Solutions Are Needed
Given the decades-long failure of existing remediation programs and the acute learning losses due to the pandemic, it is time to try something new to help students who are falling behind.
The research consensus on remediation programs for public school students is that they have performed poorly for decades. Federal and state funding for remediation programs have increased significantly over time. For example, federal Title I-A funding increased by 81 percent between 1980 and 2017 in real (inflation-adjusted) terms.[1] Despite this large increase in funding, Title I has not boosted student achievement (Brookings report: Dynarksi and Kainz, 2015) and been poorly targeted to the students most in need (Hamilton Project, Gordon, 2016). Further, achievement gaps between groups of students have been stubbornly persistent for decades (Hanushek, et al., 2020).
Students who fall behind grade level and remain behind for a period of years often end up as high school dropouts. The economic consequences of dropping out of high school are severe: lower lifetime earnings, more poverty, increased use of government welfare programs, reduced generation of tax revenue, higher rates of divorce and out-of-wedlock births, higher incarceration rates, more drug use, lower life expectancy, etc.
Given the expensive and absolute failure of federal remediation programs, it is clearly left up to the states to do something about helping students who are behind grade level.
[1]Congressional Research Service, 2017. Title I-A grants are to be used to “provide supplementary educational and related services to low achieving and other students attending elementary and secondary schools with relatively high concentrations of students from low-income families.”
*To continue reading this report in its entirety, click here.*
What a mess! Last week Mississippi’s Supreme Court overturned the medical marijuana initiative that voters had overwhelmingly approved in November last year.
The ruling renders a democratic decision 1.3 million Mississippians helped make null and void. Worse, the state Supreme Court ruled that the entire initiative process itself is ‘unworkable and inoperable’, meaning that we no longer have any meaningful form of direct democracy in the Magnolia state.
Irrespective of our own personal views about medical marijuana, I hope we can all agree that something has gone badly wrong when 70 percent of voters can vote for something, as they did for medical marijuana, but have their choice ignored.
What went wrong?
The problem is the process for triggering the initiative vote. Our state constitution (Section 273) allows a popular vote to take place to amend the constitution if enough signatures are collected across each of the state’s five congressional districts.
Sounds good, doesn’t it? Making sure that support for an initiative comes from across the state is perfectly sensible. But there is one small flaw; our state only has four congressional districts, not five. Mississippi has only had four since 2002, when we lost our fifth congressional seat – and our law makers never got around to updating the rules.
We should not blame the state supreme court for this fiasco. They only interpret what the rules say. Responsibility lies with our legislature, which over almost two decades failed to act to update the rule book.
Before coming to Mississippi, I co-founded Vote Leave, the official campaign that won the Brexit vote in Britain. The Brexit vote is a powerful example of how ordinary folk can achieve real change. It shows why citizen-led initiatives are essential.
After a clear majority voted for Brexit, all kinds of efforts were made to try to overturn the result. I know what it is like to have direct democracy opposed by those that don’t want change. Today many Mississippians who voted last fall for initiative 65 will feel cheated.
While there needs to be a special session of the legislature to address the issue of medical marijuana, lawmakers should take their time when it comes to fixing the initiative process. It's something we need to study, hold hearings on and address in 2022.
Mississippians only gained a right of initiative in the 1990s. It now turns out that that right never actually existed for most of that time after all. Our law makers need to get this right.
Obviously there must be a workable process for gathering signatures to trigger initiatives. But we should take this opportunity to ask if other improvements are needed to ensure that we have a system of direct democracy that actually works.
Is it, for example, healthy that popular votes are aimed at achieving amendments to the state constitution, rather than statutes? Our state constitution sets out the basic rules by which the political game is played. Rather than continually aiming to change those, might it be preferable if popular voters changed statutory law?
Under the current set of rules, when an initiative looks likely, our lawmakers have – in effect – an opportunity to try to doctor the question. Should we make it harder for this to happen?
Last, but not least, should we insist – as some other states do – that initiatives are tax neutral, in order to avoid a situation in which Mississippians are encouraged to vote to be generous with someone else’s money?
Far from undermining the argument for giving people the power of initiative, the failure of our lawmakers to act over the past two decades shows precisely why citizen-led initiatives are essential. We cannot simply leave politics to politicians.
This post was originally published in the Clarion Ledger and can be read here.
“People overestimate what they can accomplish in one legislative session and underestimate what they can accomplish in ten.”
In this series, we are conducting a review of what Mississippi lawmakers have accomplished over the past 10 years. The list provided here is not comprehensive, and we feature only the policies we like: some of which were initiated by MCPP (marked by an *asterisk* below).
So far, we have covered:
10 Years of Religious Liberty Achievements
10 Years of Second Amendment Achievements
10 Years of Pro-life Achievements
10-Years of Health care Achievements
10 Years of Education Achievements
In this installment, we will be looking at legislative accomplishments regarding social welfare. We will focus on only two laws: but they are each, in their own right, very significant accomplishments. The first is the 2017 HOPE Act. The second is the 2019 Children’s Promise Act. MCPP led the way in getting these policies passed and has, also, assisted with the ongoing implementation of these programs.
The Hope Act*
In 2015, Rep. Chris Brown, Rep. Jason White, and Senator Josh Harkins partnered together to strengthen Mississippi’s welfare system by rooting out fraud and abuse. One of those bills (HB 740) passed the House, but died in the Senate. In 2016, Senator Kevin Blackwell joined the effort and an even stronger bill almost passed both chambers. Finally, in 2017, Mississippi passed what some observers still consider the gold standard for recent state welfare reform efforts: The HOPE Act (HB 1090). According to one independent review, the HOPE Act moved “Mississippi to the forefront of states in overall benefits integrity and the move from reliance on benefit programs to employment.”
Even higher praise came from the law’s critics, with The Nation commenting: “The legislation reads like a compilation of all-time favorites from a Republican wish list.”
The HOPE Act contains multiple commonsense reforms. One such policy entails verifying whether people on Food Stamps (SNAP) live in Mississippi, are in prison, or, even, whether they are still alive. Another reform is the restoration of federal income and asset tests, thus insuring that millionaires and others stay off welfare. In addition, the law instituted a third-party eligibility auditing system estimated to save state and federal taxpayers millions of dollars.
In November 2019, the Foundation for Government Accountability (FGA) undertook an analysis of just one of the reforms in the HOPE Act: a codification of the federally mandated (but often ignored or “waived”) requirement that able-bodied adults without children work, train or volunteer in order to receive Food Stamps.
The results were astonishing.
Prior to the reform, notes FGA, “Just two percent of able-bodied, childless enrollees were engaged in full-time employment. A staggering 85 percent of these able-bodied adults were not working at all.”
After Mississippi reinstituted the SNAP work requirement, able-bodied adult enrollment declined by 50 percent within 3 months, decreasing by 72 percent after almost two years. This reduction in welfare dependency resulted in $93 million in taxpayer savings a year.
Even more encouraging, former welfare recipients obtained employment in more than 700 different industries, with incomes more than doubling.
Again, these advances are from just one of the reforms in the HOPE Act. It is certainly a popular achievement worth celebrating and one MCPP is proud to have played a leading role in helping pass.
The Children’s Promise Act*
Another very important and popular policy victory championed by MCPP is the Children’s Promise Act.
Foster care in Mississippi, as in other states, has struggled under the weight of broken families, drug addiction and human trafficking. The problems the foster care system faces are too complex for government to handle alone. The idea behind the Children’s Promise Act is to generate better outcomes by encouraging the state and the private sector to work together. This is encouraged by offering a tax credit for donations made to nonprofits working with the Department of Child Protection Services (DPS).
The National Council of Nonprofits estimates that every $1 in tax breaks for nonprofit donors saves government $5. A tax break for foster care nonprofits is thus a great way to save the state money. More important, by inviting new donors to support foster care nonprofits, the state is also inviting new eyes, hands, and hearts to take a fresh look at how we can help foster kids, children in poverty, and children with special needs.
The initial iteration of the Children’s Promise Act was passed in 2018. That law (HB 1566), sponsored by Rep. Roun McNeal, contained two different personal income tax credits aimed at helping children with special needs, as well as children in foster care. The law also increased the state tax credit for families hoping to adopt.
The first tax credit in HB 1566 was an $800 credit for donations to diverse organizations (QCOs) that assist low-income families and children with special needs. The second tax credit was a $1,000 credit for donations to organizations (QFCCOs) that specifically work with children in foster care. The law also doubled the state’s existing adoption tax credit from $2,500 to $5,000.
In 2019, MCPP worked with our coalition partners to take the 2018 law and transform it into the Children’s Promise Act (HB 1613), sponsored by Rep. Mark Baker.
This law expanded and improved upon the initial framework laid down in 2018 and significantly increased the amount of money available to help nonprofits in Mississippi. The law contains five different tax credits:
- The original $800 personal income tax credit for donations to nonprofits helping low-income families and children with special needs;
- The original $1,000 personal income tax credit for foster care nonprofits;
- A continuation of the $5,000 adoption tax credit;
- A business tax credit for donations made to foster care nonprofits;
- A business tax credit for donations made to educational service nonprofits.
In 2020, the Legislature again expanded the Children’s Promise Act, doubling the cumulative business tax credit from $5 million to $10 million and providing additional funding stability for the program.
Along with Arizona, Mississippi has been a pioneer in using tax policy to strengthen the state’s foster care and social welfare systems. We were the first state, in particular, to enact a business tax credit to generate largescale donations to foster care nonprofits.
MCPP is proud to have played a leading role in helping pass and implement the Children’s Promise Act and encourages our readers to take advantage of these individual and business tax credits that are doing so much good.
Every session has its share of infighting and ups and downs.
The 2021 session was no exception, as we saw two major issues gum up the process. (Stay Calm: Democracy is supposed to work this way.) Led by Speaker Philip Gunn, the House passed a major income tax reform bill. When the Senate declined to seriously consider this initiative, the House found itself less than enthusiastic about the Senate bills that had crossed over for the House’s deliberation. In turn, the Senate soon found itself feeling the same way about anything the House was working on.
For its part, Senate leadership was pushing a bill to provide a statutory substitute for the recently passed medical marijuana constitutional amendment, in the off chance the initiative should be struck down by the Mississippi Supreme Court. This bill passed the Senate, but failed in spectacular fashion on the House floor. With Initiative 65, indeed, having been struck down by the court, the Senate’s efforts seem prescient, to say the least.
In the end, the two chambers agreed on enough good (and bad) ideas to keep the wheels of democratic government turning. These are our own personal highlights of the 2021 session:
Protecting Women’s Sports and Title IX. … MCPP led the way in getting the Fairness Act (SB 2536) passed. We initiated this effort last year, working with Senator Angela Hill, and were gratified to see it signed by Gov. Tate Reeves. Mississippi is the second state in the country to enact such protections for female athletes, in spite of stiff opposition from the radical left and woke corporate oligarchs.
Making Mississippi a Destination State for New Residents … MCPP also led the way in getting passed a law (HB 1263) that makes it easier for new residents to obtain a Mississippi occupational license. This legislation builds on the best-in-the-nation Military Family Freedom Act we worked on last year. That law makes it easier for military spouses and dependents to work in Mississippi. The 2021 law, sponsored by Rep. Becky Currie, expands similar opportunities to all new Mississippi residents. We are the eighth state in the country to pass this innovative reform.
Holding off Medicaid Expansion … Mississippi is one of the last states to resist Obamacare by not expanding Medicaid. In spite of strong financial incentives out of Washington, D.C., state leaders, especially the Governor and Speaker Gunn, are standing firm. Medicaid is an expensive, horrible insurance program, as I detail here and here. As an aside, it’s also not much of an option for the “working poor” because it serves as an incentive not to work at all. According to the Foundation for Government Accountability, the majority of able-bodied adults on Medicaid, the population targeted for expansion, are not working at all.
Blocking Welfare Expansion … The HOPE Act, championed by MCPP in 2017, is still the best welfare-to-work law in the country. The Biden administration, however, is encouraging states to pursue policies aimed at expanding welfare participation as much as possible. (For instance, see here.) After one such bill that would have weakened the HOPE Act passed out of committee in the Senate, we got to work and made sure this bad policy died.
Securing Economic Liberty for Mississippi Entrepreneurs (HB 1312) … This law allows individuals in select fields of cosmetology to practice their profession without acquiring thousands of hours of training. Lawsuits filed by the Mississippi Justice Institute were the catalyst for this reform.
Encouraging States to Balance the Federal Budget … In 2015, thanks to the leadership of House Pro Temp Rep. Greg Snowden and Senator Joey Fillingane, Mississippi became a founding member of the Compact for a Balanced Budget. The Article V compact would force the federal government, not only to craft a budget, but to actually balance it. The compact was scheduled to sunset in 2021, but Mississippi renewed it with the passage of HB 1326. MCPP was the force behind getting the compact passed into law several years ago.
(Almost) Expanding Healthcare Access via Telemedicine … Although a bill to advance telemedicine stumbled at the finish line, MCPP made significant strides in educating lawmakers about this issue. We have a good foundation to pass reforms in 2022.
(Stay Tuned for) Eliminating the State Income Tax … Speaker Philip Gunn’s bill to eliminate the income tax failed to pass in 2021, but the stage has been set for hearings and a study over the summer. I’ll go out on a limb and predict that we’ll see a major tax cut before the next statewide elections in 2023.
“People overestimate what they can accomplish in one legislative session and underestimate what they can accomplish in ten.”
In this series, we are conducting a review of what Mississippi lawmakers have accomplished over the last 10 years. The list provided here is not comprehensive, and we feature only the policies we like: some of which were initiated by MCPP (marked by an *asterisk* below), some of which are good ideas we are happy someone else took the lead on.
In the first part of this series, we reviewed education accomplishments. In this part, we are looking at healthcare. After all, education and healthcare are essentially the two biggest priorities in the state budget. K-12 education is the single largest item in the state budget while healthcare (especially Medicaid) is the single largest item in the total state budget (federal and state revenue).
Healthcare policy in Mississippi over the past 10 years has been shaped largely by Obamacare. Mississippi’s response has mostly been limited to managing the damage.
In 2013, Mississippi became the only state to have its application to set up a state-based insurance exchange rejected by the Obama administration. This rejection, from our perspective, was a huge victory because it forced the administration to set up a federal health insurance exchange. The plan was to delay implementation of Obamacare until Republicans could repeal it … except the repeal never happened.*
At the same time, Mississippi is one of 12 states that has declined to expand Medicaid to able-bodied, working-age adults. This mandate was an original feature of Obamacare until the U.S. Supreme Court struck it down as an unconstitutional overreach by the federal government.* It was bad policy then, it remains bad policy now.
One of the high points of healthcare policy in Mississippi over the past few years has been the steady advance of Right to Try. This law waives federal regulations that often hinder the ability of patients with a terminal illness to take advantage of new medications and technologies. We initiated the first Right to Try law in Mississippi in 2015 (SB 2485). Thanks to the leadership of Senator Josh Harkins, the law was expanded in 2016 (SB 2527) and 2020 (SB 2830), making our Right to Try policies among the best in the country.*
Another high point are protections for direct primary care (SB 2687), passed in 2015. This law helped launch the direct care/concierge care movement in Mississippi. The law clarifies that patients can pay cash to see a doctor, instead of using an insurance plan.*
Mississippi also has one of the better telemedicine systems in place. Telemedicine has made a slow, steady advance in Mississippi over the last 10 years. A bill that would have expanded telemedicine further died in conference in 2021, but it’s likely telemedicine will continue to grow in Mississippi.*
Mississippi Center for Public Policy (MCPP) has announced today that Lesley Davis has requested to step down as its Executive Vice President. After successfully serving as its Interim CEO and then as its EVP after leading the search for the current CEO, she will continue to serve the organization in a policy making role as a member of its Board of Directors.
Announcing the decision, Chairman of the Board, James Herring said “We are incredibly grateful to Lesley for all that she has done to support MCPP; this organization owes her an enormous debt of gratitude. Lesley joined our Board of Directors in February 2019, and took over as Interim CEO in July 2020, leading our Board through an extensive search to find our new President & CEO. Since our new President & CEO arrived in January, Lesley has been of tremendous support in her role as Executive Vice-President and as a member of MCPP’s Board of Directors. We thank Lesley for going above and beyond the call of duty for the past nine months. Her work ethic, skills, knowledge, and passion have helped move this organization forward in our mission of advancing liberty-minded ideals. Having successfully helped steer our organization through this transition, I am delighted that Lesley has decided to remain on the organization’s Board of Directors.”
Douglas Carswell, the newly appointed President & CEO, said “I am tremendously grateful personally for all that Lesley has done to help me transition smoothly into the role of Chief Executive Officer. She has been an incredible EVP to me, and I am sad to see her go. I look forward to continuing to work with her in her role as MCPP Board member.”
“The Mississippi Center for Public Policy exists to advance the cause of liberty and make the moral case for free markets. Lesley has been, and will continue to be, a great advocate for the conservative cause,” Herring said.
“People overestimate what they can accomplish in one legislative session and underestimate what they can accomplish in ten.”
As the 2021 legislative session comes to a close, we’re conducting a review of all that Mississippi lawmakers have accomplished over the last 10 years. All in all, it’s been a very productive period.
In this series we will be providing highlights of policy reforms passed in a range of different areas: Education, Healthcare, Right to Life, Civil Liberty Protections (“God and Guns”), Welfare/Foster Care, Regulatory Reform and Budgeting/Taxes. This list is not comprehensive, and we feature only the laws we like, many of which were initiated by MCPP (marked by an *asterisk* below).
These are the highpoints in education policy over the past 10 years:
Mississippi passed its first charter school law (HB 369) in 2013. The law was updated and improved in 2015 (HB 859) and, again, in 2016 (SB 2161). Mississippi now has six charter schools.*
Also in 2013, the state enacted the third-grade reading gate program, sponsored by Senator Angela Hill (SB 2347). This law prioritizes teaching kids how to read by third grade. We were the 14th state to pass it. Since this law was enacted, Mississippi’s fourth-grade reading scores (on the NAEP) have dramatically improved.*
In 2013, the state also reformed the way it evaluates districts and schools, replacing an inflated system in which a “C” school was labelled “Successful” with the easy-to-understand format of A-B-C-D-F. We were the 14th state in the country to enact this policy (SB 2396).*
Two years later, in 2015, the Legislature passed the Equal Opportunity for Students with Special Needs Act (SB 2695), sponsored by Senator Nancy Collins and championed by Rep. Carolyn Crawford. This law creates a scholarship program that allows children with special needs to attend a private school if that school can better meet their needs. Mississippi was the third state in the nation to enact this kind of program.*
In 2020, Mississippi became the second state in the country to pass an innovative apprenticeship/internship program called Learn to Earn, sponsored by Rep. Kent McCarty (HB 1336). Learn to Earn enables kids in public school to obtain access to high-quality educational opportunities with businesses and nonprofits. *
Also worth mentioning is that lawmakers gave teachers a pay raise in: 2021 ($1,000); 2019 ($1,500); and 2014 ($1,500).
“I’ve been thinking a lot about Medicaid, and I’m concerned. I believe Medicaid is suffering from an identity crisis. Medicaid doesn’t know what it wants to be, and it doesn’t know its purpose in life. Some people want Medicaid to expand. I just want it to work.”
… Such are the musings of a healthcare policy wonk in Mississippi.
I have been discussing Medicaid, and healthcare generally, for many years now. I am no longer surprised when people do not know the difference between Medicare and Medicaid. I am surprised, however, when proponents of Medicaid expansion do not seem to understand what Medicaid actually is. For instance, that the Mississippi Division of Medicaid is not a healthcare provider, but a healthcare purchaser and that this distinction has significant consequences.
Medicare is a (mostly) single-payer, national insurance program fully funded by the federal government. By contrast, Medicaid is a joint federal-state program, with lots and lots of federal strings attached.
Medicare is a government-subsidized insurance plan for the elderly. Medicaid is a government-subsidized insurance plan initially created to help the blind, disabled, pregnant women, and children.
Now that we have that straight, what, exactly, is Medicaid?
Medicaid is an insurance program. But Medicaid is also a welfare program. This is the root of the problem for Medicaid. This is why costs keep going up, and this is one reason fraud is such a problem.
Medicaid is the largest single insurance plan in the United States, with approximately 75 million recipients. By contrast, Medicare has 44 million enrollees. This means that the federal agency (CMS) that pays for Medicaid/Medicare is the largest single-payer for healthcare in the United States. In short, if Medicaid were an insurance company it would be huge.
As an insurer, Medicaid does not operate like other insurers. To begin with, this is because health insurance in the United States does not work the way other kinds of insurance do. Consider how your auto insurance or homeowner’s insurance works. Auto insurance does not generally cover a flat tire. Homeowner’s insurance does not cover routine repairs and renovations.
Health insurance, however, covers a much wider array of services than do other types of insurance. It covers preventative care (comparable to controlling for termites or adding gutters, if we are comparing the body to a house). It covers emergency care (comparable to a fire or a flood, which is what typical homeowner’s insurance covers). It covers non-emergency, routine care (comparable to fixing the foundation or installing storm windows).
One reason health insurance is so expensive – though many people do not realize it because the cost is often automatically deducted from their paycheck – is because it covers so much.
Because it covers so much, Medicaid is just plain expensive, all the more so because healthcare prices keep rising. And when I say expensive, I do not mean to the recipients, I mean the overall price tag for the federal government and the states – that is, taxpayers and future debt holders. (This is not even to mention the cost-shifting that leads to increased prices for private insurance customers.)
Another reason Medicaid is expensive is because it is not just an insurance program, it is a welfare program. Indeed, unlike TANF (cash welfare) and other welfare programs, Medicaid is an open-ended entitlement. This means anyone eligible for Medicaid has a legal right to enroll. Federally mandated coverage groups include children, very low-income parents, pregnant women, and aged, blind, and disabled individuals receiving SSI (Supplemental Security Income).
States may cover optional services and populations, and many do in order to drawdown even more federal funds. At the same time, states are prohibited from implementing enrollment caps or individual spending caps. The only real limit on Medicaid spending is demonstrated need. Consequently, as healthcare economist Robert Graboyes puts it, Medicaid is “a market perpetually in a state of excess demand.”
To translate, this means that Medicaid spending is very hard for states to control. Advocates of Medicaid expansion claim it is a great deal because the federal government is paying 90 percent of the cost. This sounds a lot like renting a $10 million mansion at a 90 percent discount. The mansion may be 90 percent off, but you still need to come up with a million dollars in rent every year. Except in the case of Medicaid, that $1 million payment this year could turn into $2 million next year and $3 million after that. And there is really nothing you can do about it.
In order for Medicaid to work better, two things have to happen. First, Medicaid needs to begin operating like other welfare programs. This means enrollment is going to have to be limited. (Which also means expanding Medicaid to able-bodied, working-age adults is a very bad idea if your goal is to provide healthcare to those who really need it.)
Apart from limiting enrollment, which states cannot do right now, the most obvious way to control Medicaid costs is to cut payments to providers. This approach has a significant downside because it will encourage more healthcare professionals to stop taking Medicaid altogether.
The second thing that needs to happen is to begin treating Medicaid insurance as we do other kinds of insurance. This would mean transforming Medicaid into a catastrophic coverage type plan that only pays for major health events and then pairing that coverage with a publicly funded large Healthcare Savings Account (HSA). Such an account would give Medicaid recipients an incentive to control costs for themselves and to invest more in their long-term doctor-patient relationships.
I am not holding my breath for these two reforms to occur anytime soon. The Biden Administration is intent on “increasing access” to healthcare by increasing enrollment in Medicaid, regardless of whether this actually increases access or improves healthcare outcomes. That said, it is important to acknowledge that Medicaid is not like other kinds of insurance or, even, other kinds of welfare. And these are two reasons, among many, that make expanding Medicaid bad policy for Mississippi.