Republican lawmaker says state should switch to block-grant system for Medicaid

Democratic Gov. Steve Beshear has argued that his expansion of Medicaid under federal health reform will improve Kentucky’s health, but a freshman Republican legislator with experience in state health policy says a whole new approach would do much more for less money, providing funds that could be used to help Kentucky’s mental-health agencies or to provide education, public protection and other services.

Rep. Robert Benvenuti

Rep. Robert Benvenuti of Lexington, former inspector general of the state Cabinet for Health and Family Services, told Ryan Alessi of cn|2 that the state could improve Medicaid with a block-grant system, which  could be implemented through a federal waiver. It would effectively end the open-ended approach to Medicaid, meaning that rather than paying a set amount per enrollee, states would be provided with annual lump sums and be free to run the program as they wanted, reports Kaiser Health News.

Republican governors have long lobbied for this flexibility, saying that it would result in a cheaper, more effective program, but the Democratic governor of New York, the independent governor of Rhode Island (who will run for re-election as a Democrat) and the Republican governor of Indiana have been granted waivers to implement a block-grant system, and their results suggest such system could improve Medicaid. Indiana used its waiver to introduce subsidized health savings accounts, which increased satisfaction rates for Medicaid enrollees to 94 percent by granting them more control over their own health dollars, reports Avik Roy of Forbes magazine, writing that Rhode Island saved $1.34 billion from 2008 to 2010, “an astounding figure for such a small state.”

Benvenuti said Kentucky’s current blanket-coverage system “doesn’t provide any incentive with co-pays and deductibles to get the person with diabetes to be more careful about their weight, to manage their diabetic condition better. . . . The more we say we are simply going to blanket our commonwealth with Medicaid recipients, then the less we’ll have to target what ultimate will be the solutions: education and true management of health.”

A block-grant system provides flexibility to address Kentucky’s specific needs, says Benvenuti. “You would then have money to say ‘In Kentucky, what are our health issues?’ And we could drive centers of excellence in cardiac care, in drug addiction and mental health much deeper into our commonwealth, much more at a grassroots level and provide that care,” he told Alessi. The cabinet declined to comment.

Throughout his career as a health-care attorney and work with numerous health systems, Benvenuti has focused on fraud and abuse as well as other operational and regulatory issues facing health-care providers. As the cabinet’s inspector general, he led “investigations involving more than 3,000 health care facilities and services” across the state, says his website. Here’s his interview with Alessi: