Republicans railing against Medicaid would be well served by reading this brief from the Urban Institute. John Holahan, Lisa Clemans-Cope, Emily Lawton, and David Rousseau argue that the program — which saw an increase in beneficiaries since the Great Recession — has done a better job of containing health care spending than private insurers:

As policymakers explore deficit reduction options involving Medicaid at the federal level and spending reductions at the state level, they need to recognize that a large amount of cost containment measures have already been taken, with considerable success, and further cuts could have adverse effects on access and health care quality for their sickest and poorest residents. [..]

On a per enrollee basis, however, growth in Medicaid spending (the national average, not necessarily specific states) is slower than both growth in national health expenditures per capita and increases in private health insurance premiums (Figure 1). Moreover, although Medicaid spending per enrollee has risen 1.6 percentage points faster than growth in GDP per capita (3.0 percent) over the last decade (2000-2009), its per capita growth has been far below the rise in overall per capita health spending in America, which has risen 2.9 percentage points per year faster than GDP per capita over this same period.

Growth in Medicaid spending per enrollee is lower than the increases in national health expenditures per capita and the premium growth of employer-sponsored health insurance plans due to an aggressive set of cost containment policies implemented by states in general. These include lower fee-for-service payment rates, consistent expansion of Medicaid managed care programs, an array of policies to control prescription drugs, and extension of home health and community-based services intended to reduce the level of institutionalization.

The Center for Budget and Policy Priorities’ Edwin Park provides this chart:

The Affordable Care Act does temporarily increase the reimbursement rates to Medicaid providers (and policy wonks agree that more needs to be done in this regard), but this report undermines the argument that Medicaid costs are out of control and that states would be better capping or even opting out of the program. The fact is that Medicaid cost growth per beneficiary “has essentially tracked growth in health-care costs systemwide” and the program actually “provides more comprehensive benefits than private insurance and charges beneficiaries significantly lower out-of-pocket costs.”

Rep. Paul Ryan (R-WI) is now the second Republican this week to criticize Mitt Romney’s Massachusetts health care reform plan…and it’s only Wednesday. Speaking at a breakfast sponsored by the American Spectator, Ryan followed up on Gov. Haley Barbour’s (R-MS) criticism yesterday and said that Romney’s proposal is “not that dissimilar to Obamacare. And you probably know that I’m not a big fan of ObamaCare.” Phil Klein has the details:

“I just don’t think the mandates work,” Ryan said. “I haven’t studied in depth the status of it, but I think it’s beginning to death spiral, they’re beginning to have to look at rationing decisions. I don’t think this kind of a system works.”

By “death spiral” Ryan is referring to the phenomenon that occurs when government require insurers to cover those with pre-existing conditions, which discourages healthy people from buying insurance because they know they can always find coverage when they get sick, which in turn drives up the cost of insurance even more, and causes more healthy people to exit the market, and so on. This is what the individual mandate is supposed to prevent, but Ryan, like other health policy analysts is a skeptic that it works in practice.

Ryan went on, “That’s why I’m a believer in a consumer-based patient centered health care reforms, and I don’t think that the Massachusetts plan does it, it goes in the opposite direction.”

Ryan’s remarks comes just two days after President Obama said he agreed with Romney’s health care plan. “In fact, I agree with Mitt Romney, who recently said he’s proud of what he accomplished on health care in Massachusetts and supports giving states the power to determine their own health care solutions,” Obama said in an address to the National Governor’s Association. At that event, Obama touted a new measure that would give states more flexibility in how they design their universal health care programs, a position Romney himself has previously embraced. (Romney has defended his reform plan, but argued that states should develop their own health care solutions.)

Similarities aside, Republicans who reject both plans’ individual mandate will have a difficult time proving that the provision has failed to expand access to insurance. Today, more than 98 percent of Massachusetts residents have health care coverage, including 99.8 percent of children — the highest in the nation. The percent of private companies offering health insurance to their employees has also increased from 70 to 76 percent and in 2011, the state spent $405 million on uncompensated care, nearly $300 million less than before reform was enacted in 2006.

Still, because Romney’s reform plan addressed access without tackling costs, the state is considering various proposals to lower health care spending. Gov. Deval Patrick (D) has introduced what he calls “the second phase of health care reform” to develop new mechanisms for delivering and paying for health care. But that has nothing to do with the “death spiral” or “rationing” that Ryan is so worried about; rather it’s the next step in developing and improving Romney’s very popular health care plan.

Rep. Cathy McMorris Rodgers (R-WA)

While some Republican governors are still advocating transforming the current matching fund system of Medicaid funding into block grants (more on why this is such a bad idea here), Mother Jones’ Suzy Khimm is reporting that other Republican lawmakers are adopting a far less radical approach that could potentially appease governors worried about the growing cost of the Medicaid program:

Rep. Cathy McMorris Rodgers (R-Wash.), the fourth highest-ranking Republican in the House, is at the forefront of the push in Washington. She’s currently examining a proposal that would let states opt out of existing Medicare and into some such alternate setup. “The key is flexibility,” she told Mother Jones, employing the GOP’s latest buzzword. “Perhaps those who want to stay with the current system could do so,” the congresswoman adds. “Those states that want a different option could do so, with the flexibility. We need to work on it.” [...]

McMorris Rodgers says she’s encouraged by her own state’s Democratic governor, Christine Gregoire, who chairs the National Governors Association. While a strong supporter of federal health care reform, Gregoire convinced the Obama administration to exempt Washington state from certain Medicaid rules. She has also echoed the call of Republican governors demanding the right to take full control of their programs—and scale them back if need be. “She’s had to make some very difficult decisions and she needs the flexibility,” says McMorris Rodgers, noting that Gregoire has already slashed certain dental and vision benefits to keep Medicaid solvent.

States are already free to opt out of the Medicaid program, but McMorris Rodgers’ proposal would allow states to apply the federal funds they currently receive towards an alternative program. It’s unclear what level of benefits the alternative plan would have to provide to qualify for federal funding, but extending states the “flexibility” to craft their own designs is on par with the Wyden/Brown bill Obama endorsed on Monday.

Still, it’s important not to overstate the rigidity of the existing program. For all the Republican complaints about the federal government’s control of Medicaid, states already have a good deal of flexibility to design benefits, implement delivery system reforms, and set payment strategies without applying for a federal waiver. For instance, states can eliminate optional services, add or increase cost sharing for some services and do a better job of managing and coordinating chronic care (since one percent of all Medicaid beneficiaries account for 25 percent of all expenditures). In fact, under the Affordable Care Act, states can even apply for federal funds to better coordinate services for people with chronic conditions and receive federal support to design new models for serving the very expensive dual eligible population (these beneficiaries, who qualify for both Medicare and Medicaid, represent just 15 percent of Medicaid beneficiaries but make up 40 percent of all Medicaid expenditures).

Federal policy makers recognize that states in budget distress may need additional assistance to control Medicaid spending and the administration is meeting with local officials to find new solutions to control costs. McMorris Rodgers’ proposal may provide states with even more options, but whether its moderate tone will attract GOP support, remains to be seen. Given the party’s reaction to Obama’s endorsement of the Wyden/Brown flexibility bill, however, its safe to assume that the provision will fare better if the President keeps his distance or outright condemns it.