Medicaid maintains a deeply rooted, perverse incentive that all but guarantees unaccountable spending growth by state politicians.

President Bush continues to offer states more freedom to improve Medicaid via the Deficit Reduction Act and provisions in his 2007 budget.

Most states politicians are not engaging this opportunity, preferring simply to complain about the federal government’s demands for Medicaid accountability.

Medicaid expansion reduces states’ incentives to reform the private health insurance market and does not address issues usually attributed to the uninsured, such as emergency room (ER) overcrowding.

President Bush’s next best step for Medicaid reform is to develop a plan to convert all federal matching funds to block grants, over the protests of state politicians.

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