Academic journal article Contemporary Economic Policy

The Waiver Pork Barrel: Committee Membership and the Approval Time of Medicaid Waivers

Academic journal article Contemporary Economic Policy

The Waiver Pork Barrel: Committee Membership and the Approval Time of Medicaid Waivers

Article excerpt

I. INTRODUCTION

Medicaid, the state-federal health insurance program for the poor, is now the fastest growing segment of state budgets. Its explosive growth has forced cutbacks in many other state programs, causing states to look for ways to slow the program's rate of growth (see "State Budget," 1994). The federal agency that oversees Medicaid, the Health Care Finance Administration (HCFA), allows states to reduce cost pressures by utilizing alternative methods of providing care. Under the Medicaid program's rules, state governments are required to submit a waiver, upon which HCFA will rule, to implement a cost-saving program. Typically, waivers grant a state the right to alter the program in such a way as to limit recipient's access and, hence, to control costs. The General Accounting Office (GAO, 1995) estimates that certain program alterations, if approved, can reduce state expenditures by millions of dollars. Such program alterations are controversial, however. Reductions in program costs almost always mean reduced payments to hospitals (GAO, 1993). In addition, members of Congress have expressed concern about the effects of such cost containment on health care coverage for the poor (Kosterlitz, 1992). Adding to the controversy, the time required for HCFA to process a waiver varies from 14 days to over three years.

This study examines the time from initial filing until a ruling for Freedom of Choice waivers (FOC), which allow states to put Medicaid patients into health maintenance organizations (HMOs). Given the cost to hospitals and the benefits to state budgets, public choice theory predicts that members of Congress will either attempt to influence the bureaucracy to expedite a waiver from their home state (in order to save local voters money) or lobby HCFA to delay waivers as long as possible (in order to provide hospitals greater profits or to protect poor people).

There is a sizable literature on the role congressional representatives play in securing benefits for their states (see Arnold, 1978). This literature has generally focused on the ability of congressional representatives to secure federal spending for either their state or district. Shepsle and Weingast (1981) argue that Congress is designed to facilitate the acquisition of benefits by members. Others have argued a different path for Congressional influence, namely, that expertise on the part of committee members and the deference shown to that expertise by noncommittee members allow members of oversight committees to influence spending (Gilligan and Krehbiel, 1989; Kiewiet and McCubbins, 1991).

Whether the benefits are direct spending or favorable treatment by an executive agency is of no consequence to the theory. The sizable literature on the role of bureaucratic discretion details the influence of Congress on executive agencies. For example, Weingast and Moran (1983) find that the composition of the oversight committee alters bureaucratic behavior. Yet the literatures on bureaucratic control and on Congressional influences on spending have rarely been considered together. Congressional influence on the bureaucracy has largely been viewed as ideologically driven, rather than being based on the costs and benefits that the bureaucracy can deliver for a member. This study represents an intersection between these two literatures. The time to approval on a Medicaid FOC waiver is determined by the HCFA. This study finds that members of Congress who are assigned to the committees that oversee the agency have considerable influence in reducing the time to approval on waivers filed by their home state. Given the massive savings that such waivers can produce, these benefits are likely to be just as important to constituents as highway dollars or military base closings.

II. CONGRESSIONAL COMMITTEES AND EXECUTIVE AGENCIES

A. Committees and the Pork Barrel

Scholars of congressional committee membership have long alleged that the goal of a congressman is to maximize votes (Mayhew, 1974). …

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