The Delegated Welfare State: Medicare, Markets, and the Governance of Social Policy

By Kimberly J. Morgan; Andrea Louise Campbell | Go to book overview

6
Administering the Delegated Welfare State
The Cases of Medicare and the 2003 Medicare Modernization Act

How well does the delegated welfare state actually work? Is it an efficient and effective way to administer government programs? Or do such practices add layers of private bureaucracy to the public ones, diffuse governing authority to the point of incoherence, and undermine the effectiveness of public programs? Answering these questions is complicated by the fact that delegation has taken varying forms. For instance, as the previous chapters showed, Medicare now contains within it different models of delegated governance—the contracting-out of administrative functions to non-state actors in the original Medicare program and the growing reliance on a publicly subsidized and regulated marketplace of private plans that provide benefits. In other policy fields, such as Medicaid, public assistance, and college education financing, we can find an array of hybrid publicprivate arrangements in which governing authority is shared with private actors but the relationship is structured in particular ways. Given this complexity, it would be an impossible task to evaluate the effectiveness of this delegated welfare state as a whole, and we would risk making some of the facile generalizations that have often surrounded the debates around privatization and contracting out.

Instead, we advance a more modest set of claims based on an in-depth analysis of the functioning of Medicare, using this case study as a way to address some larger questions about both conventional contracting out and consumer-choice forms of delegated governance. Has the contracting out of program administration been a cost-effective way to run Medicare, one that not only saves the government money but facilitates the effective administration of the program? How well-functioning is the publicly subsidized marketplace of private plans? Has Part D, for instance, achieved its goal of improving access to prescription drugs, saved the government money, and resulted in a good quality “product” for Medicare beneficiaries? The latter questions are especially important, given ongoing debates over how best to reform federal entitlement programs and extend health care coverage to the uninsured. In the 2009–2010 debates over health care reform, some explicitly held up Medicare Part D as a model, arguing that it had saved the

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