The media discussion concerning the recently-overturned “Wal-Mart bill” is missing a critical element. While the media focuses on how many Wal-Mart employees are on Medicaid and whether Wal-Mart should be penalized for this number,  they miss the more important story about how Maryland’s Medicaid system is in serious trouble in the future.

Currently one in ten Maryland residents uses Medicaid. The state will spend $2.17 billion on the program in Fiscal Year 2007, and this amount will increase by $630 million by 2011. This number will only go up in the years after 2011. If current trends continue, the state will not have the money to fund both Medicaid and other necessary programs (such as education) in the future.

This problem will not be solved by forcing Wal-Mart (or any other business) to pay more into a “Fair Share Health Care Fund.” The problem can partially be solved if the state would restrict its generous eligibility for the program while also increasing co-payments. These measures, however, will take political leadership that has been lacking on this issue and they won’t provide a permanent fix for the system.

To actually solve this problem, state policymakers need to think of innovative ideas that will completely transform Medicaid. The system should be designed in a way that will still serve the poor and people with disabilities who depend on Medicaid while at the same time maintaining fiscal discipline. This is a tough combination, but it’s necessary to avoid either massive cuts in Medicaid benefits down the road or large tax increases to fund the program (or both).