States began cutting Medicaid beneficiaries who no longer qualify but were continuously enrolled during the COVID-19 pandemic, on April 1.
Under the Families First Coronavirus Response Act, enacted in 2020, states were prohibited from removing anyone in Medicaid while the public health emergency was in place. In exchange, states received enhanced federal matching funds.
The omnibus bill signed into law on December 29, 2022, delinked enrollment from the public health emergency, effective March 31. The bill phases out enhanced federal matching funds through December 2023. States can continue Medicaid coverage without checking enrollees’ eligibility beyond April 1, but must meet certain requirements and risk losing additional federal funding.
President Biden ended the national emergency on April 10, and the public health emergency is expected to expire on May 11. The Kaiser Family Foundation (KFF) estimates that 5 million to 14 million people will lose Medicaid coverage during the unwinding of continuous enrollment.
The Paragon Health Institute estimates 15 million to 20 million people in Medicaid do not meet eligibility guidelines, and cost taxpayers in excess of $100 billion a year. Enrollment in Medicaid and the Children’s Health Insurance Program grew about 25 percent during the pandemic, to 95 million people, according to the KFF.
Obamacare’s Medicaid Expansion
Continuous enrollment during the pandemic isn’t the only driver of Medicaid’s massive expansion; it began in earnest after the Affordable Health Care (ACA) went into effect and the legislation was affirmed by a U.S. Supreme Court decision in June 2012.
For the first time, states had the option of expanding their Medicaid programs to non-disabled people with incomes up to 138 percent of the federal poverty level. To entice states, the federal government paid 90 percent of the bill, initially.
Today, all but 10 states have chosen to expand their programs, according to KFF. The states that have not expanded eligibility are Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming.
Those states are fortunate, says Linda Gorman, director of the Independence Institute Health Care Policy Center and a senior fellow with the Goodman Institute for Public Policy Research, which co-publishes Health Care News and released a new report on Medicaid expansion by Gorman on March 1.
“States that have expanded Medicaid to cover able-bodied low-income people have faced much higher than predicted costs,” said Gorman. “There is surprisingly little evidence to show that overall health has improved. There is a substantial amount of evidence suggesting that the bureaucracies running Medicaid expansion degrade the quality and quantity of medical care in their efforts to reduce spending.”
Healthy Crowd Out Sick
Gorman’s report, titled “Medicaid Expansion: Expensive, Ineffective, and Damaging to Existing Healthcare Infrastructure,” cites alarming developments in expansion states.
“Spending on Medicaid has always been difficult to limit,” wrote Gorman. “As its enrollment expands, it reduces available funding for other pressing public needs like schools, infrastructure improvements, law enforcement, and higher education.”
For example, in Colorado, one in four people is now enrolled in Medicaid, up from one in 12 before expansion. As a result, Medicaid consumes 37.9 percent of the state’s budget.
Additionally, Medicaid now covers people who entered the U.S. illegally. Illegal aliens over age 50 can qualify in California and over age 65 in New York. The Biden administration is now trying to extend Medicaid and Obamacare to all recipients in the Deferred Action for Childhood Arrivals (DACA) program for so-called “Dreamers.” This could add 580,000 new people to these programs. While Obamacare is not free, it is heavily subsidized.
Medicaid’s Expanding Waste
Often, no cost sharing is required for able-bodied Medicaid enrollees, Gorman told Health Care News.
“Wasteful spending has increased because Medicaid provides few incentives to use medical care wisely,” Gorman said. “To make matters worse, the federal government has blocked expansion states’ efforts to monitor Medicaid for ineligible enrollment and other frauds.”
Medicaid offers extensive coverage and will pay for things like “transportation, extended nursing home care, prescription drugs, over-the-counter medications, physical and occupational therapy, inpatient psychiatric care, home care, eyeglasses, hearing aids, and dental care,” wrote Gorman.
California Gov. Gavin Newsom announced a plan to get Medicaid to pay six months’ rent for homeless enrollees, on March 20. Meanwhile, 3,501 people in Colorado with intellectual and expanded disabilities are on waiting lists for residential care, one of the “crueler aspects” of expansion, wrote Gorman. Nationally, more than 707,000 people with intellectual and developmental disabilities were on waiting lists for Medicaid home and community-based services in 2017, up 8 percent from the previous year, according to Gorman’s report.
Single Payer Bonanza
Lax enrollment policies have been a big problem for Medicaid, says Matt Dean, a senior fellow for health care policy outreach at The Heartland Institute, which co-publishes Health Care News.
“You can make too much money, live in a state other than the one on your Medicaid card, or be dead, and still be on Medicaid,” said Dean.
COVID-19 was an opportunity to enroll people in a government health care program, says Dean.
“Expanding Medicaid to middle-class healthy individuals during the pandemic provided the one-way door single-payer activists had long been looking for,” said Dean. “Politicians, terrified of the potential price paid when these folks are ‘kicked off’ health care as the pandemic rules are lifted, are crying uncle. The 10 states who held out on expanding Medicaid will now be squeezed ever tighter as millions of dollars flow in to expand Medicaid in those states.”
AnneMarie Schieber (amschieber@heartland.org) is the managing editor of Health Care News.
Internet info:
Linda Gorman, “Medicaid Expansion: Expensive, Ineffective, and Damaging to Existing Healthcare Infrastructure,” Goodman Institute for Public Policy Research, March 1, 2023.
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